Alexander, Anaya Ashe
Oregon Institute of Technology
Abstract
Introduced
by a brief history of the company as well as an analysis of googles employee
culture and how it is synchronous with googles unique management style. Followed
by an in depth managerial analysis of the world industry leader Google, with an
emphasis on Fayol’s four functions of management. How Fayol’s functions apply
to googles management practices; specifically Googles use of Objectives and Key
Results (OKRs), how that method has affected the company’s ability to innovate
and how the company turned the management world on its head with Project Oxygen
to redefine what it means to manage.
Keywords: Google, leadership, organizational behavior,
4 Functions of Management, Project Oxygen, OKRs
In the early 1900s Henri Fayol, the CEO of a large steel
company, weighed his twenty years of experience and came to the conclusion that
“the success of an enterprise generally depends much more on the administrative
ability of its leaders than their technical ability.” (Williams,
2015)
A millennium later, googles very own analytics would lead them to the exact
same conclusion. Why? Because the best ideas and employees can only take a
company so far;
it takes the best management to turn a company into a world industry leader.
it takes the best management to turn a company into a world industry leader.
Background.
PhD candidates Larry Page and Sergey Brin conceived the internet search engine
at Stanford University in 1996 which they originally named BackRub. It wasn’t
until 1997 that they would change the name and officially register for the
domain Google.com. In 1998 the team
received capital to begin development and by 1999 a team in a Palo Alto garage
had become a Company. By 2001, Google
started to really challenge the market by taking an old idea and turning out a
real product. The idea was PageRank, which Google patented in 2001. Webmasters
of the time had made great effort to create a system for ranking pages in
relation to the webpages authority. But as Steve Jobs Says “Real Artist Ship.”
In 2004 Google continued to create and ship innovative ideas by releasing Gmail & Google Earth. Gmail quickly took over the Email market previously held by Microsoft and Yahoo. As if the world was not enough, in 2005 Google partnered with NASA to create Google Moon and Google Mars. 2006 brought even more growth with the company’s purchase of YouTube and the launch of Google Docs. Thanks to googles management, YouTube has since become a video search entity of its own and an alternative to television.
Google currently holds 72.48% of the Global market share for Search Engines, and has no plans on stopping there. Google has purchased companies in every market imaginable to be able to never stop innovating. The company’s newest endeavor; Alphabet Inc., takes Jobs’ idea that “Real artist ship” to a whole new level. With their websites description clearly labeling themselves as “a holding company that gives ambitious projects the resources, freedom, and focus to make their ideas happen.”. (Alphabet Inc., 2016)
To do all of this, Google has and continues to hire the best employees in the world, but it is their passion for the best management that has turned the company into a world industry leader.
In 2004 Google continued to create and ship innovative ideas by releasing Gmail & Google Earth. Gmail quickly took over the Email market previously held by Microsoft and Yahoo. As if the world was not enough, in 2005 Google partnered with NASA to create Google Moon and Google Mars. 2006 brought even more growth with the company’s purchase of YouTube and the launch of Google Docs. Thanks to googles management, YouTube has since become a video search entity of its own and an alternative to television.
Google currently holds 72.48% of the Global market share for Search Engines, and has no plans on stopping there. Google has purchased companies in every market imaginable to be able to never stop innovating. The company’s newest endeavor; Alphabet Inc., takes Jobs’ idea that “Real artist ship” to a whole new level. With their websites description clearly labeling themselves as “a holding company that gives ambitious projects the resources, freedom, and focus to make their ideas happen.”. (Alphabet Inc., 2016)
To do all of this, Google has and continues to hire the best employees in the world, but it is their passion for the best management that has turned the company into a world industry leader.
Culture.
All extremely successful companies who have been equally successful at
innovating new ideas have created their own culture. Google actively creates a
hybrid culture based on analytics that maximizes effectiveness and innovation.
Interestingly enough, the Google analytics have birthed a culture that contain
elements of many previously successfully and innovative companies such as
Macintosh, Enron, Skunk Works, and Disney.
Enron (though known for its evil nature) was incredibly good at innovating new; albeit illegal, ways to create profits. The corporate culture of aggressive, double-or-nothing, risk takers created an ideal environment for innovation. Google has adopted a moral version of this culture to add to their own; it asserts the idea that “More risk, while daunting, means more fresh ideas that may be what a company needs rise to the next level.” (Larry Page).
Google takes Enron’s ambition for innovating new ideas, then amplifies that notion by coupling it with those ideas by utilized Macintoshes cultural trait that “Real artist ship”.
