Google: Leadership vs. Management

In assessing how Google has been able to succeed in intensively competitive industries including online search, advertising, and providing licensing of their technologies for use within corporations and governments globally, their leadership and management practices need to be taken into account. The intent of this paper is to analyze how the differences in management vs. leadership within Google significantly influence their ability to attract, retain, challenge and ultimately give their employees an opportunity to grow personally and professionally. The culture of Google is nonconformist to the traditional software company, concentrating more on giving employees freedom to pursue their own projects up to 20% of their work time (Taylor, 2009). Called the Rule of 20% Time, this practice is now responsible for a significant 50% of all new products for the company (Taylor, 2009). Microsoft has on the other hand relied more on a top-down hierarchy with clear yet at times inflexible lines of authority (Anders, 2007). To manage such a nonconformist and non-traditional approach to the development of Internet services, software development, and rapid application development takes a very unique leadership and management mentality. This paper examines and analyzes why Google continues to be successful at innovating despite their exponential revenue and employee growth.

Managing vs. Leading at Google

Microsoft and Google differ significantly from one another in many areas of management and leadership, yet both cultures’ reliance on Expert Power (Humphreys, Pryor, Haden, Oyler, 2009) force these organizations to defy traditional, top-down, hierarchical management structures. They simply do not work when each company must have continuously greater levels of creativity and innovation fueling new products and services. This is a result of team structures moving from being hierarchical to more network-based, and cross-functional in nature over the last two decades (Bennis, 1999). In addition, Expert Power in managers and especially leaders implying greater competency and charisma (Humphreys, Pryor, Haden, Oyler, 2009) has translated to less of a reliance in these company’s cultures on a given manager’s title or experience level. Of the two, Google has been the one to more pervasively internalize into their culture the role of a leader as an active member of a project team who not only directs, but also assists in the completion of complex projects (Hof, 2008).

From this analysis of the Google culture it is clear that management has more to do with the fulfillment of administrative tasks, functions and processes being enabled, and leadership is much more correlated to the project creation process. A leaders’ foundation for effectiveness in the Google culture is based on a platform of credibility that is earned from Expert Power and kept by instilling trust and transparency with team members. This is consistent with the core concept of what makes an effective leader as defined by Bennis (1999). What makes leadership difficult in any company however yet even more so in Google is the fact that for any leader to be effective, their personality, who they are in effect, must be aligned with the needs of those they manage if they are to excel in their role (Maccoby, 2009) (Bennis, 1999). As a result of this critical aspect of leadership in their culture, it is common for Google to hold several interviews with candidates to ensure they have the technical aptitude and also the ability to potentially lead as well (Shipman, 2006). Not only does this hiring process ensure a higher level of technical competency, it also provides Google senior management with a more readily available group of potential technical project team leaders in the future.

For a project or team manager to be effective as a leader in Google they need to quickly get beyond the traditional roles of management, which typically encompass planning, organizing, leading and controlling. This reliance on Legitimate Power is a waste of time for any manager in Google if they hope to get anything accomplished with their teams. Instead, as the research for this paper indicates, a manager can transcend their traditional role and become a leader by concentrating first on earning and keeping the trust of their team members (Maccoby, 2007) and by seeking to create more collaborative groups structures and approaches to attaining shared goals (Bennis, 1999). This is admittedly quite complex and very difficult to do in a company known for hiring the most analytical, intelligent, skeptical and questioning engineering talent available. The common purpose of a project team and its accomplishment must be internalized by each team member if it is to be attained (Bennis, 1999). At Google, managers who transform themselves into leaders have this ability to gain the collaborative efforts of their teams through credibility and rewarding team members with rewards relevant to them. The leader as servant becomes a critical part of success for anyone leading a team at Google; they must know and understand the needs of those who work for them. This includes the need for recognition, need for mastery of a given area, and most critically for Google’s engineering and development talent, the need for professional respect as being the best in the industry at what they do. Leaders in Google must do this while at the same time keeping clarity in place with regard to roles, setting the expectation that individual and team performance will be exceptional always, and that both the team and the leader don’t evade problems or challenges, they face them. All of these factors together will over time create a level of transparency that fuels the relationship between leaders and team members (Maccoby, 2007). All of these factors combined then form the expectations and foundation of a leader in Google vs. A manager. The differences are significant and make the difference if a team or project manager lasts in the culture or not. Given how extensive the recruiting process is in Google and fact that the most common reason employees leave a company is due to their manager, Google has been known to seek advice on how to get rid of bureaucratic managers for fear they will lose valuable employees as a result (Maccoby, 2009). Leadership is much more difficult to attain in Google, yet its results speak for themselves, with the company being one of the most prolific in terms of generation new product ideas than any other in its comparable short history.

