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Original stub is How Google Works

How Google Works

Author	Jonathan Rosenberg and Eric Schmidt with Alan Eagle
Original title	[How Google Works] Error: {{Lang}}: unrecognized language tag: English (help)
Illustrator	Nishant Choksi
Country	USA
Language	English
Subject	Business
Genre	non-fiction
Publisher	Grand Central Publishing
Publication date	September 2014
Media type	harcover, ebook
Pages	286
ISBN	9781455582341

The book “How Google Works” (not to confuse with the paper "How Google Works" written by David Carr on June 2006 for Baseline ) was written by Jonathan Rosenbergand Eric Schmidt and was published by Grand Central Publishing on September 23, 2014. How Google Works is about how Google managed from the perspective of Jonathan Rosenberg and Eric Schmidt. They tell their story from the days they first came to the company and what lessons they have learned and new ideas they had to come up with to grow the company that is known today. The book does not provide readers with details of the technical side of the company, rather how it is managed. It focuses on the behavior of entrepreneurs, the managers, and CEO and provides with advice on how to rule newborn companies and do changes in existing ones.

Eric Schmidt

Jonathan Rosenberg

The book has a lot of footnotes some of them contains references to other book, articles, and academic works.

The structure of the book

As every other book "How Google Works" has chapters and after/for- word parts. Table of content looks like this.

• Introduction : lessons learned from the front row
• Culture : believe your own slogans
• Strategy : your plan is wrong
• Talent : hiring is the most important thing you do
• Decisions : the true meaning of consensus
• Communications : be a damn good router
• Innovation : create the primordial ooze
• Conclusion : imagine the unimaginable.

The Book also contains Foreword, Acknowledgments, A Note about the Authors, and Glossary Foreword part is written by Larry Page Google Cofounder and CEO where he talks from himself. In a few paragraphs, he passes some principle that in his opinion, are important.

Introducton

The book has a lot of situations and anecdotes that happened in Google and in the introduction, authors share two situations that happened with Eric and Jonathan when they first started to work at Google. Eric, as a CEO, had to share an office with one of the search engineers for several months and Jonathan after being asked to create a business plan and delivering his “masterpiece of textbook thinking” to the Larry Page he was told that his plan was useless and that he better go and talk to engenders. These two situations made Eric and Jonathan understand that Google was run differently.

In the introduction, authors state that Google’s employees are, in fact, everything and ran company according to that statement. Their plan for the success was “to hire as many talented software engineers as possible, and give them freedom”.

Eric and Jonathan name three technology trends that are powerful these days, which are the Internet, mobile devices, and cloud computing. They suggest that product excellence is what should prioritize in any business. Two reasons for that are first, consumers today have knowledge about products they want and use and a market is big and second is failure and experimentation are not that crucial as it should be – in the case of failure, just start over again with previous mistakes in mind.

Google employees are called smart creatives and smart creatives are people who (according to Jonathan from the CHM Revolutionaries: "How Google Works" Eric Schmidt & Jonathan Rosenberg talk)

"Are highly technical, they are also business savvy, and they are creative, and they are passionately curious, they are kind of people who do not take no for an answer, they are the kind of people that are today can build the demo out of the tools we have of the shelf through easy to produce things with, they show you as oppose to tell you what you going to do, you do not need to actually create rigid product plans, you can actually create demos and prototypes, and test then and see where they go"

The introduction concludes with a brief explanation of how the book is organized and message to the reader – “entrepreneur”.

Chapter 1. Culture – Believe Your Own Slogans

The main topic in this chapter is the culture of the company, its importance, how to build it in a right way and support it in future.

The chapter starts with the situation that happened in 2002 at Google at what will be referred to “These ads suck” in the book. On May 2002 Larry Page was surfing the Google site to see how ad engine worked. He did not like what he got and instead of talking to a person who was in charge of that, he printed out search results, highlighted ads and wrote “THESE ADS SUCK” across the top and posted it on a bulletin board. The problem was solved by the not ads team of employees over the weekend. Authors call it the power of culture and say that it is the most important thing to consider when building a new company. In support of their statement authors mention work of psychologist Benjamin Schneider and his work “The people make the place ” and work of Hazel Rose Markus and Alana Conner “Clash!: 8 Cultural Conflicts that make us who we are”.

