How Google Works: Eric Schmidt and Jonathan Rosenberg

Anyone purchasing tech stocks of social media or search firms should read this book to understand the industry. The strength of the book involves the 360 view of a company, from management, employees, and the board. Such a broad perspective is rare in most management books. As a manager, I gain insight into some of the practices of a company that contains a diverse workforce that demands excellence from those workers, and provides a culture that nourishes achievement. As an employee, I could extract the expectations of a very successful and innovative company and what that company looks for in its employees. Finally, as a member of a board, the book clearly delineates the role of board members and that of management. That the authors both teach at Stanford Business School allow readers to "attend" a course for the price of the book or a library card.

The book divides into eight chapters, Introduction--Lessons learned from the front row, Culture--Believe Your own Slogans, Strategy--Your plan is wrong, Talent--Hiring is the most important thing you do, Decisions--The true meaning of consensus, Communications--Be a damn good router, Innovation--Create the primordial ooze, and Conclusion--Imaging the unimaginable. These titles sound life ones that you would find in any management book, but the secret sauce is the details and the reliance on data and statistics to support the conclusions that the authors draw.

Upper management creates and determines company culture. Fitting the stereotype of a high tech firm, Google promotes a flat, democratic, adaptive, experimental, and open organizational environment. Things the founders and employees care about and value. Operating on a platform of the internet, management faces these realities: "First, the Internet has made information free, copious, and ubiquitous . . . Second, mobile devices and networks have made global reach and continuous connectivity widely available. A third, cloud computing has put practically infinite computing power and storage and a host of sophisticated tools and applications at everyone's disposal, on an inexpensive, pay-as-you-go basis" (p. 11).  Faced with these forces, Google built a firm full of people the authors label as "smart creative", individuals that differ from the now prevalent, one-dimensional "knowledge workers" because "they are multidimensional, usually combining technical depth with business savvy and creative flair" (p. 17). To keep their workforce networked, Google crowds employees together in close working quarters, tolerates messiness, ignores rank and prizes data, turns the Rule of Seven on its head, and organizes groups functionally and not according to business divisions and product lines to avoid silos.

In the management sphere, the authors discuss strategy, talent, decision making, communication, and innovation. Regarding strategy, the authors take an iterative approach to a company plan, "based on a foundational set of principles that are grounded in how things work today and that guide you plan as it shape-shifts its way to success. The plan is fluid, the foundation stable" (p. 69). The plan rests on technical observations and not on marketing research. Who would have thought Google would innovate the car industry? The book contains Eric Schmidt's format for successful strategy meeting that is worth reading. On the topic of talent and hiring, the authors acknowledge that building a great company entails finding excellent people--the responsibility of not only management but the entire organization. The authors present advise on career-building as well as hiring tips. On the topic of decision making, the authors stress management timing as well as the rightness, the data supporting, of a decision.  Management enables communication to flow--not information hoarders, but information routers. Finally, the sum total of the organization and culture creates a medium where innovation happens.

As an employee, the book offers guidance on the expectations in the world of "smart creatives". The sections of the book on "Google's Hiring Dos and Don'ts . . . Career--Choose the F-16, Treat your career like you are surfing, and Always listen for those who get technology, Plan your career, Statistics is the new plastics, Know your elevator pitch, Go abroad, and Combine passion with contribution" are all worth reading.

Finally, as a member of a board that has had its attention diverted from strategy and product to governance and lawsuits, I found Google's caveat interesting--"If this isn't true, get new board members" (p. 195). A lack of focus erodes business momentum and distracts leadership and strategic thinking.

Schmidt, E. & Rosenberg, J. (2014). How Google Works. New York: Grand Central Publishing.