9-116-029
R E V : D E C E M B E R 1 2 , 2 0 1 7
Professor Robert Simons and Case Researcher Annelena Lobb (Case Research & Writing Group) prepared this case. This case was developed from published sources. Funding for the development of this case was provided by Harvard Business School and not by the company. HBS cases are developed solely as the basis for class discussion. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management. Copyright © 2016, 2017 President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-545- 7685, write Harvard Business School Publishing, Boston, MA 02163, or go to www.hbsp.harvard.edu. This publication may not be digitized, photocopied, or otherwise reproduced, posted, or transmitted, without the permission of Harvard Business School.
R O B E R T S I M O N S
A N N E L E N A L O B B
Google to Alphabet: Ten Things We Know to Be True
From Alphabet CEO Larry Page and President Sergey Brin:
We first wrote these “10 Things” [in 2000] when Google was just a few years old. From time to time we revisit this list to see if it still holds true. We hope it does—and you can hold us to that.a
1. Focus on the user and all else will follow. Since the beginning, we’ve focused on providing the best user experience possible. Whether we’re designing a new Internet browser or a new tweak to the look of the homepage, we take great care to ensure that they will ultimately serve you, rather than our own internal goal or bottom line.
2. It’s best to do one thing really, really well. We do search. With one of the world’s largest research groups focused exclusively on solving search problems, we know what we do well, and how we could do it better. Our dedication to improving search helps us apply what we’ve learned to new products, like Gmail and Google Maps. Our hope is to bring the power of search to previously unexplored areas, and to help people access and use even more of the ever- expanding information in their lives.
3. Fast is better than slow. We know your time is valuable, so when you’re seeking an answer on the web you want it right away. By shaving excess bits and bytes from our pages and increasing the efficiency of our serving environment, we’ve broken our own speed records many times over, so that the average response time on a search result is a fraction of a second. We keep speed in mind with each new product.
4. Democracy on the web works. Google search works because it relies on the millions of individuals posting links on websites to help determine which other sites offer content of value. We assess the importance of every web page using more than 200 signals and a variety of techniques, including our patented PageRank™ algorithm. In the same vein, we are active in open source software development, where innovation takes place through the collective effort of many programmers.
a Abridged. Complete text available at http://www.google.com/about/company/philosophy/, accessed June 2015.
For the exclusive use of Y. Hu, 2019.
This document is authorized for use only by Yanni Hu in Global Strategy_Fall 2019 taught by RADOSLAW NOWAK, University of Illinois – Urbana-Champaign from Sep 2019 to Dec 2019.
116-029 Google to Alphabet: Ten Things We Know to Be True
2
5. You don’t need to be at your desk to need an answer. The world is increasingly mobile: people want access to information wherever they are, whenever they need it. We’re pioneering new technologies and offering new solutions for mobile services that help people all over the globe to do any number of tasks on their phone. In addition, we’re hoping to fuel greater innovation for mobile users everywhere with Android, a free, open source mobile platform.
6. You can make money without doing evil. Google is a business. The revenue we generate is derived from offering search technology to companies and from the sale of advertising displayed on our site and on other sites across the web. To ensure that we’re ultimately serving all our users (whether they are advertisers or not), we have a set of guiding principles for our advertising programs and practices:
• We don’t allow ads to be displayed on our results pages unless they are relevant where they are shown.
• We don’t accept pop–up advertising, which interferes with your ability to see the content you’ve requested.
• Advertising on Google is always clearly identified as a “Sponsored Link,” so it does not compromise the integrity of our search results. We never manipulate rankings to put our partners higher in our search results and no one can buy better PageRank. Our users trust our objectivity and no short-term gain could ever justify breaching that trust.
7. There’s always more information out there. Once we’d indexed more pages on the Internet than any other search service, our engineers turned their attention to information that was not as readily accessible. Sometimes it was just a matter of integrating new databases into search, such as adding a phone number and address lookup and a business directory. Other efforts required a bit more creativity, like adding the ability to search news archives, patents, academic journals, billions of images and millions of books.
8. The need for information crosses all borders. Our mission is to facilitate access to information for the entire world, and in every language. To that end, we have offices in more than 60 countries, maintain more than 180 Internet domains, and serve more than half of our results to people living outside the United States. Using our translation tools we have been able to greatly improve both the variety and quality of services we can offer in even the most far–flung corners of the globe.
9. You can be serious without a suit. Our founders built Google around the idea that work should be challenging, and the challenge should be fun. We believe that great, creative things are more likely to happen with the right company culture. There is an emphasis on team achievements and pride in individual accomplishments that contribute to our overall success. We put great stock in our employees—energetic, passionate people from diverse backgrounds. Our atmosphere may be casual, but as new ideas emerge in a café line, at a team meeting or at the gym, they are traded, tested and put into practice with dizzying speed—and they may be the launch pad for a new project destined for worldwide use.
10. Great just isn’t good enough. We see being great at something as a starting point, not an endpoint. We set ourselves goals we know we can’t reach yet, because we know that by stretching to meet them we can get further than we expected. Ultimately, our constant dissatisfaction with the way things are becomes the driving force behind everything we do.
For the exclusive use of Y. Hu, 2019.
This document is authorized for use only by Yanni Hu in Global Strategy_Fall 2019 taught by RADOSLAW NOWAK, University of Illinois – Urbana-Champaign from Sep 2019 to Dec 2019.
Google to Alphabet: Ten Things We Know to Be True 116-029
3
Brief History In 1995, Larry Page and Sergey Brin met at Stanford University and began collaborating on a search
engine based on a new page-ranking algorithm. They registered the domain name Google in 1997, and users quickly migrated to their new service. In 2001, Google Images was launched, allowing users to find images associated with their queries, and the company opened its first international office in Tokyo. In 2004, the company launched Gmail, an email service with a search function, and Google Scholar, which indexed search results from academic publications.1
In 2004, Google issued shares to the public. Questions immediately arose about whether the company—now with an eye to capital markets—would continue to espouse the same core values. Page and Brin wrote a letter to shareholders to address these concerns. The founders noted they would not provide quarterly earnings guidance and that shares would have a dual-class voting structure, giving common shareholders only limited input into the direction of the business.2
Moreover, Page and Brin stated that they would not shy away from big opportunities that hurt results in the short term:
We would fund projects that have a 10% chance of earning a billion dollars over the long term. Do not be surprised if we place smaller bets in areas that seem very speculative or even strange when compared to our current businesses. Although we cannot quantify the specific level of risk we will undertake, as the ratio of risk to reward increases, we will accept projects further outside our current businesses, especially when the initial investment is small relative to the level of investment in our current businesses.3
Page and Brin hinted, even then, at the tension between focus and sprawl. As the decade passed, Google added new business lines including Google Maps and Google Earth (2005), Google Calendar and Google Finance (2006), and acquired YouTube (2006).4 In 2009, Google announced that it would open Google Ventures, using its financial resources to fund promising new technology ventures.5 In 2010, the company announced it had developed technology for driverless cars.6
The vast majority of Google’s financial resources came from the sale of online ads. Google AdWords promoted products and services that responded to a user’s search queries. Google AdSense displayed context-relevant ads on websites outside Google.com. In addition, a small slice of Google’s revenue came from its Pixel line of hardware products, which were used to showcase its latest software and operating systems in the crowded handset and tablet markets.7
Notwithstanding the growing diversity of its businesses, Google was organized by function. Separate groups were responsible for engineering, product marketing, sales, operations, and finance. Each different product was managed by a research-focused unit that was a cost center. The vast majority of revenues flowed through the stand-alone marketing and sales unit. Profit and loss (P&L) accountability rested solely with the company’s CEO.8
Recognizing that Google was evolving into a different type of company, in August 2015 the founders incorporated Alphabet Inc. Alphabet was a holding company that would contain Google as well as newer businesses such as Calico (biotechnology), Nest (home thermostats and security products), Google Fiber (fiber cable for home Internet access), and investment arms Google Ventures and Google Capital (see Figure 1). Google itself (as a subsidiary of Alphabet) would continue to include Search, Ads, Maps, Apps, Chrome, YouTube, and Android. Beginning in the fourth quarter of 2015, Google’s financial results would be reported separately from those of the rest of Alphabet.9
For the exclusive use of Y. Hu, 2019.
