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Google Execs Have Ideas on How to Run Your Business

The ex-CEO and another longtime Google executive say the “new style of managing” they developed should be widely copied.
September 29, 2014

Google is daring, creative, and by multiple accounts an enviable place to work—but is the way it’s run a model for other companies to follow? After all, quintessentially Googley practices like giving people free time to pursue projects are easier to follow if you enjoy very large profits from a product that has remained unbeatable for a decade.

Eric Schmidt & Jonathan Rosenberg
Jonathan Rosenberg and Eric Schmidt.

Google’s former CEO, Eric Schmidt—now the executive chairman—and longtime Google executive Jonathan Rosenberg argue that Google’s management practices are in fact generalizable to any company that employs what they call “smart creative people.” In a new book, How Google Works, written with Google’s director of communications, Alan Eagle, Schmidt and Rosenberg distill several insights they’ve developed for setting strategies and hiring, motivating, and directing employees. One of their possibly counterintuitive maxims: don’t let people work from home. Schmidt and Rosenberg spoke to MIT Technology Review’s deputy editor, Brian Bergstein.

I liked this book more than I expected to. When I first heard you guys were offering management advice, I thought of how J. Paul Getty supposedly said the formula for business success was “rise early, work hard, strike oil.”

Schmidt: I believe, I guess immodestly, that Google did invent some new ways of managing, and we have tried to document them. It’s up to you to take advantage of this and apply it in your situation. I think both of us believe that the stuff we talk about in the book can be applied to new tech companies but also established companies.

Let’s talk about some of those recommendations. The one that most people might be familiar with is that Google employees can spend 20 percent of their time on anything they want. The book has a nice line: that it’s a “check on imperial managers.” But in companies where the profit margins are slimmer, might it be an unaffordable luxury to let people spend 20 percent of their time that way?

Rosenberg:  I don’t think so. Certainly, if you asked that question of the development people at Blockbuster several years ago or the people at Borders, there are plenty of opportunities for people to try to figure out how to use today’s tools to try to build things that they haven’t built before.

Most companies think that the set of stuff that needs to be done is much more onerous than it really is today, and that’s because they’re not thinking in terms of information, reach, and computing power. They’re thinking in terms of the inputs that go into the old 20th-century manufacturing world. If you look at software today, much software is built on open standards. We have much more powerful APIs. It’s very easy to do things, like the guys at Waze did or the guys at Uber did, to put information together and accomplish something very significant with a very small number of people.

You say people should be “overworked in a good way,” meaning they have an abundance of interesting things to do. “If you are a manager,” you write, “it’s not a key component of your job to ensure that employees consistently have a 40-hour workweek.” What’s wrong with the idea of “work-life balance”?

Schmidt:  Both of us have always been annoyed by the term. A successful life is not completely balanced. The great people push hard, they do interesting and unusual things. They follow their passion, they get excited. The term “balance” seems to me to be an industrial era term. And in that sense, I think we’re going against the political correctness of that term. But the fact of the matter is that when we studied the successful people, they managed to have a good life and they managed to have good work, and they get them integrated.

In the book, we mention the women we work with who have a terrible burden, if you will, of working in a startup: it’s intense, but then they also have the majority of the family duties, typically. Somehow, they’re able to get through it with help and so forth. We observe in the book that, for example, they’ll go quiet for a few hours while they’re busy taking care of the family or whatever it is they’re doing, and then they emerge at 11 o’clock at night, working hard to make sure that their responsibilities are taken care of. These are impressive leaders by any measure.

Rosenberg:  I also think it goes in cycles, particularly for me in product management and with engineers. There are cycles where you see people working much, much more aggressively toward the deadline and then things kind of die down. It’s just a very different dynamic than the traditional expectation of this constant 40‑hour-a-week model except when you’re on vacation.

But with these cycles, where you’re intensely “on” as you come to a deadline and then the intensity diminishes, there’s a balance. Maybe not a work/life balance, but there’s an on/off balance. Is it the work/life differentiation that you guys think is the bad part of the term?

Rosenberg:  I guess I really don’t like the term at all. I would hearken back to the quote that we have in the book from Marissa Mayer, where she said that resentment comes from being told what to do and when to do it. I think you really want to give people the flexibility to manage their own time relative to their own work deadlines and strike their own dynamic in terms of how to be spending their time.

But you guys don’t believe in letting people work from home. So although resentment comes from being told what to do and when to do it, I can still tell you where to do it?

Schmidt: I’m sorry, I just don’t like your phrasing, if I can push back a little bit. Working in a corporation is voluntary, and we expect people to buy in to the vision. And part of that is a teamwork thing. If you want a great company, people need to show up at work, and they need to be quite passionate. The reason they need to show up at work is because of the water cooler effect. A lot of the conversations are informal; the entity moves forward when people are around. It’s very difficult to do that, even with modern communications technology, when people are remote.

Rosenberg: There are models and tasks which lend themselves to being done remotely. Technical documentation, possibly. But if someone’s going to be contributing into the maelstrom of a product development cycle, they need to be serendipitously bumping into their coworkers. We’ve done a lot of things where we’ve tried the sort of remote this and remote that. It just doesn’t work very well.

Yet many companies advertise their willingness to let people work from home as an enlightened management practice.

Rosenberg:  Maybe you’re talking to other companies. The companies that I am familiar with have all ultimately come to our view, and the established companies expect people to show up at work.

Why write this book? If you’ve come up with a better approach to management, why publicize it and give away what could be a competitive advantage for Google?

Schmidt: I’m not trying to criticize, but you’re framing it in the old way as opposed to the new way. One of the reasons Silicon Valley works so well is because the people actually help each other. In 1997, when I transitioned to Novell, I wandered around and asked people for advice, and they all gave it to me. Even competitors. They were very kind. They didn’t have to.

I think the principles that Google is trying to promote here benefit all of us by solving better problems, bringing better people into the industry, improving the quality of management, improving the aspirations, and just making the world a better place. It’s very consistent with Google’s view. We don’t have that many trade secrets except the quality of our people and some of our algorithms.

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