Why Google Sees Globalization as a Significant Opportunity

At the center of Google’s business model is their AdWords services, which on average generates 30% of their revenue in any given financial quarter. This is a service that allows anyone with a credit card to create text-based advertisements that appear along the right side of the Google search results screen. Google’s dominance of online advertising in the U.S. is clear, yet globally the company struggles to make these services and others like it relevant. There are ethnic, cultural, religious and nationalistic barriers to entry in many other nations of the world that Google can only overcome by hiring the best possible candidates from. It can be ascertained from evaluating the history of Google acquisitions globally and their hiring practices throughout the highest growth geo-economic sector of BRIC (Brazil, Russia, India & China) nations that the company has a deep appreciation for these cultural variations, and seeks to leverage them for their success. In many respects Google’s global expansion from a leadership perspective parallels the Cultural Dimensions Model as defined by Dr. Geert Hofstede who continues to study today how power distance, uncertainty avoidance, individualism vs. collectivism, and masculinity vs. femininity impact global management (Hofstede, 1983). As a result of their sensitivity to these cultural variations and uniqueness of varying global regions, Google does not chase the lowest cost per programming hour, yet instead thinks strategically how global expansion can compliment their strategic vision. This is exemplified in their approaches to managing Indian development centers, including using coding competitions called Code Jams to recruit the best talent from the Asian region (Puliyenthuruthel, 2005). This infusion of talent, with creativity based on widely varying cultural backgrounds, is contributing to the new product development pipeline at Google because the company concentrates on the collaborative approach to innovation discussed by Bennis (1999) and Maccoby (2007), and also continues to focus on leadership through exceptional programming and logic-based skill sets over seniority. The growth of Google as a computing platform can be directly attributed to this multinational-based approach to enabling innovation globally (Gawer, Cusumano, 2008).

Recommendations for Creating a Healthy Organizational Culture

For Google, their greatest challenges lie ahead, in addressing the enterprise market for their solutions, while at the same time being the search engine of choice for hundreds of millions of people globally. This dichotomy between the need for a more rigid and hierarchical structure to address the unmet needs of the world’s larger corporations who seek to standardize on Google technology and hosted applications is contrasted to the wide-open, creative organizational culture of today that thrives on the rule of 20% generating new product ideas that serve literally millions daily (Anders, 2007). Navigating between these extremes will require the company to consider the following two recommendations.

First, as the company is known for having a highly analytical culture where development is quantified at each stage and even the projects generated during the 20% time of employees is measured, Google needs to take the enterprise-level (or large corporation) needs list and prioritize it, and then put incentives on the top fifty of these unmet needs. The pay-off for solving these top fifty problems is the potential to completely run a separate division of Google solely focused on the enterprise marketplace. The intent of this division is to concentrate on creating entirely new products in response to these unmet needs, with the incentive being what many engineers and technical professionals value most, which is autonomy and the opportunity to spend even more than 20% of their time on their projects of interest. The level of competition this would nurture exceptional levels of creativity and would through the selection process find the most qualified staff members to run the new division. The key aspect of this recommendation is that it sets the foundation for highly effective leadership both from a collaborative standpoint as defined by Bennis (1999) and it also will quickly define those members of the development teams who have the technical competence to earn trust and credibility (Humphreys, Pryor, Haden, Oyler, 2009). As the enterprise market is one that has not nearly been addressed well enough by Google, this strategy is critical both from a strategic as well as a management standpoint.