The Google culture is not solely about taking risks in an attempt to short circuit the law of averages, it is also about collegiality and passion. Skunkworks team leader Clarence Johnson understood that the creative process to great minds is enjoyable and when employees enjoy their work enough they put aside personal differences for the greater good of the project. Google understands this as well and in an even greater way than Johnson ever did with his team. Google keeps employees happy, engaged, and appreciated. To name only a very few examples of how Google does this is through; free chef prepared meals, massages, child care, unconventional office spaces built to focus creativity, as well as off the wall freedoms such as the ability to ride bicycles through buildings, and creative management ideas. Paired with Googles relatively flat organizational structure, this culture builds a strong level of trust between employees as well as management throughout all levels of the company.
Don’t be fooled, Google is no full blown democracy (although Google does let employee’s way in on decisions by employing google design partner Jake Knapp’s “Note and Vote” meetings). Much like Disney’s approach to managing, Google leaders and employees know that the leader makes the final decision, and that said decision needs to be carried out to the best of the group’s ability. Even if others in the team do not agree with the decision made, Johnson of Skunkworks called it “Signing up”. (Bennis & Biederman, 1996)
Googles culture is an incredible innovation all its own, but the culture is only a reflection of Fayol’s Four Functions of Management working synergistically throughout the company.
Enron (though known for its evil nature) was incredibly good at innovating new; albeit illegal, ways to create profits. The corporate culture of aggressive, double-or-nothing, risk takers created an ideal environment for innovation. Google has adopted a moral version of this culture to add to their own; it asserts the idea that “More risk, while daunting, means more fresh ideas that may be what a company needs rise to the next level.” (Larry Page).
Google takes Enron’s ambition for innovating new ideas, then amplifies that notion by coupling it with those ideas by utilized Macintoshes cultural trait that “Real artist ship”.
The Google culture is not solely about taking risks in an attempt to short circuit the law of averages, it is also about collegiality and passion. Skunkworks team leader Clarence Johnson understood that the creative process to great minds is enjoyable and when employees enjoy their work enough they put aside personal differences for the greater good of the project. Google understands this as well and in an even greater way than Johnson ever did with his team. Google keeps employees happy, engaged, and appreciated. To name only a very few examples of how Google does this is through; free chef prepared meals, massages, child care, unconventional office spaces built to focus creativity, as well as off the wall freedoms such as the ability to ride bicycles through buildings, and creative management ideas. Paired with Googles relatively flat organizational structure, this culture builds a strong level of trust between employees as well as management throughout all levels of the company.
Don’t be fooled, Google is no full blown democracy (although Google does let employee’s way in on decisions by employing google design partner Jake Knapp’s “Note and Vote” meetings). Much like Disney’s approach to managing, Google leaders and employees know that the leader makes the final decision, and that said decision needs to be carried out to the best of the group’s ability. Even if others in the team do not agree with the decision made, Johnson of Skunkworks called it “Signing up”.
Googles culture is an incredible innovation all its own, but the culture is only a reflection of Fayol’s Four Functions of Management working synergistically throughout the company.
Organizing.
Googles pattern of hybrid-ing
older great ideas into innovative actions continues into the company’s
organizational structure. Google has a matrix type organizational structure
that utilizes functional and product departmentalization depending on the
manner of the department. This is beneficial to Googles creativeness because it
allows both specializations in a specific area of expertise and
cross-department coordination. (Williams, 2015) . Cross-department
coordination and collaboration is emphasized by what Nathaniel Smithson (2015) describes
as having “considerable flatness” in their organizational structure. This means
that employees have duel or even multiple reporting relationships. To provide
example, an employee may report to both a functional manager as well as their
sales manager. (WebFinanceInc., n.d.) This allows Google
to cut out middle management and create an organizational structure in which
frontline employees, teams, or groups can directly contact top management such
as CEO Larry Page himself, and vice versa. This has large advantages for a
company bent on innovation. It utilizes all employee’s creativity, be it the
janitor or the CFO, so no great ideas are lost. It also takes away risk of
upper level decisions becoming disassociated from the employees, partners, or
consumers, thus providing the firm the ability to respond in a timelier fashion
to changing market conditions or demographic preferences. (WebFinanceInc., n.d.) (Smithson,
2015)
Controlling.
Objectives and Key Results (OKRs) originally invented by John Doerr while
at Intel, is a method of tracking goals and their outcomes. Google evaluates
progress being made on a quarterly basis in reference to its corporate OKRs which
allows them to dynamically evaluate and adjust their smaller goals to align and
make their main objective successful. Doers OKRs have sat as the keystone to
the company’s structure for controlling, planning, and evaluating, since its
Palo Alto garage in 1999, and while this method serves as the compass for company
goals, Google has taken it even further.