This document is authorized for use only by Yanni Hu in Global Strategy_Fall 2019 taught by RADOSLAW NOWAK, University of Illinois – Urbana-Champaign from Sep 2019 to Dec 2019.
116-029 Google to Alphabet: Ten Things We Know to Be True
4
Figure 1 New Alphabet Organization
Source: Casewriter research.
In Google’s early days, founders Page and Brin had publicized their most closely held beliefs in “10
Things We Know to be True” (reproduced in abridged form at the beginning of this case). The second point stated that they thought it “best to do one thing really, really well.” By 2015, that statement felt too restrictive. While search was still Google’s main competency, and most revenue still came from online advertising, the company had expanded into many other areas that had no direct connection to search—from glucose-monitoring contact lenses to smart thermostats.10
Most of these new business lines had not yet turned a profit, but it was possible that one day the company would lean heavily on businesses outside search. In a 2014 interview with the Financial Times, Page indicated to the interviewer that he envisioned greater goals:
Even Google’s famously far-reaching mission statement, to “organize the world’s information and make it universally accessible and useful,” is not big enough for what [Page] now has in mind. The aim: to use the money that is spouting from its search advertising business to stake out positions in boom industries of the future, from biotech to robotics.11
Are Google’s founding principles—10 Things We Know To Be True—still valid in the newly reorganized Alphabet, a diverse company with a market value of $475 billion? If not, how should they be changed?
Allocating Resources to Customers
Serving our end users is at the heart of what we do and remains our number one priority.
The founders had long emphasized the primacy of the end user: it was the first “truth” that underpinned Google’s business model. Accordingly, executives devoted the bulk of the organization’s resources to research and development that would benefit users. Users typically had free access to Google products and the company relied heavily on user feedback. Google’s strategy was to develop the best product first and generate revenue from it later. One observer said: “The company carefully adds features that are really needed by most users and ends up with a clean, easy-to-use product.”12
Alphabet
Calico DeepMind Fiber Nest Verily
Google X Sidewalk Labs
Google Capital
Google GoogleVentures
For the exclusive use of Y. Hu, 2019.
This document is authorized for use only by Yanni Hu in Global Strategy_Fall 2019 taught by RADOSLAW NOWAK, University of Illinois – Urbana-Champaign from Sep 2019 to Dec 2019.
Google to Alphabet: Ten Things We Know to Be True 116-029
5
Others noted that Google’s design principles were “‘ubiquity first, revenues later,’ and ‘usefulness first, usability later.’”13
From the very beginning, Google strived to run search queries, even unclear ones, for end users as quickly and efficiently as possible. “Even if you don’t know exactly what you’re looking for, finding an answer on the web is our problem, not yours,” the list of 10 truths read. Such dedication to users was costly, however, requiring commitment from a huge number of employees. Google Maps, for example, was a massive operation that required vast amounts of human labor to remain ahead of competitors’ mapping products.14
When Google transitioned to public ownership in 2004, founders Page and Brin tried to dispel concerns that pressure from quarterly financial targets would compromise the company’s costly focus on end users. Their letter to shareholders read: “Sergey and I founded Google because we believed we could provide a great service to the world—instantly delivering relevant information on any topic. Serving our end users is at the heart of what we do and remains our number one priority.”15
In April 2011, founder Larry Page reclaimed the title of CEO from Eric Schmidt (Schmidt, who had been CEO since 2001, became executive chairman). Page immediately reorganized the business. Under Schmidt, Google’s product units had reported to a head of product development, who in turn reported to the CEO. Many felt that this extra layer of executive management was creating unnecessary bureaucracy and slowing the adoption of new ideas. Page eliminated the head of product development position entirely and created six engineering-based product groups that reported directly to him.16 (See Figure 2 for an organizational chart.)
Figure 2 Google’s Organization in 2011
Source: Casewriter research.
Online advertising—sold by the marketing and sales function—continued to fuel the business. In 2015, 90% of Google’s $75 billion in revenue came from advertisers (who typically bid for ads using a second-price auction model).17 The untapped market potential was huge. If Google could sell ads on the scale of traditional TV and magazines, the size of the advertising market could reach $300 billion.18
For the exclusive use of Y. Hu, 2019.
This document is authorized for use only by Yanni Hu in Global Strategy_Fall 2019 taught by RADOSLAW NOWAK, University of Illinois – Urbana-Champaign from Sep 2019 to Dec 2019.
116-029 Google to Alphabet: Ten Things We Know to Be True
6
As a result, the company continually innovated and experimented with new ad formats and platforms in attempts to capture a larger share of advertisers’ budgets.
Reorganizing as Alphabet
In 2015, Page wrote a public letter explaining the new Alphabet structure. Pointing to past successes, he wrote, “We did a lot of things that seemed crazy at the time. Many of those things now have over a billion users, like Google Maps, YouTube, Chrome, and Android.”19
The underlying purpose of the Alphabet restructuring was “improving the lives of as many people as we can.”20 While the company remained dedicated to the end user and continued to strive to reach more and more people, the original focus on an end user’s experience within Google had shifted. Over time, the conception of a user had evolved from a person running a search query to anyone using any of Google’s varied products or services.
