When I was younger and first started thinking about my future, I decided to either become a professor or start a company. I felt that either option would give me a lot of autonomy — the freedom to think from first principles and real-world physics rather than having to accept the prevailing “wisdom.”
One night I had a dream (literally) and woke up thinking… what if you could download the whole Web and just keep the links? So I grabbed a pen and scribbled down the details to figure out whether it was really possible.
Every aspect of how Google operated was on the table, and there was even talk about transitioning the company from its quirky start-up structure to a more traditional one organized around business units, to make it easier to develop new revenue streams (another thing the new plan was supposed to address). Most important, the plan needed to establish milestones and a roadmap of which products would ship, and when. In short, Moritz wanted what any sensible, normal board member would want: a comprehensive business plan.
Microsoft did aggressively challenge us, reportedly spending nearly $11B in an attempt to knock Google off its perch as a key player in the Internet search and advertising business. Microsoft programs like MSN Search, Windows Live, and Bing, and acquisitions like aQuantive, failed to achieve true prominence, not because they were poorly executed but because Google was so well prepared for them. We worked incessantly to make search better.
In this traditional command-and-control structure, data flows up to the executives from all over the organization, and decisions subsequently flow down. This approach is designed to slow things down, and it accomplishes the task very well. Meaning that at the very moment when businesses must permanently accelerate, their architecture is working against them.
We both came to Google as seasoned business executives who were pretty confident in our intellect and abilities. But over the humbling course of a decade, we came to see the wisdom in John Wooden’s observation that “it’s what you learn after you know it all that counts.” We had a front-row seat as we helped our founders and colleagues create a magnificent company and used it to relearn everything we thought we knew about management.
In a normal company, the CEO, seeing a bad product, would call the person in charge of the product. There would be a meeting or two or three to discuss the problem, review potential solutions, and decide on a course of action. A plan would come together to implement the solution. Then, after a fair amount of quality assurance testing, the solution would launch. In a normal company, this would take several weeks. This isn’t what Larry did.
The gist of it was that we would compute an “ad relevance score” that would assess the quality of the ad relevant to the query, and then determine whether and where the ad would be placed on the page based on that score. This core insight — that ads should be placed based on their relevancy, not just how much the advertiser was willing to pay and the number of clicks they received — became the foundation upon which Google’s AdWords engine, and a multibillion-dollar business, was built.
And the kicker? Jeff and the team weren’t even on the ads team.
Many people, when considering a job, are primarily concerned with their role and responsibilities, the company’s track record, the industry, and compensation. Further down that list, probably somewhere between “length of commute” and “quality of coffee in the kitchen,” comes culture.
So ask the team: What do we care about? What do we believe? Who do we want to be? How do we want our company to act and make decisions? Then write down their responses. They will, in all likelihood, encompass the founders’ values, but embellish them with insights from the team’s different perspectives and experiences.
Most companies neglect this. They become successful, and then decide they need to document their culture. The job falls to someone in the HR or PR department who probably wasn’t a member of the founding team but who is expected to draft a mission statement that captures the essence of the place. The result is usually a set of corporate saying that are full of “delighted” customers, “maximized” shareholder value, and “innovative” employees. The difference, though, between successful companies and unsuccessful ones is whether employees believe the words.
No vision is worth the paper it’s printed on unless it is communicated constantly and reinforced with rewards.
It’s easy to hold the line in a negotiation when you are, in fact, completely unable to get your side to budge.
In fact, your company’s facilities master plan was mostly likely specifically designed to maximize space and quiet (while minimizing cost). And the higher you are on the corporate hierarchy, the more space and quiet you get. CEOs get the big corner office with lots of space outside the door to house assistants and act as a barrier against everyone else.
Humans are by nature territorial, and the corporate world reflects this. In most companies the size of your office, the quality of your furniture, and the view from your window connote accomplishment and respect. Conversely, nothing reduces smart people to whiny complainers as quickly as a new office floor plan. It’s not uncommon for interior design to become a passive-aggressive means of literally keeping people “in their place.”
If we have data, let’s look at data. If all we have are opinions, let’s go with mine.
For a meritocracy to work, it needs to engender a culture where there is an “obligation to dissent.” If someone thinks there is something wrong with an idea, they must raise that concern. If they don’t, and if the subpar idea wins the day, then they are culpable. Some may feel uncomfortable raising dissenting views, particularly in a public forum. That’s why dissent must be an obligation, not an option.
Your title makes you a manager. Your people make you a leader.
