Management for a Millennial Age: Google’s Success Story

Google is one of the most valuable companies in the world when it comes to hiring, retaining, training, and managing its people. Indeed, in 2009, Fortune magazine ranked it as the best place to work in the United States (Manimala). In order to receive such an accolade, Google must be doing quite a bit right when it comes to its handling human capital—a necessary precondition ultimate business success. Excellent handling of human capital depends on quality management.

Today, Google excels in this area, as demonstrated by the glut of literature analyzing, and praising Google’s management style. But Google insiders—including the founders themselves—will be the first to admit that there has often been skepticism within the company about whether “management” is important at all (Garvin). Indeed, because Google operates in a highly-technical industry, many of its employees are engineers, most of whom would probably prefer to spend their time designing and fixing their product, not engaging in what some of them might consider the “softer” field of management (Garvin). But after experimenting with a completely flat organizational structure in 2002, Google founders Larry Page and Sergey Brin realized that some structure was necessary—particularly for the company to grow (Garvin).

Today, Google trusts many of its closely watched management decisions to Laszlo Bock, its aptly titled “senior vice president of people operations.” (Bryant). So how did they get there? In light of Google’s tremendous success, there is no shortage of literature and analysis of its management style. In surveying the field, three key elements emerged repeatedly, regardless of the person studying Google’s management, their means of publishing their findings, what they were trying to learn, and even when they conducted their analysis (after the totally flat structure attempted in 2002, of course). The prevalence and staying power of these three characteristics demonstrate their importance to Google’s management success (and the ultimate business success that has resulted). Over time, Google’s management style has been successful because it is lean, it is data-driven, and it is predictable. This paper describes each of these characteristics, explores the importance of each of these characteristics, and explains how each of these characteristics is incorporated into the company’s structure and day-to-day operations.

I. Google’s Management is Lean

Larry Page and Sergey Brin’s early experiment with a completely flat management structure continues to inform Google’s approach to management. Healthy skepticism about why there must be levels within the organization—particularly given the ability of overly complex management structures to hinder idea development and value creation (Garvin)—remains a cornerstone of company culture. Consistent with this skepticism, despite its nearly 40,000 employees, Google has only 5,000 managers, 1,000 directors, and 100 vice presidents (Garvin).

This lean structure furthers two important ends. First, it eliminates unproductive micromanagement and meddling. According to one software engineer, “[t]here is only so much you can meddle when you have 30 people on your team, so you have to focus on creating the best environment for engineers to make things happen.” (Garvin.) Second, Google has consistently extolled the value of the individual and limited institutional obstacles that may hinder any employee from achieving all they desire (Manimala). Heavy-handed and overly formulaic management stifles employee autonomy and productivity. Thus, Google’s lean management style, which is cautious about imposing any additional structure or hierarchy within the organization, has fostered the innovation and creativity that has helped the company succeed.

II. Google’s Management is Consistent and Predictable

In an interview with the New York Times, Laszlo Bock provided insight into Google’s management style from his vantage point inside the company. He identified consistency and predictability in the way managers treat their people as a key element of Google’s management success (Bryant; Worstall). This consistency is important at every stage of employment, from hiring to evaluating to promoting. Bock noted that employees can feel highly restricted (and by implication, mistreated) if the rules of the game change based on a manager’s mood, or other factors that are either unpredictable or out of the employee’s control (Bryant). Predictability, on the other hand, creates an environment where employees feel free to do whatever they want, so long as they stick to the established standards. This actually incentivizes creativity and ingenuity in Google’s employees (Worstall). Further, there is less potential for favoritism—actual or perceived—when all employees are evaluated, rewarded, and incentivized based on fair, consistent, and defined standards. Finally, predictability and consistency across departments and managers help Google achieve more consistent results, institutionalize best practices, and eliminate destructive behaviors across the large organization.

III. Google’s Management is Data-Driven

Bock also notes that Google is data-driven when it comes to making decisions, a characteristic which has been noted throughout the literature on Google’s management style (Bryant; Manimala; Worstall; Garvin). In light of developments in data mining, Google has recognized that the cost of analyzing data is relatively low, especially given data’s tremendous predictive ability in most areas. Reliance on and respect for data is seen throughout the company—they use it in hiring, evaluating employees, determining whether to make organizational changes, deciding how to make those changes, and identifying and establishing internal policies and best practices (Manimala). Reliance on data also shores up the consistency and predictability of Google’s management discussed above—when data governs management action, that action is consistent across individuals and predictable based on results.

A particularly interesting (and germane) example of Google’s data-driven management style is its use of the data-collection model to create their internal checklist for what makes a good manager. Google used data-collection to identify eight qualities exhibited by managers with the happiest, productive, and dedicated employees, and institutionalized these qualities as those that a manager at Google should possess and exhibit (Manimala). A manager at Google should be a good coach, empower their team and avoid micromanaging, express interest in team members’ success and well-being, be productive and results-oriented, communicate well and listen to their team, help employees with their career development, have a clear vision and strategy for their team, and have the technical skills necessary to advise the team (Manimala).

Although Google was an early adopter of the practice, reliance on data is en vogue in the management academy today. But Google takes it one step further: they also can recognize certain areas where data is not a helpful metric. For example, Bock notes that transformational leadership skills are difficult to measure, describe, and quantify (Bryant). This difficulty is compounded by the fact that most people think they are good leaders, but very few actually are (Bryant). Google is innovative in recognizing this difficulty, and then subsequently distinguishing between leadership and management. Management can be assessed with more of a checklist-style rubric, as outlined above, whereas a similar approach is not as useful for evaluating and identifying leadership. Thus, Google religiously focuses on data in evaluating management but recognizes that leadership is a separate commodity, which must be examined in a unique way, which does not fit neatly into the objective framework necessary for data-driven analysis. Thus, perhaps paradoxically, when the data suggest that Google ignores data, Google does so. And as a result of its reliance upon a management structure that is lean, consistent and predictable, and data-driven, Google has become one of the most successful companies in the world.

References

Bryant, A. (2013, June 19). In head-hunting, big data may not be such a big deal. New York Times. Retrieved from http://www.nytimes.com/2013/06/20/business/in-head-hunting-big-data-may-not-be-such-a-big-deal.html?_r=2&

Garvin, D. (2013, December). How Google sold its engineers on management. Harvard Business Review. Retrieved from http://hbr.org/2013/12/how-google-sold-its-engineers-on-management/

Manimala, M., & Wasdani, K. (2013). Distributed leadership at Google: Lessons from the billion-dollar brand. Ivey Business Journal, May/June 2013, 1-6.

Worstall, T. (2013, June 21). Lessons from Google's management style. Forbes. Retrieved from http://www.forbes.com/sites/timworstall/2013/06/21/lessons-from-googles-management-style/