Overall revenue more than doubled between 2010 and 2015.21 At the same time, the company made efforts to find sources of revenue other than advertising. As it reported under the business risks section in its 10-K reports, if advertising revenues plunged, Google would suffer.22 In 2014, Google debuted a program called Google Contributor, in which end users paid a fee of $1.00 to $3.00 to view content on participating websites—without ads.23 Google Contributor’s beta site called it “an experiment in additional ways to fund the web.”24
As a result of these efforts, the percentage of revenue from advertising was slowly dropping: 96% in 2011, 95% in 2012, 91% in 2013, 89% in 2014, and 90% in 2015.25
Within Alphabet, smaller businesses (with relatively modest revenues) were broken out into separate entities with their own P&Ls. Unit groupings within Google itself, however, remained unchanged as stand-alone functions—either product-based cost centers or the single marketing and sales revenue center. This approach was explained by former CEO Eric Schmidt:
We believe in staying functionally organized—with separate departments such as engineering, products, finance, and sales reporting directly to the CEO—as long as possible, because organizing around business divisions or product lines can lead to the formation of silos, which usually stifle the free flow of information and people. Having separate P&Ls seems like a good way to measure performance, but it can have the unfortunate side effect of skewing behavior: The leaders of a business unit are motivated to prioritize their P&L over the company’s. If you do have a P&L, make sure they are driven by real external customers.26
Who is the primary customer at Google? What product attributes does this customer value? Given this choice of primary customer, is a functional structure—with P&L accountability only at the CEO level—appropriate?
Prioritizing Core Values Our mission is to organize the world’s information and make it universally accessible and useful.
Google prioritized the end user first and employees second; shareholders were a distant third. The company’s list of 10 truths reflected this ranking by stating that the company would put user interests
For the exclusive use of Y. Hu, 2019.
This document is authorized for use only by Yanni Hu in Global Strategy_Fall 2019 taught by RADOSLAW NOWAK, University of Illinois – Urbana-Champaign from Sep 2019 to Dec 2019.
Google to Alphabet: Ten Things We Know to Be True 116-029
7
ahead of the bottom line. The 10 truths also discussed expectations for employees—such as being “serious without wearing a suit,” a nod to Google’s intense yet casual culture. Work was supposed to be challenging, but fun. Engineers—who were given virtually unlimited resources and held in high esteem throughout the organization—were responsible for designing the products that would keep users happy.27 All employees, regardless of position, enjoyed generous benefits and perks.28
Employees were also trusted with information that would be confidential in many companies, including product roadmaps, launch plans, weekly status reports, and employee and team goals.29
Shareholders were not mentioned on the list of 10 truths. A single four-word sentence noted that Google was a business. The company’s dual-class voting structure also underscored Google’s limited attention for shareholders’ demands.
Reorganizing as Alphabet
Google’s mission statement, “to organize the world’s information and make it universally accessible and useful,” no longer seemed to fit Google’s ambitions. Google was poised to take the massive sums it earned from online advertising and invest them in new industries, including artificial intelligence and nuclear power.30
In the 2014 Financial Times interview, Page affirmed that altruism on a grand scale—products and services with benefits for as many people as possible—was Google’s ambition, but that the company had not succeeded in achieving societal goals as much as he would have liked. He also noted that a new mission statement might be appropriate for Google, but its outlines were not yet clear.31
Is the focus on “organizing the world’s information” for end users sufficient to inspire and motivate employees in Alphabet/Google? If not, what should replace these words?
Tracking Performance Goals It’s not a key result unless it has a number.
Google had always been a data-driven company. From its earliest days, executives realized the importance of measuring the visibility and effectiveness of the company’s online ads and, accordingly, they acquired firms with the necessary tracking technology. In 2008, for example, Google bought DoubleClick, which displayed ads, tracked ad views, and helped Google aggregate information about ad types that individual users favored.32
Advertisers paid Google for results: revenue was earned when a user clicked on an ad (pay-per- click advertising).33 To demonstrate the value of its products, Google provided all advertisers with conversion statistics—the number of customers who took desired actions (downloads, product purchases, etc.)—as well as analytic tools that showed advertisers their return on investment (ROI) from ad spending (profit from advertising divided by the amount spent).34
Google was data-driven in many other areas from hiring to technology experimentation. For example, Google applied a highly data-driven approach to human resources—what it called people operations—in an effort to hire the best talent and optimize performance.
For the exclusive use of Y. Hu, 2019.
This document is authorized for use only by Yanni Hu in Global Strategy_Fall 2019 taught by RADOSLAW NOWAK, University of Illinois – Urbana-Champaign from Sep 2019 to Dec 2019.
116-029 Google to Alphabet: Ten Things We Know to Be True
8
The philosophy at Google was simple: hire the very best, give them freedom, and the rest will follow. The group’s analytics team had shown that exceptional engineers and researchers could perform 300 times better than average people.35 Google leaders believed that if they hired the best individuals they could find, those individuals would thrive in a work environment of “transparency, goal setting, frequent performance reviews, and a less-hierarchical work structure.”36
The reverse was also true. There was a deep-rooted fear that letting down their guard on hiring standards would sow the seeds of mediocrity. As Ram Shriram, a venture capital investor and founding board member stated, “Hire only A people, and they’ll hire other A people. If you hire a B person, they’ll hire C or D people.”37
The people operations department required that all hiring and promotion decisions be based on data analytics.38 The head of the department, Laszlo Bock, argued that the best indication of future on- the-job performance was performance on sample work tests, rather than traditional resume screening and candidate interviews. Analysis of performance data was also used as much as possible to screen managers within Google for promotion.39
As a result of this data-intensive hiring, the Google workforce was an elite cadre of ambitious employees with often perfect, or near-perfect, SAT scores.40 One observer wrote, “Their minds hummed like tuning forks in resonance with the company’s values of speed, flexibility, and a deep respect for data.”41
In addition to careful hiring, there was constant pressure from Google executives for results. Everyone, starting with Larry Page on down, was obligated to set quarterly OKR (objectives and key results) goals. These goals were required to be ambitious, measurable, and visible to everyone in the company. Marissa Mayer, an early employee who later become CEO of Yahoo!, declared, “It’s not a key result unless it has a number.”42
In this highly-charged work environment, it was assumed that if someone was consistently achieving their OKRs, their goals were not sufficiently ambitious.43 According to Eric Schmidt, “a score of 70 percent on a well-constructed OKR is often better than 100 percent on a lesser one.”44
The rewards for superior performance were high. Early on, stock options were a significant part of compensation under the theory that low salaries and big stock awards attracted the best talent. But as the company grew, and as options were spread more thinly across tens of thousands of employees, Google began to develop new compensation rules to attract and retain the best of the best. At the heart of the system was a simple rule: pay unfairly.45 Bock described how top performers earned many times more than average performers:
At Google, we have situations where two people doing the same work can have a hundred times difference in their impact, and in their rewards. For example, there have been situations where one person received a stock award of $10,000, and another working in the same area received $1,000,000. This isn’t the norm, but the range of rewards at any level can easily vary by 300% to 500%.46
Eric Schmidt described the rationale for this approach. “The lower-level employee who helps create a breakthrough product or feature should be very handsomely rewarded. Pay outrageously good people outrageously well, regardless of their title or tenure. What counts is their impact.”47
For the exclusive use of Y. Hu, 2019.