Smart creatives are people who like communication and giving them the ability to work together and not in individually owned offices boost their creativity and energy. There are also a lot of places where smart creatives can go and be alone or rest. The goal is to provide smart creatives with everything they need, - amenities and technologies - to do the work and be creative and illuminate things like worries about office size. The project manager has to be with his team together all the time, they need to “work eat and live with their engineers”. Authors suggest to not to listen to HiPPOs – Highest Paid Person’s Opinion when it comes to the quality of decision making. Smart creatives are the people who prefer flat organization and need a direct report to decision-makers. For that, there is the rule of seven is a concept that suggests that “managers have a minimum of seven direct reports” and this structure also leaves no time to micromanage. Teams also have to be small so that “two-pizza rule” by Amazon’s founder Jeff Bezos can be applied. The rule suggests that a team should be small enough so it can be fed by two pizzas.

If a company grows big and build small units, those units have prioritized company’s profit and loss structure over their own.

The reorganization has to be done in a day and there is no perfect organizational design, so authors suggest finding the most suitable one and letting “smart creatives figure out the rest”. Organization should be done around people who have the highest impact on the company, “invest in the people who are going to do what they think is right, whether or not you give them permission”. Eric and Jonathan divide smart creatives into two groups - divas and knaves and say that divas can be tolerated and sometimes even protected while knaves should be gone.

Work-life balance is important in any job. Managers should ensure their employees have full and lively work day, but not that “employees consistently have a forty-hour workweek “. Employees are looking for freedom and trust and managers have to give them that. Also, authors write that there should not be the feeling of being “indispensable” worker among employees. Because smart creatives do not take No for an answer there should be the culture of Yes in the company. They use a quote of Michael Hogan who is a former president of the University of Connecticut - “My first word of advice is this: Say yes. In fact, say yes as often as you can. Saying yes begins things. Saying yes is how things grow. Saying yes leads to new experiences, and new experiences will lead you to knowledge and wisdom.… An attitude of yes is how you will be able to go forward in these uncertain times.”

Saying Yes is as important as having fun for the company’s healthy culture. Not kind of Fun that is manufactured with the help of picnics, holiday parties and promises that even will be Fun. Fun should be within the company itself, between co-workers that trust each other, “fun comes from everywhere”, just broaden boundaries of what is allowed to as much as possible. “Nothing can be sacred” write authors. To become a part of a new culture, it’s important, to be honest and authentic. It is hard to change existing culture of the company, so it’s important to start with the right one, where employees trust each other, do not strive for be closer to the top, have as less secret documents as possible, CEO are not arrogant and can pick up trash from the floor in the office, people make each other better and employees believe in the company’s values and share them.

Chapter 2. Strategy – Your Plan Is Wrong

No matter how good the plan could be, one day it can become wrong plan and it is important to have right people ефре can figure out what to do next. Smart creatives are the people who do not care too much about the plan and in fact “won’t trust a plan that claims to have all the answers, but will jump at one that doesn’t,as long as it is built on the right foundation.” Here is where technical insight and optimization for scale should be valued more than revenue.

Market research should not be more important than technical insight, as it automatically changes priorities from making the change and scaling towards making the profit. One source for technical insight is what Google economist Hal Varian calls the period of “combinatorial innovation”- it “occurs when there is a great availability of different component parts that can be combined or recombined to create new inventions”. Another is finding a solution for a narrow problem and broaden the scope of the solution. Always ask yourself as creator – What is my technical insight? – If there is no answer, rethink the project. Optimize for growth, not revenue. Grow quickly and globally. Scaling should be a core part of the foundation of the company. Try to build a platform – they grow quickly, attract investors and create places for new innovations. And also, stay focused.

Lowering the cost won’t help to succeed. Strive for better quality of the product. The difference between twenty-first century and twentieth is that “the twentieth century was dominated by monolithic, closed networks, the twenty-first will be driven by global, open ones”.

Today, being open is better than closed, of course within reasonable circumstances. Open means “sharing more intellectual property such as software code or research results, adhering to open standards rather than creating your own, and giving customers the freedom to easily exit your platform”. Open systems not only attract investors, but also show its users that company has nothing to hide. Openness also implies that users have freedom of choice and actions and that they can leave easily if they want.

Closed strategy can work as good as open if the product is unique due to its technical insight and market is new and grow quickly. Also, sometimes opening can influence the quality of the product, which cannot be allowed. Running after competitors will not do any good either. Focusing on doing the same as a competitor illuminates unique ideas and solutions. As Nietzsche wrote in Thus Spake Zarathustra: “You must be proud of your enemy; then your enemy’s successes are also your successes.”

