How Google Works


Today, I’m sharing thoughts from the book How Google Works, which I read over Audible.


About the Book in a Nutshell: Technology (including the internet and the smartphone) has dramatically reshaped the way business operates, both internally and externally, and what make Google successful was its relentless focus on hiring “smart creatives” and then giving them a lot of room to move fast, make decisions, and focus improving outcomes for the user.

About the Authors: Eric Schmidt and Jonathan Rosenberg are two long-time executives at Google. Eric was formerly the CEO of a technology company called Novell before serving as CEO of Google from 2001 to 2011 while Jonathan Rosenberg was hired into Google in 2002 (after twice declining an offer to work there) and as SVP of Product, worked on Ads, Gmail, Android, and Chrome before stepping down in 2011 as SVP of Product.

Key Lessons and Takeaways

1) The Smart Creative:

“They are not limited in their access to the company’s information and computing power. They are not averse to taking risks, nor are they punished or held back in any way when those risky initiatives fail… They don’t keep quiet when they disagree with something . They get bored easily and shift jobs a lot. They are multidimensional, usually combining technical depth with business savvy and creative flair. In other words, they are not knowledge workers, at least not in the traditional sense. They are a new kind of animal, a type we call a “smart creative,” and they are the key to achieving success in the Internet Century.”

The concept of the smart creative features heavily in the book and is an expansion on the word “knowledge worker”. It’s essentially, someone who’s really smart, capable, and unafraid to challenge the status quo to actually go get things done, even if outside their official “jurisdiction” if they believe its going to make the company better. A huge part of the book hinges on the idea that business can be most successful if they simply recruit and “unleash” a lot of smart creatives.

2) How the Internet Changed Business

“The result of all this turmoil is that product excellence is now paramount to business success— not control of information, not a stranglehold on distribution, not overwhelming marketing power (although these are still important ).”

It’s easy to forget that at one point, successful businesses could focus on a very limited set of actions: controlling the message to the media, owning all the major challenges, and running a ton of ads, to maintain high market share. But those days are very rapidly coming to an end as the Internet has made it easy for us to select better options.

3) Project Prioritization:

“For years, Google’s primary tool for managing the company’s resources was a spreadsheet with a ranked list of the company’s top 100 projects, which was available for anyone to see and debated in semi-quarterly meetings… Most projects were prioritized on a scale of 1 to 5, but there was also room on the list for projects categorized as “new / far out” and “skunkworks .” “

Love this story and an interesting look at Google’s broad range of interests. It’s also kind of crazy to imagine having everyone at say, Percolate, weighing in on a list of every project at the company and trying to prioritize it. I think it would be extremely difficult because most people wouldn’t have the context to judge whether a project was good or not.

4) Knaves vs Divas

“Knaves are not to be confused with divas. Knavish behavior is a product of low integrity; diva-ish behavior is one of high exceptionalism. Knaves prioritize the individual over the team; divas think they are better than the team, but want success equally for both. Knaves need to be dealt with as quickly as possible. But as long as their contributions match their outlandish egos, divas should be tolerated and even protected.”

It can be hard to swallow the quirky, annoying, and sometimes inexplicable behavior of divas, but like Schmidt and Rosenberg say, there’s a difference. There are a lot of brilliant people out there who are enormously capable and can produce outsized results. Yes, they can be weird and a little annoying, but they’re generally well-intentioned. But that’s different from jerks who are out mainly to bolster themselves.

5) Open Floor Plan

“Offices should be designed to maximize energy and interactions, not for isolation and status. Smart creatives thrive on interacting with each other. The mixture you get when you cram them together is combustible, so a top priority must be to keep them crowded.”

I’m not sure I agree with this 100%, but I appreciate that the book properly represents a long-standing Silicon Valley tradition (of year 2002 and beyond). Less perceived hierarchy, more energy, more fun, less cubes. Of course, not everyone is a fan of the open office plan.

6) Don’t obsess over competitors

“If you focus on your competition, you will never deliver anything truly innovative. While you and your competitors are busy fighting over fractions of a market-share point, someone else who doesn’t care will come in and build a new platform that completely changes the game.”

The book in fact opens with a whole conversation about how they were going to deal with “Finland”, which was the code word for Microsoft internally. So obviously Google still responds to competition. But their point is that you can’t try to match them move for move. The only way to win is to win by a massive margin, by doing totally new things and doing them really well.

7) Favor Generalists over specialists

“Favoring specialization over intelligence is exactly wrong, especially in high tech. The world is changing so fast across every industry and endeavor that it’s a given the role for which you’re hiring is going to change. Yesterday’s widget will be obsolete tomorrow, and hiring a specialist in such a dynamic environment can backfire. … A smart generalist doesn’t have bias, so is free to survey the wide range of solutions and gravitate to the best one.”

This is a bit self-serving but as a generalist, I really like their point. There’s too much to know and business is moving so fast that you really just need someone who can learn quickly and figure out what needs to get done.

8) Turning Down a Billion Dollar Founder

“Once, Salar Kamangar was impressed with one of our young marketing associates and wanted to transfer said young man into the APM program. Unfortunately, the APM program only accepted candidates with degrees in computer science, which this associate didn’t have. Although Salar argued that the young associate was a self-taught programmer and had a “history of working closely with engineers and shipping things,” several influential execs, including Jonathan, steadfastly refused to expand the aperture, and denied the transfer. The young marketing associate, Kevin Systrom, eventually left Google. He cofounded a company called Instagram, which he later sold to Facebook for a billion dollars. You’re welcome, Kevin!”

Gotta give them props for calling themselves out when they screw up.

9) Statistics are the new Plastics

“Hal Varian notes that it is always a good idea for individuals to build expertise in areas that complement things that are getting cheap, and data, along with computing power to crunch it, is definitely getting cheap.”

My father didn’t get more than a middle school education in math before entering in a long career at the Massachusetts department of education. He’s had to learn a ton of statistics and how to use Stata to run analyses. I learned more about statistics while producing the 2014 Marketing Executive Insights Study. With all this data, knowing how to parse it and act on it is going to be a huge differentiator. Everyone knows how to go with their gut. Only the best will know how to go with their gut + data.