This document is authorized for use only by Yanni Hu in Global Strategy_Fall 2019 taught by RADOSLAW NOWAK, University of Illinois – Urbana-Champaign from Sep 2019 to Dec 2019.
Google to Alphabet: Ten Things We Know to Be True 116-029
9
Google also ranked employees on a forced curve to identify high and low performers. In 2014, most units of the company abandoned this practice.48 Marketing and sales continued to use a bell-curve for evaluation and bonuses.
Reorganizing as Alphabet
With the new Alphabet structure, executives began to track revenues from its new businesses (known as “Other Bets”) separately from Google. Page and other Google executives believed that these nascent businesses would likely require investment for long periods before they generated significant (if any) returns. A 2015 10-K noted Google segment revenues of $75 billion, with revenue growth of 14%. The Other Bets businesses had revenues of $400 million (0.5% of total revenue).49
Google (and Alphabet) continued to use data-driven measures and testing approaches in its hiring processes and goal-setting systems. But the company had come under increasing scrutiny for human resources inequities—especially criticism for insufficient gender and racial diversity.50 Change would require hiring and promoting people using criteria other than objective scores such as test results. Bock, the head of people operations, recognized that a shift in policies might be inevitable. “It started with a desire to hire only the smartest people. Later we refined the process because IQ alone doesn’t make someone creative or a team player, but it was a great starting point,”51 he said.
Should Alphabet/Google maintain its focus on metrics and performance-driven criteria as it grows and matures? What are the alternatives? What are the risks if it abandons these practices?
Controlling Strategic Risk Don’t be evil.
Google’s code of conduct began with the motto, “Don’t be evil.”52 This motto applied not only to the treatment of end users, but also to all Google employees. Ethical conduct was expected of everyone at Google.53
The power of “Don’t be evil” was made clear to Eric Schmidt when he had been CEO for six months. He was in a meeting where people were debating an advertising change that could generate significant revenue. “One of the engineering leads pounded the table and said, ‘We can’t do that, it would be evil.’ The room suddenly got quiet . . . like a poker game when one player accuses another of cheating.”54 The change was quickly rejected.55
“Don’t be evil” was intended to assuage fears that users’ rights might be compromised as Google ventured into new products and services. The mandate also helped set limits for advertising. For example, the company set clear limits to differentiate objective content from advertising and required that any paid ads be identified as sponsored links. All ads were held to specific quality standards: certain types of content (e.g., predatory products such as high-interest payday loans) were expressly prohibited, and certain actions by advertisers were forbidden (pop–up and flashing ads).56 If advertisers violated these policies, their ads were quickly dropped and, in the case of serious violations, an advertiser’s account could be suspended.57 Internally, “a constant battle between Google and rogue advertisers” raged as engineers continually wrote and updated code to detect violations.58 In 2015, Google disabled 780 million ads for contravening its standards.59
For the exclusive use of Y. Hu, 2019.
This document is authorized for use only by Yanni Hu in Global Strategy_Fall 2019 taught by RADOSLAW NOWAK, University of Illinois – Urbana-Champaign from Sep 2019 to Dec 2019.
116-029 Google to Alphabet: Ten Things We Know to Be True
10
Sometimes, Google’s fidelity to its proposed ethical boundaries was questioned. For example, when Google entered the Chinese market with a modified search engine that allowed government censors to block offending content, some criticized Google for what they saw as Google bowing to the pressure of the Chinese government at the expense of Chinese end users.60,61 While some observers saw Google’s eventual exit from China as upholding its core values, others thought it was actually a business decision, driven by the fact that Baidu.com, a Chinese company whose search engine censored results, had become unbeatable in the Chinese market.62
Google executives had set few strategic boundaries. Two exceptions came directly from Page. The first was the 10x test: Page argued that Google should not pursue a project unless it was 10 times better than current products or practices. Page believed that achieving a 10% improvement meant that one was doing the same thing as everyone else: by taking the cautious path, one was less likely to fail, but was also guaranteed not to have wild successes.63
The second exception was Page’s toothbrush test: a project was unlikely to merit support unless it was something someone used once or twice a day and held the promise of making life better for millions, if not billions, of people. If a project met those criteria—enhancing life for the end user—it was worthy of further consideration for funding. In line with Google values, the toothbrush test required “usefulness above profitability, and long-term potential over near-term financial gain.”64
Reorganizing as Alphabet
Though the company still claimed to prioritize individual users, the vague directive to avoid evil in all its forms did not always provide sufficient guidance as Google grew and expanded into new markets. For example, what constituted “evil” could differ across geographies. In Europe, where privacy issues predominated and Google held 90% of the search market (compared to 2/3 to 3/4 of the U.S. market), the “right to be forgotten” (i.e., the right of an individual to demand that information deemed irrelevant or embarrassing be removed from search results) was a potent and problematic political issue.65,66
The company’s revolutionary products had the potential to change people’s lives for the better (or, in the wrong hands, for the worse). However, as the company explored more radical possibilities outside its core search business, one observer wrote, “all Google’s talk of ‘don’t be evil’ and ‘making the world a better place’ has come to sound somewhat quaint.”67 Another observer noted:
The don’t-do-evil mandate doesn’t even ask Google’s programmers to evaluate the purpose of a technology—only to perform a basic “checksum,” or error correction, for evil itself. How pathetically binary. This is not enough for a company that appears dedicated to uploading human consciousness to the cloud.68
In October 2015, Alphabet dropped the “don’t be evil” mantra from its corporate code of conduct. In its place, the new code of conduct read: “Employees of Alphabet and its subsidiaries . . . should do the right thing—follow the law, act honorably, and treat each other with respect.”69 Google, as a subsidiary of Alphabet, chose to retain the “don’t be evil” dictum. Other subsidiaries were free to define their own codes of business conduct.70
What are Google’s franchise risks? Are more specific boundaries needed to ensure that Alphabet/Google employees do not step over the line of accepted behavior? If so, how should this be done?
For the exclusive use of Y. Hu, 2019.
This document is authorized for use only by Yanni Hu in Global Strategy_Fall 2019 taught by RADOSLAW NOWAK, University of Illinois – Urbana-Champaign from Sep 2019 to Dec 2019.
Google to Alphabet: Ten Things We Know to Be True 116-029
11
Spurring Innovation If you set a crazy, ambitious goal and miss it, you’ll still achieve something remarkable.