You want to invest in the people who are going to do what they thinks is right, whether or not you give them permission.
Arrogance, for example, is a knavish tendency that his a natural by-product of success, since exceptionalism is fundamental to winning. Nice humble engineers have a way to becoming insufferable when they think they are the sole inventors of the world’s next big thing. This is quite dangerous, as ego creates blind spots.
There is no such thing as a minor lapse of integrity.
There is a tipping points in knave density. It approaches a critical mass — which is smaller than you think — and people start to believe they need to be knave-like to succeed, which only exacerbates the problem.
Burnout isn’t caused by working too hard, but by resentment at having to give up what really matters to you.
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.
Excellence in everything they do, superior customer service, and respect for the individual.
Find a page that a lot of other pages point to, and you have probably found a page with higher-quality content.
New technologies tend to come into the world in a very primitive condition, often designed for very specific problems. The steam engine was used as a nifty way to pump water out of mines long before it found its calling powering locomotives. Marconi sold radio as a means of ship-to-shore communications. Bell Labs was so underwhelmed by the commercial potential of the laser when it was invented in the ‘60s that it initially put off patenting it. Even the Internet was initially conceived as a way for scientists and academics to share research.
Competition makes you better. It keeps you sharp. We are all human and subject to complacency, no matter how often we tell ourselves to stay on our toes. Nothing lights a fire like a competitor. When Microsoft launched the Bing search engine in 2009, we were concerned enough to kick off an all-hands-on-deck process to intensify our efforts on search. This planted seeds that led to new features such as Google Instant and Image Search. You can draw a line from the launch of Bing to these great new features.
Smart coaches know that no amount of strategy can substitute for talent, and that is as true in business as it is on the field. Scouting is like shaving: If you don’t do it every day, it shows.
Passionate people don’t ware their passion on their sleeves; they have it in their hearts. They live it. Passion is more than resume-deep, because its hallmarks — persistence, grit, seriousness, all-encompassing absorption — cannot be gauged from a checklist. The passionate person will often talk at length, aka ramble, about his pursuits.
She calls it a “growth mindset.” If you believe that the qualities defining you are carved in stone, you will be stuck trying to prove them over and over again, regardless of the circumstances. But if you have a growth mindset, you believe the qualities that define you can be modified and cultivated through effort. You can change yourself; you can adapt; in fact, you are more comfortable and do better when you are forced to do so.
Dweck’s experiments show that your mindset can set in motion a whole chain of thoughts and behaviors: If you think your abilities are fixed, you’ll set for yourself what she calls “performance goals” to maintain that self-image. But if you have a growth mindset, you’ll set “learning goals” — goals that’ll drive you to take risks without worrying so much about how, for example, a dumb question or a wrong answer will make you look. You won’t care because you’re a learning animal, and in the long run you’ll learn more and scale greater heights.
“I have no special talents. I am only passionately curious.” That’s what Einstein claimed.
The problem with overdependence on recruiters is that it becomes tempting for recruiters to stop looking for the cream of the crop and settle for the half-and-half and even for the skim milk. They don’t have to live with their mistakes, the company does.
Meetings are indeed how we spend the majority of our time. The nice thing about meetings is that the higher up you are on the food chain, the less you have to prepare for them. When you’re the top dog, other people prepare for the meeting while all you have to do is listen and opine.
Conducting a good interview requires something different: preparation. This is true regardless of whether you’re a senior executive or a fresh associate. Being a good interviewer requires understand the role, reading the resume, and — most important — considering your questions.
You need to ask challenging questions that push the candidate. What was the low point in the project? Or why was it successful? You want to learn if the candidate was the hammer or the egg, someone who caused a change or went along with it.
Your objective is to find the limits of his capabilities, not have a polite conversation, but the interview shouldn’t be an overly stressful experience. The best interviews feel like intellectual discussions between friends (“What books are you reading right now?”). Questions should be large and complex, with a range of answers (to draw out the person’s thought process) that the interviewer can push back on (to see how the candidate stakes out and defend a position). It’s a good idea to reuse questions across candidates, so you can calibrate responses.
How did you pay for college? If I were to look at the web history of your browser, what would I learn about you that isn’t on your resume?
Generic answers to these questions indicate someone who lacks insight on issues. You want the answers to be interesting or at least specific.
The brainteasers also became a lightning rod for criticism as an elitist tool. To those critics, let us say once and for all: You are right. We want to hire the best minds available, because we believe there is a big difference between people who are great and those who are good, and we will do everything we can do to separate the two.
