How Google Works

by Eric Schmidt

The basis for success then, and for continual product excellence, is speed.

The primary objective of any business today must be to increase the speed of the product development process and the quality of its output.

She is user smart. No matter the industry, she understands her product from the user or consumer’s perspective better than almost anyone.

She is curious creative. She is always questioning, never satisfied with the status quo, seeing problems to solve everywhere and thinking that she is just the person to solve them. She can be overbearing.

But they all must possess business savvy, technical knowledge, creative energy, and a hands-on approach to getting things done. Those are the fundamentals.

Working from home during normal working hours, which to many represents the height of enlightened culture, is a problem that—as Jonathan frequently says—can spread throughout a company and suck the life out of its workplace.

Creating a meritocracy requires equal participation by both the hippo, who could rule the day by fiat, and the brave smart creative, who risks getting trampled as she stands up for quality and merit.

The leaders of a business unit are motivated to prioritize their unit’s P&L over the company’s. If you do have P&Ls, make sure they are driven by real external customers and partners. At Sun, the formation of the planets led to a huge loss of productivity, as leaders (and accountants) became focused not on creating great products that generate actual revenue, but on optimizing a number at the end of an accounting formula.

A technical insight is a new way of applying technology or design that either drives down the cost or increases the functions and usability of the product by a significant factor.

market research can’t tell you about solving problems that customers can’t conceive are solvable.

solve an existing problem in a new way.

Another potential source of technical insights is to start with a solution to a narrow problem and look for ways to broaden its scope.

When you base your product strategy on technical insights, you avoid me-too products that simply deliver what customers are asking for. (Henry Ford: “If I had listened to customers, I would have gone out looking for faster horses.”)

being great at search, which we measured along five axes—speed (fast is always better than slow), accuracy (how relevant are the results to the user’s query?), ease of use (can everyone’s grandparents use Google?), comprehensiveness (are we searching the entire Internet?), and freshness (how fresh are the results?).

With open, you trade control for scale and innovation.80 And trust that your smart creatives will figure it out.

We institutionalized the LAX test by making “Googleyness” one of four standard sections—along with general cognitive ability, role-related knowledge, and leadership experience—on our interview feedback form. This includes ambition and drive, team orientation, service orientation, listening & communication skills, bias to action, effectiveness, interpersonal skills, creativity, and integrity.

sourcing, interviewing, hiring, and compensation.

Google’s Hiring Dos and Don’ts

OKRs are another great example of transparency. These are an individual’s Objectives (the strategic goals to accomplish) and Key Results (the way in which progress toward that goal is measured). Every employee updates and posts his OKRs company-wide every quarter, making it easy for anyone to quickly find anyone else’s priorities.

Of course, this starts at the top. Every quarter at Google, Larry—like Eric before him—posts his OKRs and hosts a company-wide meeting to discuss them. All the various product and business leads join him onstage to talk through each OKR and what it means for their teams, and to grade themselves on how they performed against the previous quarter’s OKRs. This isn’t for show—the OKRs are real objectives, hammered out between the various product leaders at the outset of each quarter, and the grades of the previous quarter’s OKRs are usually full of red and yellow marks.

smart little tool he had implemented called “snippets.”

Bill also suggests a nice format for 1:1s, which we have adopted with good results: Performance on job requirements a. Could be sales figures b. Could be product delivery or product milestones c. Could be customer feedback or product quality d. Could be budget numbers Relationship with peer groups (critical for company integration and cohesiveness) a. Product and Engineering b. Marketing and Product c. Sales and Engineering Management/Leadership a. Are you guiding/coaching your people? b. Are you weeding out the bad ones? c. Are you working hard at hiring? d. Are you able to get your people to do heroic

things? Innovation (Best Practices) a. Are you constantly moving ahead … thinking about how to continually get better? b. Are you constantly evaluating new technologies, new products, new practices? c. Do you measure yourself vs. the best in the industry/world?

“Serving our end users is at the heart of what we do and remains our number one priority.”

Ship and iterate.

The products should be great at what they do, but it’s OK to limit functionality at launch.

Figure out some way to let people experience the product, and use the data to make the product better.

Do your customers love your products? Or are they locked in by other factors that might evaporate in the future? If they weren’t locked in at all, what would happen? (Interesting corollary to this question: If you forced your product people to make it easy for customers to ditch your product for a competitor’s, how would they react? Could they make your products so great that customers want to stay, even if they don’t have to?)