Google’s engineers were constantly encouraged to seek solutions to seemingly impossible problems: to spark the creativity needed to create truly revolutionary products. “The engineering mindset of solving the impossible problem is part of the culture instilled in every group at Google,” wrote one Google staffer on his blog. “Tough engineering problems don’t have obvious answers. You need to invent the solution, not just optimize something that exists.”71
Employees were continually encouraged to set unreachable, shoot-the-moon goals. As Larry Page stated, “If you set a crazy, ambitious goal and miss it, you’ll still achieve something remarkable.”72
The list of 10 truths described “an emphasis on team achievements.” To foster innovation, Google typically focused on keeping teams small and nimble. One of Google’s early employees, Marissa Mayer, noted that she joined when the company had nine engineers, in three teams of three. When the company’s size doubled to 18 engineers, Brin and Page agreed to organize them as six teams of three, doing six different things, rather than three teams of six, doing three things. 73
Google executives believed that teams of three encouraged entrepreneurship and accountability.74 Small teams could fix problems without management interference. They gave employees a sense of ownership and responsibility over work.75 Project teams stayed small as the company grew: “Google did its best work on numerous initiatives in teams of three to five people, with their leader dubbed UTL, for Uber Team Leader,”76 wrote one observer.
Google encouraged its engineers to dedicate 20% of their time to projects of their own choosing. This policy provided freedom for creative employees to innovate and follow their passions for ideas that might ultimately have commercial value. But it also created substantial pressure for each individual to demonstrate that he or she was capable of generating worthwhile ideas on their own.77
Google pushed its employees to work on moonshots—big ideas with a high likelihood of failure, but also the possibility of enormous success—during their 20% time. Executives carefully monitored the outcomes of these 20% projects and their ROI. A few of these employee-inspired projects had indeed turned into big hits—for example, both Gmail and the traffic information included in Google Maps were conceived in 20% time.78 Other outcomes were important, but more obscure, such as the Streetview tricycle used to capture ground level images in the narrow streets of Barcelona where streets were too narrow for cars to pass.79
Google executives believed that breakthrough ideas occurred when people from different groups interacted in unexpected ways.80 Google’s physical environment was carefully designed to foster innovation through collaboration and casual collisions that yielded “moments of serendipity.”81 Offices were configured so that people could easily gather in groups and software engineers were encouraged to design their work stations with features such as standing desks and treadmill desks.82 Gourmet chefs created a wide variety of exotic (and free) dishes for Google employees, but food lines were carefully managed to create opportunities for casual encounters that could lead to the brainstorming.83 Researchers in the people analytics department determined that lunch lines should be four minutes long: short enough that people didn’t feel like they were wasting their time, but long enough to provide the opportunity to meet new people. Their research also demonstrated the advantage of long tables that forced workers from different parts of the organization to sit together.84
For the exclusive use of Y. Hu, 2019.
This document is authorized for use only by Yanni Hu in Global Strategy_Fall 2019 taught by RADOSLAW NOWAK, University of Illinois – Urbana-Champaign from Sep 2019 to Dec 2019.
116-029 Google to Alphabet: Ten Things We Know to Be True
12
Google had other systems in place to foster innovation. For example, many participated in FixIts, or 24-hour periods during which employees dedicated themselves to fixing a specific problem at the company. At “all-hands” TGIF meetings, top executives shared a 30-minute recap of news from the past week and prompted employees to ask any questions they liked.85 In addition, every Google employee received copies of all the materials presented at board of directors meeting. “We share everything, and trust Googlers to keep the information confidential,”86 wrote the head of people operations.
Google celebrated the free-thinking innovation of its engineers. But engineers were often skeptical of formal policies and procedures. To counter this skepticism, in 2009 Google launched Project Oxygen, a training and awareness program to improve management skills among software engineers who typically wanted “to spend their time designing and debugging, not communicating with bosses or supervising other workers’ progress.”87
As Google grew, layers of management increased but remained relatively flat compared to other organizations. In 2013, when Google had more than 37,000 employees, it had 5,000 managers, 1,000 directors, and 100 vice presidents.88
By 2013, assertions emerged that management had effectively eliminated 20% time at Google.89 Others countered, however, that the true way to think about 20% time had always been “120% time.”90
Reorganizing as Alphabet
With Alphabet, the locus of innovation was shifting. Moonshot innovation was moving away from bottom-up, employee-driven innovation within Google to the Other Bets businesses. There were risks to this approach. For example, Page’s 10x test risked ignoring ideas that were initially less radical but still potentially important. “By insisting on starting at the ‘moonshot’ level of ambition, Page risks missing out on the creation of small projects that lead to the real moonshots later on,” one observer wrote.91
Google’s focus on creativity also now extended beyond the work of its own employees. Google Ventures, the company’s $2 billion venture-capital fund, held stakes in approximately 300 start-ups providing both funding and access to Google know-how.92 Google Ventures had invested in companies such as Nest, which automated home systems, and Uber, the car-service app.93
Will the new Alphabet structure allow Google to be as innovative in the future as it has been in the past? Will it foster more or less creativity?
Building Commitment To get ahead at Google, you must get positive reviews from your fellow co-workers.
One of the most valued traits at Google was known as “Googleyness.” Laszlo Bock, head of people operations, elaborated:
We want people who will thrive at Google. This isn’t a neatly defined box, but includes attributes like enjoying fun (who doesn’t?), a certain dose of intellectual humility (it’s hard to learn if you can’t admit that you might be wrong), a strong measure of conscien- tiousness (we want owners, not employees), comfort with ambiguity (we don’t know how
For the exclusive use of Y. Hu, 2019.
This document is authorized for use only by Yanni Hu in Global Strategy_Fall 2019 taught by RADOSLAW NOWAK, University of Illinois – Urbana-Champaign from Sep 2019 to Dec 2019.