Planning.
Google institutes OKRs at every level. This means the same practice for
setting and evaluating goals is used at the company level, the team level, at a
managerial level, as well as at a personal level. These OKRs in tandem with
Googles Organization style aligns every team member’s goals from the top down and
helps remove elements that can cause the five dysfunctions that teams face on a
daily basis; inattention to results, avoidance of accountability, lack of
commitment, fear of conflict, and absence of trust. (Lencioni, 2002) For this process to work, a few key
objectives must be met. Key results of OKR goals must be easily measurable;
Google uses a 0.0-1.0 scale when grading key results. (Klau, 2012)
This helps overcome inattention to results as well as avoidance of
accountability.
Secondly, objectives must be ambitious and make the goal setter feel almost “uncomfortable” as former product developer Rick Klau describes it. Keep in mind Googles culture; “More Risk…means more fresh ideas…”. This objective helps alleviate fear of failure as well as fear of conflict which are toxic to innovation.
Thirdly, low OKR grades should not be punished but rather viewed as data to help refine next quarters OKRs. (Klau, 2012) This is an
interesting idea because average companies have always associated maximum goal
accomplishment as being perfect 1.0’s across the board. Google on the other
hand, actually wants OKR grades in between 0.6 and 0.7. If OKRs are
consistently receiving a perfect 1.0, then the OKRs being set are not ambitious
enough. This objective helps alleviate the absence of
trust among colleagues because googlers do not have to lie in fear of
reprimand.
Lastly, OKRs are public. Google stores past and present OKR data and makes it available to everyone in the company. (Klau, 2012) This last objective
of the OKRs hits on four of the five dysfunctions; inattention to results,
avoidance of accountability, fear of conflict, and absence of trust.
As you can see, OKRs have been a cornerstone of Googles management success that interacts through all of Fayol’s four Function of Management.
With all of this cooperation, openness, and general good moral in the corporation, it is easy to fall into what is known as Groupthink – The intense pressure to agree.(Williams, 2015) Groupthink is often invoked by fear of
conflict or absence of trust. Jake Knapps Note and Vote Meetings found the best
way to “short circuit” the tendency to groupthink at meetings. The short of the
idea is that each attendee of the meeting begins by writing down as many ideas
as they can in ten minutes. These ideas are not shared yet. Instead the
attendees are provided two minutes to review their own ideas and pick their two
favorite ideas from their own list. After the two minutes, all attendees individually
share her or his top ideas as one specified person writes the groups ideas on
the board. At this time no one pitches their ideas; these ideas are only shared
and recorded. The timer is again set for five minutes in which time the
attendees commit their vote for best idea onto a piece of paper.
Secondly, objectives must be ambitious and make the goal setter feel almost “uncomfortable” as former product developer Rick Klau describes it. Keep in mind Googles culture; “More Risk…means more fresh ideas…”. This objective helps alleviate fear of failure as well as fear of conflict which are toxic to innovation.
Thirdly, low OKR grades should not be punished but rather viewed as data to help refine next quarters OKRs.
Lastly, OKRs are public. Google stores past and present OKR data and makes it available to everyone in the company.
As you can see, OKRs have been a cornerstone of Googles management success that interacts through all of Fayol’s four Function of Management.
With all of this cooperation, openness, and general good moral in the corporation, it is easy to fall into what is known as Groupthink – The intense pressure to agree.
Votes are counted and documented on
the whiteboard. At this time any attendee is allowed to pitch an idea to the
group but regardless of the validity
of the pitch, attendees cannot
change their vote. Finally, the decision. As discussed in the section about
googles culture, an important part about Note and Vote is that at this point;
the highest authority at the meeting makes the final decision. The decider can
choose to honor the votes or not. The idea is that after the final decision is
made and attendees have had a chance to weigh in on the decision, those
attendees must now get on board with whatever decision the decider has made.
This alleviates tiptoeing around personal feeling in lieu of getting the group
onboard with a decision quickly and efficiently. (Knapp, 2014)
Leading. It’s what google does.
When Google looked to evaluate what it is that successful managers do, they
found the most successful management tool is: leadership.
This was not a midnight CEO epiphany, but data driven results derived from a multiyear study which google cleverly named; Project Oxygen. Googles conclusion from over 10,000 observations and 400 pages of notes produced from interviews, performance evaluations, management awards, surveys and the like was the same conclusion Fayol had made a millennium earlier. “the success of an enterprise generally depends much more on the administrative ability of its leaders than their technical ability.” (Williams, 2015) .
While Fayol’s statement has a very profound ring to it, what does it entail? Googles analytics provided by Project Oxygen enabled Google to produce the eight behaviors that successful managers perform.
