Summing Up
How Transferable is the Google "School of Management"?
Responses to this month's column suggest a great deal of respect for what Google's management has been able to achieve, both in terms of a strategy for bringing high-tech services to market and in creating a culture that attracts and retains creative people—at least up to now. But there was a healthy skepticism about how influential Google's approach will be in other organizations, particularly outside the realm of high technology.
There was general admiration for what Google has accomplished. Howard Anderson commented that "We are all in the business of Pattern Recognition. The patterns may have forever changed … the sorts of organizations that thrived under one set of Rules (GM 101) will founder in Rules (GooGoo 101)." He added, "But not all of them." Saravana characterized differences in the GM and Google "schools" this way: "The difference between the 2 schools you highlight is less about 'how to manage'--and more about answering the question 'what are we trying to manage?" The GM/Sloan approach, Saravana continues, was about building a business around a product-market view of the world; it was all about the automobile. The Google approach, by contrast, "is more an organization building. The premise is if you build an investment business and bring in enough great talent, they will devise a range of new businesses."
Other respndents expressed skepticism about the uniqueness of a "Silicon Valley" approach to management. Kapil Kumar Sopory, for example, said: "The management approach of Google is noteworthy and it serves the organization properly, but this may not be universalised… There are many schools of management across the globe which match … (this) School of Management and produce high quality talent."
Winfried Hermann Schoepf expressed concerns about whether we will be admiring Google's approach to management in the future. "I have some doubt about this being a sustainable corporate culture," he wrote. "Time and size will see to it that the 'structure' takes control… Fluctuation (innovation?) happens more at the fringes and the 'creative' parts of the company, less within the structure. And this is what makes corporations 'age' at the same time they grow."
Along this same vein of thought, Henry Ellis added that wWhile Google is massive and profitable, "they have one product that makes all the money … the primary key to their success is patience, determination, and luck, with luck being the spark."
Questions about the degree to which the Google model is transferable were central to several of the responses. As Carl X. Parks put it, "Organizations can utilize tools from Google's best practices to enhance or redevelop their own (where applicable). But as a whole, this may not always be directly transferable to other industries beyond the technology infrastructure."
Gerald Nanninga added: "The pressure to turn a profit in massively competitive mature industries with razor thin margins makes it hard to … (do what Google has done). And the business world is a lot more like this than it is like Google."
How transferable is the Google School of Management? What do you think?
Original Article
During graduate school at Stanford University, I participated in a Sloan Program, a spinoff of a program begun at M.I.T. Now I will really date myself. In those days it was a custom in the program for participants to meet with the program's namesake, Alfred Sloan. Although he was becoming feeble, his mind was still sharp. Mr. Sloan would talk about innovations he introduced as head of General Motors. They included a multibrand strategy with products aimed at different market segments, the introduction of new models annually, and a decentralized organization that fostered delegation and distributed authority.
As a package, these ideas and others had a significant influence on management practice in the mid- to late-twentieth century. They still have a great deal of relevance for business, and represent an important school of management thought.
I'm reminded of this by a wave of new books describing management practices in Silicon Valley firms, many of them from founders and managers of high tech firms who are just now finding time to write about their accomplishments. Several have been inspired by experiences at Google (which may or may not be a signal that the best times are over for the company).
Among these, CEO Eric Schmidt and Jonathan Rosenberg have written a book, subtitled How Google Works. It is of particular interest for several reasons, not the least of which is that Schmidt inherited day-to-day leadership from the founders of the company cited in 2007 as one of three prime example firms demonstrating "the future of management" by thought leader Gary Hamel.
Schmidt and Rosenberg describe a philosophy that is centered around hiring "smart creatives," not just great product designers or managers, who are passionate about something, To do it, they first create a culture designed to attract them, then give them the latitude to explore their creative ideas. These creatives come from all kinds of backgrounds, especially liberal arts and engineering.
Hiring talent, the authors say, is the most important job of a manager. In fact, they devote more attention to hiring than they give to strategy. Another important task of leadership is that of maintaining a culture designed to retain that talent. A long discussion of the organization's culture is centered around ideas such as minimal formal organization of people working in small teams; crowding employees together in ways that resemble a Stanford dorm room; messiness as a virtue; staying functionally organized as long as possible; one-day reorganizations; and, again, hiring for and rewarding passion rather than experience or particular skills.
This philosophy of management, wherever it is found in the Silicon Valley, was in some ways inspired by Bill Hewlett and David Packard, founders of Hewlett-Packard and proponents of the "H-P Way" of doing things. They populated their organization with the brightest of Stanford's engineering-business graduates. Later, graduates of Stanford's computer sciences department joined the cohort. HP benefitted directly from Stanford's multidisciplinary educational strategy that contributed to the background of the company's new hires.
It's clear that Google has found a way to attract and get the best out of young, creative recruits. The question is whether this model represents a generally applicable "school" of thought that will influence and sustain many other companies into the future. Nicholas Lemann, writing in The New Yorker, finds this notion suspect. In particular, he questions whether the model's effectiveness will wane with Google's continued growth and maturity.
Nevertheless, Google has influenced the management approaches of many other high tech firms with bright futures. Will its long-term influence be equivalent to that of Sloan and GM in the 1920s and 1930s? Is there a Stanford-Silicon Valley "School of Management," one characterized by practices at firms like Google? What do you think?
To Read More:
Gary Hamel, The Future of Management (Boston: Harvard Business School Press, 2007)
Nicholas Lemann, When G.M. Was Google: The Art of the Corporate Devotional The New Yorker, December 1, 2014, pp. 76-82.
Eric Schmidt and Jonathan Rosenberg, How Google Works (New York: Grand Central Publishing, 2014)
Alfred P. Sloan, Jr., My Years With General Motors, paperback edition (New York: Doubleday, 1990)