Google to Alphabet: Ten Things We Know to Be True 116-029
13
our business will evolve, and navigating Google internally requires dealing with a lot of ambiguity), and evidence that you’ve taken some courageous or interesting paths in your life.94
Google employees were part of an elite group. Between 1 million and 3 million people applied annually for a job at Google. Typically, only 5,000 were hired—less than half of one percent of the people considered.95 The prestige in landing a job at Google was evident in the technique used by Jonathan Rosenberg, senior vice president of products (before the 2011 reorganization), to entice potential recruits who were undecided about joining the company. Rosenberg kept a random sample of resumes of 200 Google employees and would hand over the stack saying, “You get to work with these people.” The resumes included graduates from the world’s best universities, people who had invented important new technologies and products, Olympic athletes, Turing Award and Academy Award winners, Cirque du Soleil performers, Rubik’s cube champions, triathletes, veterans, and people “who had accomplished just about any cool thing you could think of.”96
At Google, engineers ruled. This was nowhere more apparent than the distinction in status between the engineering-focused product groups (Search, Maps, Gmail, Android, Chrome, etc.) and the marketing and sales unit that was responsible for revenue. One employee described the hierarchy at Google: “It’s engineers and everyone else. And if you want to be here, you have to appreciate it.”97
When Rosenberg—a seasoned industry executive—was hired to bring product marketing expertise to Google, he described his initial frustration, “I would come to the staff meeting with my structured agenda, the market research we needed to do, the one- and two-year road maps that we need to develop, and Larry Page would mock them and me.” Rosenberg finally learned that, in Page’s mind, only the engineers mattered: Page didn’t want product managers dictating what engineers should be doing.98
Notwithstanding the engineering focus, collaboration was highly valued throughout Google—and essential in bridging an organization where critical information resided in separate functions. Coordinating across units remained an ongoing challenge.99
Management used three practices to encourage commitment to help others. The first was company stock options granted to all employees (which created many multimillionaires).100 Second was the lavish perks enjoyed by everyone. These included free massages, exercise packages, yoga and Pilate’s classes, car washes and oil changes, celebrity appearances, and guest lectures.101
The third technique used to encourage commitment to others was peer reviews. During each performance review period, employees were required to select a handful of peers to comment on their work. Peers were asked to give clear feedback on an individual’s contribution, including topics they did not feel comfortable discussing directly with the employee.102 One Googler wrote: “Promotion is entirely reliant on peer reviews. To get ahead at Google and to get a positive performance review, you must get positive reviews from your fellow co-workers. Your manager might love you, but if your co-workers don’t like you, you have some work to do. Managers are also required to seek peer review from those they manage.”103
Reorganizing as Alphabet
Google was no longer a start-up, and some disaffected “Xooglers” (ex-Googlers) thought its transformation into a much bigger company inevitably created some negative employee dynamics, including the feeling of being a tiny cog in a huge machine, along with arrogance and an excessive focus on metrics.104
For the exclusive use of Y. Hu, 2019.
This document is authorized for use only by Yanni Hu in Global Strategy_Fall 2019 taught by RADOSLAW NOWAK, University of Illinois – Urbana-Champaign from Sep 2019 to Dec 2019.
116-029 Google to Alphabet: Ten Things We Know to Be True
14
Another part of the culture—perks and benefits—felt stress. As Google grew, the company was coming under pressure to curtail excessive spending. In 2015, Google hired Ruth Porat as its CFO, in part to build fiscal discipline.105 “You want someone in there to come in and push back against the free spenders,”106 said one analyst. Porat, who took charge in May 2015, would play that role.107
Have Google executives done enough to build commitment and encourage collaboration among people across the company? What else could they do (or change)?
Adapting to Change: Alphabet’s Future You aren’t thinking big enough.
Google had an enviable record of innovation fueled by its massive advertising revenues. But future success was not assured.
The habits of users were changing as mobile phones and tablets displaced traditional desktop computers. In 2015, more Google searches were performed on mobile devices than on desktops in 10 countries, including the U.S. and Japan.108 However, making money from ads on small handheld devices was difficult. Google responded to these changes in early 2015 by modifying its search-rank algorithm to give preference to mobile-friendly websites. It announced this change publicly to its partners two months prior, so that sites would have a chance to prepare for the shift.109
Industry competition remained cutthroat. For example, Apple announced in June 2015 that its latest iPhone operating system would introduce ad-blocking software that prevented most ads from loading. One observer wrote:
An Apple realist might argue that its great rival Google makes more than 90% of its revenue from online advertising—a growing share of that on mobile, and a large share of that on iPhone. Indeed, Google alone makes about half of all global mobile advertising revenue. So anything that cuts back on mobile advertising is primarily hurting [Apple’s] rival.110
At the same time, other social media sites—Facebook, LinkedIn, Twitter, and Pinterest—were constantly competing for advertising dollars and the limited attention of users. New start-ups were being launched every day.
Google was also being scrutinized by regulators. In Europe, there was fear of cultural domination as the American technology juggernaut captured global markets. Regulators charged the company with anti-trust violations related to preloading Google Search and the Chrome browser on Android phones (Google earned $11 billion in 2015 from ad sales on its Android devices through apps such as Maps, Search, and Gmail).111 Concerns were also being raised about user privacy as the technology to track users became more sophisticated. In addition, there were copyright concerns by authors as Google collaborated with libraries around the world to digitize, and make freely available, millions of books. The issue of free access to the internet—net neutrality—had also become a political issue as some Internet providers lobbied to introduce differential pricing to pay for the relative bandwidth used by different Internet services.112
Google stayed on the cutting edge of innovation by acquiring 200 firms with expertise in advertising, artificial intelligence, cloud computing, data synchronization, design, digital coupons,
For the exclusive use of Y. Hu, 2019.
This document is authorized for use only by Yanni Hu in Global Strategy_Fall 2019 taught by RADOSLAW NOWAK, University of Illinois – Urbana-Champaign from Sep 2019 to Dec 2019.
Google to Alphabet: Ten Things We Know to Be True 116-029
15
facial recognition, home automation, instant messaging, internet security, maps, mobile, music streaming, neural networks, online payments, photography, polling, robotics, satellite, social analytics, surround sound, video, wind turbines, and more.113
The real engine of Google’s innovation, however, had always been the bottom-up creativity and experimentation of its highly skilled workforce operating in a highly-pressured work environment. Innovation and new ideas bubbled up, often unexpectedly, as a variety of projects were pursued—both formally and informally. The requirement for supporting a project had always been the same: user interest and technical feasibility. The unpredictability of new ideas sometimes created the impression that the company did not have a clear direction or strategy. Some called it organized chaos.114
By 2016, much of the experimental innovation had been moved to smaller companies inside Alphabet. Moonshots had been broken out as separate businesses such as Nest (smart home technology), Google Fiber (internet 100x faster than normal), Calico (biotech to extend human life span), Verily (life sciences), Deep Mind (artificial intelligence), Project Wing (delivery drones), and Sidewalk Labs (modern, affordable housing, energy, transportation, and air quality). In its 10-K filing, management stated: “Our Other Bets are also making important strides in their industries, and our goal is for them to become thriving, successful businesses in the long term.”115
There were also internal management challenges. Many wondered whether a company of 60,000 employees could avoid the complexity and bureaucracy that would ultimately impair its agility. Executives were aware of this risk and introduced the “Bureaucracy Busters” program where employees were asked to identify their biggest frustrations and submit suggestions for how to fix them. In the first round of the program, employees submitted 570 ideas and voted on preferred solutions more than 55,000 times.116
More fundamentally, a political debate was emerging that could affect the future competitiveness of the company. Google’s data-driven hiring and promotion techniques—hire the best and the rest will follow—had propelled it to industry leadership. However, Google was increasingly confronting accusations about lack of social justice in its employment practices. Change would require moving away from using test scores and performance rankings as the main criteria for hiring and promotion. As the head of people operations said: “Google is at the center of very real debates that at the end of the day cannot be answered just by data.”117
Not one to be cowed by these challenges, or to worry about the ability of his management team to meet the increasing complexity of the business, Page continually challenged engineers and product managers with the mantra, “you aren’t thinking big enough,” pushing them to move beyond the art of the possible. . .stretching them to imagine the impossible.118
* * * * *
On February 1, 2016, Alphabet surpassed Apple to become the most valuable company on the planet.119
As the dominant global competitor, can Alphabet/Google remain nimble and adapt into the future?