The second recommendation is to consider the practices Sony and other Japanese manufacturers rely on for their rapid pace of innovation and new product development, and that is to have the engineer who created the new product or service “own” it through the entire validation process. Typically in Google today a new product concept is eventually forwarded to Marissa Myer, Vice President of Product Development (Hof, 2008) for review and eventual presentation to the senior management team. In Sony’s culture a more egalitarian approach was envisioned by the company’s founder since the outset, and it has proven to be successful in finding those product champions who will work the hardest to make a new product a success. This approach would also have within it the opportunity for recognition and one of the most valued aspects of the Google culture, autonomy and freedom to pursue ones’ passion. Organizationally this would also allow for even greater levels of cross-collaboration and team orientation as those with ideas that got past the screening process could potentially lead to entirely new project teams. For Google to succeed over the long-term it must continually grow those innovators they have hired, giving them the chance to experience the autonomy and freedom of attaining their visions of new products over the long-term.

Conclusion

Google is an anomaly of American corporations given its rapid, explosive growth and the ability of its culture to nurture and promote innovation using The Rule of 20%. The management and leadership challenges in such a rapidly growing organization have been discussed in this analysis, with an orientation into what differentiates their unique leadership approaches. The global reach of Google is far beyond being for the lowest cost per programming hour, with a strong concentration on having future products reflect cultural, regional and religious variations between nations. This practices makes the company pay attention with great levels of focus on how regional variations can contribute to their strategic performance. Comparability speaking Google appears to have an appreciation of the tenets of the Cultural Dimensions Model (Hofstede, 1983) and its implications on global growth. The most challenging aspect of the company’s future however is in the area of transitioning to sell more into corporations and enterprises when its development teams and approaches are more oriented towards applications and services that can be readily used by millions of people globally ever day.

References

George Anders. (2007, August 15). Business: Why Google Inspires Diverging Case Studies. Wall Street Journal (Eastern Edition), p. A.2.

http://online.wsj.com/article/SB118712692927897649.html

Warren Bennis. (1999). The end of leadership: Exemplary leadership is impossible without full inclusion, initiatives, and cooperation of followers. Organizational Dynamics, 28(1), 71-80.

Annabelle Gawer, Michael A Cusumano. (2008). How Companies Become Platform Leaders. MIT Sloan Management Review, 49(2), 28-35.

Robert D. Hof. (2008, May). HOW GOOGLE FUELS ITS IDEA FACTORY: CEO Eric Schmidt describes the simple principles driving the company’s steady stream of innovations. Business Week,(4083), 54-58.

http://www.businessweek.com/magazine/content/08_19/b4083054277984.htm

Hofstede, Geert. (1983). National Cultures in Four Dimensions: A Research-Based Theory of Cultural Differences Among Nations. International Studies of Management & Organization, 13(1,2), 46.

John H. Humphreys, Mildred Golden Pryor, Stephanie Pane Haden, Jennifer D. Oyler. (2009). The Leadership of Joseph R. Walker: Towards a Model of Socialized Charisma through Expert Power. Journal of Applied Management and Entrepreneurship, 14(1), 59-81.

Adam Lashinsky. (2008, February). Back2Back Champs. Fortune, 157(2), 70. ).

http://money.cnn.com/2008/01/18/news/companies/google.fortune/index.htm

Michael Maccoby. (2007). DEVELOPING RESEARCH/TECHNOLOGY LEADERS. Research Technology Management, 50(2), 65-67.

Michael Maccoby. (2009). NEEDED: MANAGERS WHO ARE LEADERS. Research Technology Management, 52(2), 58-60.

Josey Puliyenthuruthel in Bangalore. (2005, April). How Google Searches — For Talent. Business Week,(3928), 52.

http://www.businessweek.com/magazine/content/05_15/b3928076.htm

Debra Shipman. (2006). Can we learn a few things from Google? Nursing Management, 37(8), 10-12.

Chris Taylor. (2009, May). Democracy Works. FSB: Fortune Small Business: SPECIAL REPORT: Tech Now, 19(4), 40.

http://money.cnn.com/2009/05/06/smallbusiness/democracy_at_meetup.fsb/index.htm?postversion=2009050706