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In this segment we're going to talk about how you can change your management model.
Given the previous segment we were talking about the, the desire many
companies have to have a more alternative based approach to management.
We want to look at some of the mechanisms that organisations use, and
I'm going to suggest there there are three generic approaches out there.
One is what we might call the, the start-up model, which is where the company
starts with a very distinctive model and they gradually sustain that over time.
Secondly, we're going to look at the,
the so-called top-down approach where the Chief Executive of the company goes in
with a fairly a big bang approach to shaking things up from the top.
And then third,
we'll look at the bottom-up approach where typically some sort of middle-manager or
middle-managers, take the initiative to try to change things from below.
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And they came up with this algorithm for essentially doing search,
online search, far, far more effectively than had been done before.
And so they created Google as a search engine without any thought about how they
might actually make money from it.
And then about five years later, they came up with this notion of sponsored ads
whereby essentially, you know, depending on what exactly you're searching for,
companies will pay a small fortune to have their product or
their company name linked to that particular search.
So that's how they make money, that's their business model.
The story I want to tell here is about their management model, because as well as
being a very kind of innovative company in terms of their products, Larry and Sergei,
and, and subsequently their chairman, Eric Schmidt, decided they wanted to
create a company that also was very inventive just in terms of how it works.
Now I'm going to do this story very quickly because it's,
it's a quite a well known story and b, will take a very long time to discuss it.
But let me just acknowledge some of the elements of the management model that
they created at founding, which they are trying to continue to, to use even 15 and
20 years later.
First of all, very informal, very informal working environment they
encourage people to come and work long hours.
They assume that people want to work long hours because the work is
inherently interesting.
They give very generous perks.
They give all the free food that you could possibly want to eat.
They have lots of opportunities for, for leisure and games and
stuff in the Google campus.
So it's all based on this premise that it's a bit like grad school, you know,
people want to be there and spend long hours.
They give lots of time off for inventors, innovators to work on their pet projects.
So they're calling this term innovation time off.
And the model was that as well as working on your day job, you should spend 20% of
your time, working on whatever pet project you thought was interesting.
Many of Google's most successful products in the last few years have come through,
this Innovation Time Off.
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Now gradually this has been scaled back a little bit.
It's not quite so
much a, a part of the day-to-day work, as perhaps used to be the case.
But it's still very much in the ether that individuals should be encouraged to dabble
in their own projects, as well as working on whatever they've been assigned to.
Third, teams are very small project teams are often literally one or
two people, perhaps half a dozen.
Why is that important?
Because it means they can work much more collaboratively, much more efficiently.
They can get ideas out much quicker.
They can get into the cycle of prototype, can get tested, and
refined using users much more quickly than,
if they have an enormous team trying to create the perfect product.
So, rapid approach strategies will be part of the model.
And then, in order to make sure that people know what each other are doing,
they've got various mechanisms for collaboration, for sharing.
And one of them is the, the weekly meeting, whereby the founders, Larry and
Sergey stand up and talk about what the company's doing, and
they answer any and all questions from employees.
Now, obviously, in the early days, when it was, let's say,
50 employees, that was dead easy to organize.
How on earth do you scale that?
Well, they continue to have the model, whereby, once a week, there is some sort
of opportunity for employees all around the world, to dial in to essentially
a webinar where Larry and Serge are talking about what's happening that week.
So obviously you can't scale it exactly, but they've continued with this
notion that all information about the company should be shared.
Finally, it's important to note that the founders, Larry and
Sergey, continue to exact, roughly speaking, control over the company.
They've split the company into company shares into voting and nonvoting shares,
and between the two of them, they control most of the, the voting shares.
And what that means, of course, is that they can continue to call the shots,
even though it's a limited liability company with, with external shareholders.
So what they said at the time of their initial public offering,
they said we're not an ordinary company, we don't intend to be, become one.
You know, if you buy into Google shares, you're doing it because you're
betting on us, and as long as we're in control, we're going to do it our way.
And over the next, you know, decade or
so, the company has grown significantly, it's 50,000 or so employees.
Obviously as a company that size,
there is some level of formal processes and procedures.
But they've done their utmost to continue to con, to, to manage with all of
these informal ways of working that, that were, that were baked in at the outset.
So, they are desperately trying to insure that their model,
their management model which has really been a big driver of their success,
continues to enjoy even though its now quite a large company.
Julian BirkinshawProfessor of Strategy & Entrepreneurship