For the exclusive use of Y. Hu, 2019.
This document is authorized for use only by Yanni Hu in Global Strategy_Fall 2019 taught by RADOSLAW NOWAK, University of Illinois – Urbana-Champaign from Sep 2019 to Dec 2019.
116-029 Google to Alphabet: Ten Things We Know to Be True
16
Endnotes
1 Google, “Company history,” http://www.google.com/about/company/history/, accessed October 2015.
2 “Full Text: Letter From Google’s Founders,” FT.com, April 29, 2004, via Factiva, accessed June 2015.
3 “Full Text: Letter From Google’s Founders,” FT.com.
4 Google, “Company history.”
5 Google, “Company history.”
6 Google, “Company history.”
7 Charlie Osborne, “Lenovo Completes $2.91bn Acquisition of Google’s Motorola Mobility Unit,” ZDNet, October 30, 2014, http://www.zdnet.com/article/lenovo-completes-2-91bn-acquisition-of-googles-motorola-mobility-unit/, accessed October 2015.
8 Boris Groysberg, David A. Thomas, and Alison Berkley Wagonfeld, “Keeping Google ‘Googley,’” HBS No. 409-039 (Boston: Harvard Business Publishing, 2009).
9 Conor Dougherty, “Google to Reorganize as Alphabet to Keep Its Lead as Innovator,” The New York Times, August 10, 2015, http://www.nytimes.com/2015/08/11/technology/google-alphabet-restructuring.html, accessed August 2015.
10 Conor Dougherty, “Google to Reorganize as Alphabet to Keep Its Lead as Innovator,” The New York Times.
11 Richard Waters, “FT Interview with Google Co-Founder and CEO Larry Page,” Financial Times, October 31, 2014, http://www.ft.com/cms/s/2/3173f19e-5fbc-11e4-8c27-00144feabdc0.html, accessed October 2015.
12 Richard L. Brandt, The Google Guys: Inside the Brilliant Mind of Google Founders Larry Page and Sergey Brin, available online at https://books.google.com/books?id=BjluPbqJnm0C&pg=PT106&lpg=PT106&dq=google%27s+release+of+products+in+beta+ form&source=bl&ots=rrcqSdeUc4&sig=SWyA3Gc5k-IW-C1_vfd-qLs90sQ&hl=en&sa=X&ved= 0ahUKEwili6mUiunLAhWBmx4KHVj8BdoQ6AEILTAC#v=onepage&q=google’s%20release%20of%20products%20in%20beta %20form&f=false, accessed March 2016.
13 Bala Iyer and Thomas H. Davenport, “Reverse Engineering Google’s Innovation Machine,” Harvard Business Review, April 2008, https://hbr.org/2008/04/reverse-engineering-googles-innovation-machine, accessed March 2016.
14 Alexis C. Madrigal, “Why Google Maps is Better than Apple Maps,” The Atlantic, December 13, 2012, http://www.theatlantic.com/technology/archive/2012/12/why-google-maps-is-better-than-apple-maps/266218/, accessed February 2016.
15 “Full Text: Letter From Google’s Founders,” FT.com.
16 David Goldman, “Google Revamps its Top Management,” Money, April 8, 2011. http://money.cnn.com/2011/04/08/ technology/google_management_shakeup/index.htm, accessed May 2016.
17 See, for example, financial tables at https://investor.google.com/financial/tables.html, accessed June 2015.
18 Jim Probasco, “Google Partnering with ComScore to Attract Major Advertisers,” Benzinga Newswires, February 12, 2014, via ABI/ProQuest, accessed June 2015.
19 See the letter at https://abc.xyz/, accessed March 2016.
20 See the letter at https://abc.xyz/, accessed March 2016.
21 Google Inc., December 31, 2014 10-K (Mountain View, California: Google, 2014).
22 See 10-K filings for each year (Risk Factors), Alphabet Investor Relations, https://abc.xyz/investor/, accessed May 2016.
23 CMO Innovation Editors, “Google Launches Experimental Contributor Service that Cuts Out Advertisers,” Enterprise Innovation, November 26, 2014, via ABI/ProQuest, accessed June 2015.
24 See Contributor by Google, available at https://www.google.com/contributor/welcome/, accessed June 2015.
25 See 10-K filings for each year, Alphabet Investor Relations, https://abc.xyz/investor/, accessed May 2016.
For the exclusive use of Y. Hu, 2019.
This document is authorized for use only by Yanni Hu in Global Strategy_Fall 2019 taught by RADOSLAW NOWAK, University of Illinois – Urbana-Champaign from Sep 2019 to Dec 2019.
Google to Alphabet: Ten Things We Know to Be True 116-029
17
26 Eric Schmidt and Jonathan Rosenberg, How Google Works (New York, NY: Grand Central Publishing, September 2014), p. 44–45.
27 Steven Levy, In the Plex, (New York: Simon & Schuster, 2011), p. 130.
28 James B. Stewart, “Looking for a Lesson in Google’s Perks,” The New York Times, March 15, 2013, http://www.nytimes.com/2013/03/16/business/at-google-a-place-to-work-and-play.html?_r=0, accessed June 2015.
29 Laszlo Bock, Work Rules! (New York, NY: Twelve/Hachette Book Group, April 2015), p. 41.
30 Richard Waters, “FT Interview With Google Co-Founder and CEO Larry Page,” Financial Times.
31 Richard Waters, “FT Interview With Google Co-Founder and CEO Larry Page,” Financial Times.
32 “DoubleClick (Google): What is it and What Does it Do?” The Guardian, April 23, 2012, http://www.theguardian.com/technology/2012/apr/23/doubleclick-tracking-trackers-cookies-web-monitoring, accessed June 2015.
33 AdWords, How it Works, https://www.google.com/adwords/how-it-works/, accessed February 2016.
34 Return on Investment (ROI), https://support.google.com/adwords/answer/14090?hl=en, accessed February 2016.
35 Chris Derose, “How Google Uses Data to Build a Better Worker,” The Atlantic, October 7, 2013, http://www.theatlantic.com/business/archive/2013/10/how-google-uses-data-to-build-a-better-worker/280347/, accessed June 2015.
36 Christopher Mims, “At Google, The Science of Working Better,” The Wall Street Journal Online, March 29, 2015, available via ABI/ProQuest, accessed February 2016.
37 Bernard Girard, The Google Way, (San Francisco: No Starch Press, April 2009), p. 57.
38 Chris Derose, “How Google Uses Data to Build a Better Worker,” The Atlantic.
39 Adam Bryant, “Google’s Quest to Build a Better Boss,” The New York Times, March 12, 2011, available at http://www.nytimes.com/2011/03/13/business/13hire.html?_r=1&pagewanted=all, accessed June 2015.