One of the early engineers at Google wanted to bring his ferret to the office. We said yes. He didn’t haggle over salary.
You have done all this work to create a hiring process that brings in all these awesome smart creatives, and how do they pay you back? By leaving! That’s right. News flash: When you hire great people, some of them may come to realize that there is a world beyond yours. This isn’t a bad thing, in fact it’s inevitable by-product of a healthy, innovative team. Still, fight like hell to keep them.
The best way to retain smart creatives is to not let them get too comfortable, to always come up with ways to make their jobs interesting.
The best smart creatives often want to leave so they can go start something on their own. Don’t encourage this, but do ask them for their elevator pitch.
Just because a job ends, your relationship with your employee doesn’t have to. The first thing you should do when a valuable employee tells you he is leaving is try to change his mind. The second is congratulate him on the new job and welcome him to your company’s alumni network.
Hire people who are smarter and more knowledgeable than you are. Don’t hire people who you can’t learn from or be challenged by.
They described product management in their business as a science, driven by precise data garnered from focus groups and product performance. “It’s like driving forward by looking in your rearview mirror.”
Think about your ideal job, not today but 5 years from now. Where do you want to be? What do you want to do? How much do you want to make? Write down the job description: If you saw this job on a website, what would the posting look like? Now fast forward four or five years and assume you are in that job. What does your resume look like? What’s the path you took from now to then to get to your best place?
Keep thinking about that ideal job, and assess your strengths and weaknesses in light of it.
One of the best, easiest ways to get ahead in a field is to know more about it. The best way to do that is to read. People always say they don’t have the time to read, but what they are really saying is that they aren’t making it a priority to learn as much as they can about their businesses.
It is the ultimate luxury to combine passion and contribution. It’s also a very clear path to happiness.
For leaders, decisions are when the hard work begins; there’s a reason why the word “tough” is so often followed by “decision.” Formulating a strategy, hiring the right people, and creating a unique culture are all preliminaries to the fundamental activity of all businesses and business leaders: decision-making.
Different institutions take different approaches to decision-making based on their hierarchical structure. The Marines (top-down) keep it simple: One guy gives the orders to take the hill; everyone else takes the hill. Most big corporations (bureaucratic) have far more analyses to perform before they can decide the best course of action. Do they have all the data they need? Have the analysts crunched it? Did they calculate pro forma revenues and EBITDA? And the hip start-up (enlightened), the CEO proclaims that she works for the employees so decisions are made by consensus. Everyone gets a say and the arguments are collegial, considerate, and last forever.
The answer lies in understanding that when it comes to making decisions, you can’t just focus on making the right one. The process by which you reach the decision, the timing of when you reach it, and they way it is implemented are just as important as the decision itself. Blow any of these, and the outcome will likely be negative. And since there’s always another decision to be made, the impact of a poorly executed decision-making process can reverberate past that one issue.
Although he believed that staying in the China market was the best thing for the company, he also knew that both of the founders now disagreed with him.
Eric knew that Larry was on Sergey’s side, which meant that the decision was effectively made. But it was critically important that all of the members of his team be heard and have a vote.
The morning we made the announcement, we got several calls from government officials to our Beijing office wondering if it was some sort of joke. No one does this, one of them told us. Everyone just leaves quietly.
Problem well put is half solved.
The plural of anecdote is data.
Revenue solves all known problems.
Reaching this best idea requires conflict. People need to disagree and debate their points in an open environment, because you won’t get buy-in until all the choices are debated openly. They’ll bobblehead nod, then leave the room and do what they want to do. So to achieve true consensus, you need dissent.
If everyone is thinking alike, then somebody is not thinking.
The executive in charge of the product had gathered plenty of data, but the numbers were inconclusive. So he ordered up more research. Then, when the new set of data was still not helpful, he ponied up for yet another feeding at the data trough. Bill got wind of this and ordered a stop to the dillydallying. “Do something, even if it’s wrong.”
At first they didn’t make much progress. But the sheer drudgery of repeating the same argument every day helped spur the team to delve even deeper into the data we had on how our ads engine was performing, and over the weeks we performed analyses that demonstrated that the deal wasn’t as risky as we had originally thought.
Then, after reassuring the argument’s losers and articulating what needs to be done, the decision-maker must ensure that everyone who was involved does one of two things: disagree but commit, or escalate publicly. If it’s the latter, then the escalator must let the decision-maker know the reason for her objections, and how and to which higher-up she plans to escalate. (“I’m sorry, I still don’t think this is the right decision because of… How about we see what Barrack thinks?”) Public escalation is a valid option and should be encouraged, because if you don’t it will just happen anyway, only with a lot more rancor.