Chapter 3. Talent – Hiring Is the Most Important Thing You Do

Chapter 3 focuses on the hiring process, tips, rules and practices within the company, and provide with Google’s Hiring Do’s and Don’ts as followed by Career-Choose the F-16 document. The most important skill and work for the manager is hiring people. The hiring process should be peer-based, not hierarchical that is commonly used by the companies. Hiring right people for the company takes a lot of time and work, “but it is the best investment you can make”.

“Herd effect” – people will hire people like them, so if you have not-so-good people working for the company, they will hire more not-so-good people. On the interview, ask the same questions so there is an opportunity to compare answers. Ask people about their hobbies and listen carefully to what they are saying – this way more insight into personality can be gained. Hire learning animals - people who are eager to learn, and do not be afraid of those who have any previous experience in something. If hire right people, they will learn new skills and adapt in a way no one can imagine. Authors suggest hiring not only smart but interesting people. In case of a business trip, coworkers have to be interesting to each other; they have to be able to communicate. At the same time, have diversity in the company; people do not have to all like each other.

The interview should not last longer than 30 minutes and “the best interview should feel like an intellectual discussion between friends”. Form an opinion during the interview, it’s the ultimate goal. Do not let friends to hire their friends. Create hiring pocket that will have all the information about a candidate. Peers review hiring pockets and make decisions based on them. Anything that is not in the hiring pocket cannot be considered. No matter how urgent it is to hire someone it should not influence the quality of a candidate.

Smart creatives can be attracted to the company, not because of the salary – they value opportunity and experience and ability to do a change. Reward better workers with big money regardless of their title or tenure. Eric and Jonathan advice to rotate workers inside the company so they always learn something new which is also will keep them interesting in the job.

There are four candidate evaluations that are used in Google

• Leadership
• Role-Related Knowledge
• General cognitive ability
• Googleyness

No matter how great the opportunity might be in the company for the employees the might want to leave. First, try to change their minds, talk to them how they can develop their career in the company. If it does not work, wish them good luck and let them go. If there are people that a manager or any other decision-making person thinks they should leave, perhaps they should.

Chapter 4. Decisions- The True Meaning of Consensus

Chapter 4 targets the do’s and don’ts of decision making process.

Chapter starts with the story about Chinese Google and its failure. Decisions always influence future of the company and its workers. Focusing on the right decision is not right. Time, process of making decision and its implementation are as important as the decision itself.

At the Internet Century data can be collected from almost all aspects of the business; consult that data. Usually data is best understood not by managers, but those who work with the issue, so thrust them and they will do right choice based on their knowledge. With financial decisions focus on revenue.

Beware “bobblehead yes” people who nod just to nod, not because they are agree. It also should be safe to express opinions even if it does not match opinion of the HiPPOs. “The right decision is the best decision, not the lowest common denominator decision upon which everyone agrees”.

Make sure due date is set up. Make fewer decisions as a CEO – it is important to know what decision to make and what can be made without CEO attention. Do as much meetings as it needed. Everyday meetings are good especially when topic is very important. With everyday meetings less time is spend on reviewing last meetings and decisions. Also, every meeting needs owner.

Authors proved list of rules that will make meetings productive:

• Meeting should have a single decision-maker/owner
• The decision-maker should be hands on
• Even if a meeting is not a decision-making meeting – for example it’s designed to share information or brainstorm solutions – it should have a clear owner.
• Meetings are not like government agencies – they should be easy to kill
• Meetings should be manageable in size
• Attendance at meetings is not a badge of importance.
• Timekeeping matters.
• If you attend a meeting, attend the meeting.

Authors also talks about “horseback law” which is “make a quick assessment, then mosey on “and addresses layers that work for the company.

They suggest to spend 80 percent of your time on 80 percent of your revenue. Leader has to be focused and love his/her business. Think about people who can lead the company ten years from now. Do you have this person? It is important to have plan for leaving the company for good.

Critics and Reception

The Guardian review of the book, done by Steven Poole, point out ideological inconsistencies of the book. Among some inconsistencies, he mentions developing Android phone after the first iPhone and advice of the author to not to chase competitors.

Journalist Brad Stone in his review of the book for The New York Times calls the book “breezily written and occasionally insightful guidebook for running companies in an age of rapid technological change ” and warns not to expect to find anything new and revealing about managing process.

There is also a review of the book done by Steven Sinofsky for the Wall Street Journal

See Also

• Google x
• List of Google products
• Android
• Microsoft Windows