This was not a midnight CEO epiphany, but data driven results derived from a multiyear study which google cleverly named; Project Oxygen. Googles conclusion from over 10,000 observations and 400 pages of notes produced from interviews, performance evaluations, management awards, surveys and the like was the same conclusion Fayol had made a millennium earlier. “the success of an enterprise generally depends much more on the administrative ability of its leaders than their technical ability.”
While Fayol’s statement has a very profound ring to it, what does it entail? Googles analytics provided by Project Oxygen enabled Google to produce the eight behaviors that successful managers perform.
Beginning with the most important behavior;
1.
Be a good coach.
2.
Empower; don’t micromanage.
3.
Be interested in direct reports, success, and
well-being.
4.
Don’t be a sissy: Be productive and results
oriented.
5.
Be a good communicator and listen to your team.
6.
Help employees with career development.
7.
Have a clear vision and strategy for the team.
8.
Have key technical skills so you can advise the
team.
So while many managers are hired
because of their qualifications of key technical skills for the position, it is
the least important of the eight behaviors. Project oxygen proved that in fact
the best trait to have despite the profession is actually the ability to coach,
and the commonality between all eight behaviors was deep commitment to employee
success. Successful managers want their employees to be successful.
Not just “make the quota” successful, but truly successful as a person. These successful managers are not just showing up to work but are being proactive in regards to strengthening employees individual and team prowess. Many managers lose sight of the fact that they are employed to lead, not to do the same job as the employees they are managing.
In the book The Five Dysfunctions of a Team, the main character Katheryn, a newly hired CEO shows incredible resolve to turn a company, who despite the fact that it had the most experienced and talented executives, more money, and better products than their competitors, were scraping by as third in the market. Katheryn has many situations in which her decisions were questioned as the CEO, especially when she chooses to coach the executive staff on teamwork instead of chasing down new clients, or purchasing young cutting edge companies in an effort to expand.(Lencioni, 2002)
She understood what Googles project oxygen has proven. The best ideas and employees can only take a company so far; it takes the best management to turn a company into a world industry leader.
Not just “make the quota” successful, but truly successful as a person. These successful managers are not just showing up to work but are being proactive in regards to strengthening employees individual and team prowess. Many managers lose sight of the fact that they are employed to lead, not to do the same job as the employees they are managing.
In the book The Five Dysfunctions of a Team, the main character Katheryn, a newly hired CEO shows incredible resolve to turn a company, who despite the fact that it had the most experienced and talented executives, more money, and better products than their competitors, were scraping by as third in the market. Katheryn has many situations in which her decisions were questioned as the CEO, especially when she chooses to coach the executive staff on teamwork instead of chasing down new clients, or purchasing young cutting edge companies in an effort to expand.
She understood what Googles project oxygen has proven. The best ideas and employees can only take a company so far; it takes the best management to turn a company into a world industry leader.
In an effort to approximate how
google has gone from a garage to a world industry leader in only seventeen
years I find three key ideologies practiced in everything Google does;
·
Real artist ship
·
Successful managers want their employees to be
successful.
·
A thorough understanding that success of an
enterprise depends on the administrative ability of its leaders.
This last one is the main key; the
best ideas and employees can only take a company so far, it takes the best
management to turn a company into a world industry leader.
References
Bennis, W., & Biederman, P. W. (1996). Organizing
Genius. Addison Wesley.
Inc., W. (n.d.). flat
organization. Retrieved from businessdictionary.com:
http://www.businessdictionary.com/definition/flat-organization.html
Klau, R. (Producer).
(2012). How Google sets goals: OKRs [Motion Picture]. Retrieved from
https://library.gv.com/how-google-sets-goals-okrs-a1f69b0b72c7#.csg52t5b1
Knapp, J. (2014). Note-and-vote:
How to avoid groupthink in meetings. Retrieved from Google Ventures:
https://library.gv.com/note-and-vote-how-to-avoid-groupthink-in-meetings-24e829e43295#.hlnjzsmps
Lencioni, p. (2002). The
Five Dysfunctions of a Team. San Francisco, CA: Jossey-Bass.
Smithson, N. (2015). Google’s
Organizational Structure & Organizational Culture. Retrieved from
Panmore Institute:
http://panmore.com/google-organizational-structure-organizational-culture
WebFinanceInc.
(n.d.). Matrix organizational Structure. Retrieved from
BusinessDictionary.com: http://www.businessdictionary.com/definition/matrix-organization.html
Williams, C. (2015). MGMT
Principals of Management (7th ed.). Mason, Ohio: Cengage Learning.