The forum for decision-making is almost always a meeting, which may be the most hated of all business practices. People complain about meetings and how they are a great waste of time, but in fact a well-run meeting is a great thing. It’s the most efficient way to present data and opinions, to debate issues, and yes, to actually make decisions.
If you attend the meeting, attend the meeting. Multitasking doesn’t work. If you are in a meeting and using your laptop or phone for something not related to the meeting, it’s obvious your time is better spent elsewhere.
Lawyers are, by training, backward looking. This make sense, since so much of the law is determined by precedent: What happened before dictates what is OK going forward. They are also highly risk-averse. This also makes sense, because so many business lawyers practice in law firms and the job of a corporate law firm is to keep its clients out of trouble.
The world’s best athletes need coaches, and you don’t?
In this world, information is hoarded as a means of control and power.
There is an ancillary benefit to sharing the board materials: quality. While people will do a good job in preparing something for the board’s consumption, they will do a great job if they know that material will be shared with the entire company.
If someone is in charge of a business and can’t rattle off the key issues she faces in a matter of ten seconds, then she’s not up to the job. A hands-off approach to leadership doesn’t cut it anymore. You need to know the details.
No one wants to be the bearer of bad news. Yet as a leader it is precisely the bad news that you most need to hear. Good news will be just as good tomorrow, but bad news will be worse.
Eric calls our approach to transparency a “climb, confess, comply” model. Pilots learn that when they get in trouble, the first step is to climb: Get yourself out of danger. Then, confess: Talk to the tower and explain that you screwed up and how. Finally, comply: When traffic controllers tell you how to do it better next time, do it.
In most aspects of life, you need to say something about 20 times before it truly starts to sink in. Say it a few times, people are too busy to even notice. A few more times, they start to become aware of a vague buzzing in their ear. By the time you’ve repeated it 15 to 20 times you may be completely sick of it, but that’s about the time people are starting to get it. So as a leader you want to habitually overcommunicate. “Repetition doesn’t spoil the prayer.”
His response to a question about his success as a writer: “I leave out the parts that people skip.”
Only hold it once. If you read the note and know what needs doing, do it right away. Otherwise you are dooming yourself to rereading it, which is 100 percent wasted time.
The goals of a board meeting are harmony, transparency, and advice. You want to exit the meeting with the board’s support of your strategy and tactics. You need to be completely transparent in everything you communicate. And you want to hear their advice, even if you plan to ignore it — they are usually trying to be helpful, and cannot have all the context that you have. Another way to put this: You want their noses in, but fingers out.
But the steady state of a successful Internet Century venture is chaos. When things are running perfectly smoothly, with people and boxes on charts enjoying a 1-to-1 relationship, then the processes and infrastructure have caught up to the business. This is a bad thing. When Eric was CEO at Novell, the company was running like a well-oiled machine. The only problem was that the new-great-product cupboard was bare. “If everything seems under control, you’re just not going fast enough.”
The business should always be outrunning the processes, so chaos is right where you want to be. And when you’re there, the only way to get things done is through relationships. Take the time to know and care about people.
Creating a culture of ooze isn’t a new idea. Thomas Edison became famous for the unique, throw-it-against-the-wall-and-see-if-it-sticks environment at his Menlo Park lab in the 19th century. In the 20th century, AT&T’s Bell Labs and Xerox’s PARC were renowned incubators of innovation. The difference now, though, is the speed and scale at which the Darwinian struggle plays out. The Internet provides everyone with the tools of creation; moreover, it is an ideal testing ground, allowing for prototypes to be rolled out and meaningful data to be collected in a fraction of the time needed before. Species evolution takes eons, but today’s process of idea evolution can work at Internet speed.
The first follower is what transforms a lone nut into a leader.
If you want to create a car that gets 10% better mileage, you just have to tweak the current design, but if you want to get one that gets 500 miles per gallon, you need to start over. Just the thought process — How would I start over? — can spur ideas that were previously not considered.
10% also works because creativity loves constraints.
In April 2000, Sun’s market cap was $141B. By 2006, Windows-based servers had taken over the market, while the share of Sun’s machines languished in the single digits. Sun was sold to Oracle in 2009 for $7.4B.
New challenges usually fail to understand the extent of the legal and regulatory tools that incumbents have in their arsenal.