40 Steven Levy, In the Plex, p. 5.
41 Steven Levy, In the Plex, p. 5.
42 Steven Levy, In the Plex, p. 163.
43 Rick Klau, “How Google Sets Goals: OKRs,” https://library.gv.com/how-google-sets-goals-okrs-a1f69b0b72c7#.jak660lu1, accessed February 2016.
44 Eric Schmidt and Jonathan Rosenberg, How Google Works, p. 221.
45 Laszlo Bock, Work Rules!, p. 225-259.
46 Laszlo Bock, Work Rules!, p. 241.
47 Eric Schmidt and Jonathan Rosenberg, How Google Works, p. 127.
48 For references to Google’s use of curves and stack ranking systems, see David Coursey, “Stack Ranking’s Alive and Well in Tech,” www.dice.com, November 15, 2013, and Walter Chen, “A Googler’s Critique of Google Performance Reviews,” iDoneThis blog, August 5, 2014, both accessed May 2016.
49 Alphabet Inc. and Google Inc., December 31, 2015 10-K (Mountain View, California: Google, 2015), https://abc.xyz/ investor/pdf/|20151231_alphabet_10K.pdf, accessed March 2016.
50 Tom Huddleston, Jr., “Google Owns Up To Lack of Diversity,” Fortune.com, May 29, 2014, available at http://fortune.com/ 2014/05/29/google-owns-up-to-lack-of-diversity/, accessed August 2015.
51 Laszlo Bock, Work Rules!, p. 70.
52 Code of Conduct, Google Investor Relations, Google.com, http://investor.google.com/corporate/code-of-conduct.html, accessed June 2015.
For the exclusive use of Y. Hu, 2019.
This document is authorized for use only by Yanni Hu in Global Strategy_Fall 2019 taught by RADOSLAW NOWAK, University of Illinois – Urbana-Champaign from Sep 2019 to Dec 2019.
116-029 Google to Alphabet: Ten Things We Know to Be True
18
53 Code of Conduct, Google Investor Relations, Google.com.
54 Eric Schmidt and Jonathan Rosenberg, How Google Works, p. 64.
55 Eric Schmidt and Jonathan Rosenberg, How Google Works, p. 64.
56 AdWords Policies, https://support.google.com/adwordspolicy/answer/6008942?hl=en, accessed February 2016.
57 Abuse of the Ad Network, https://support.google.com/adwordspolicy/answer/6020954?hl=en, accessed February 2016.
58 Barry Schwartz, “Google Shut Down 800,000 Advertisers and 130 Million Ads,” March 15, 2012, Search Engine Roundtable, https://www.seroundtable.com/google-ad-safety-14879.html, accessed February 2016.
59 Lauren Gensler, “Google Takes a Stand Against Payday Loans, Bans Ads,” Forbes, May 11, 2016. http://www.forbes.com/ sites/laurengensler/2016/05/11/google-bans-payday-loan-advertisements/#49b8eb9c78cc, accessed May 2016.
60 Rebecca Fannin, “Why Google is Quitting China,” Forbes, January 15, 2010, http://www.forbes.com/2010/01/15/baidu- china-search-intelligent-technology-google.html, accessed March 2016.
61 BBC, “Google turns off China censorship warning,” BBC News, January 7, 2013, http://www.bbc.com/news/technology- 20932072, accessed October 2015.
62 Rebecca Fannin, “Why Google is Quitting China,” Forbes, January 15, 2010, http://www.forbes.com/2010/01/15/baidu- china-search-intelligent-technology-google.html, accessed March 2016.
63 Steven Levy, “Google’s Larry Page on Why Moon Shots Matter, Wired, January 17, 2013. http://www.wired.com/ 2013/01/ff-qa-larry-page, accessed May 2016.
64 David Gelles, “In Silicon Valley, Mergers Must Meet the Toothbrush Test,” The New York Times, August 17, 2014, http://dealbook.nytimes.com/2014/08/17/in-silicon-valley-mergers-must-meet-the-toothbrush-test/, accessed March 2016.
65 Leila Abboud, “Google Hosts Meetings Across Europe on Privacy Rights,” Reuters, September 8, 2014, http://www.reuters.com/article/us-google-privacy-idUSKBN0H308I20140908, accessed June 2015.
66 Robinson Meyer, “Europeans Use Google Way, Way More than Americans Do,” The Atlantic, April 15, 2015, http://www.theatlantic.com/technology/archive/2015/04/europeans-use-google-way-way-more-than-americans- do/390612/, accessed March 2016.
67 Richard Waters, “FT Interview with Google Co-Founder and CEO Larry Page,” Financial Times.
68 Douglas Rushkoff, “Is Google Redefining ‘don’t be evil’?” CNN Wire, December 19, 2013, via Factiva, accessed June 2015.
69 Tanya Basu, “New Google Parent Company Drops ‘Don’t Be Evil’ Motto,” TIME, October 4, 2015, http://time.com/4060575/alphabet-google-dont-be-evil/, accessed November 2016.
70 Tanya Basu, “New Google Parent Company Drops ‘Don’t Be Evil’ Motto,” TIME, October 4, 2015, http://time.com/4060575/alphabet-google-dont-be-evil/, accessed November 2016.
71 Don Dodge, “How Google Sets Goals and Measures Success,” blog post, Don Dodge on The Next Big Thing: Thoughts on Business and Technology, January 28, 2010, http://dondodge.typepad.com/the_next_big_thing/2010/01/how-google-sets- goals-and-measures-success.html, accessed June 2015.
72 Laszlo Bock, Work Rules!, p. 155.
73 David Eckoff, “Google at 10: Interview with Marissa Mayer: Small Teams and Leapfrogging (Part 4),” blog post, DavidEckoff.com, http://davideckoff.com/2008/09/google-at-10-interview-with-marissa-mayer-small-teams-and-leapfrogging- part-4.htmlm, accessed June 2015.
74 David Eckoff, “Google at 10: Interview with Marissa Mayer: Small Teams and Leapfrogging (Part 4).”
75 Keith Hammonds, “How Google Grows… and Grows… and Grows,” Fast Company, March 31, 2003, http://www.fastcompany.com/46495/how-google-growsand-growsand-grows, accessed February 2016.
76 David A. Vise and Mark Malseed, The Google Story, (New York: Delacorte Press, November 2005), p. 255. /
77 Bernard Girard, The Google Way, p. 66.
For the exclusive use of Y. Hu, 2019.
This document is authorized for use only by Yanni Hu in Global Strategy_Fall 2019 taught by RADOSLAW NOWAK, University of Illinois – Urbana-Champaign from Sep 2019 to Dec 2019.
Google to Alphabet: Ten Things We Know to Be True 116-029
19
78 “Full Text: Letter From Google’s Founders,” FT.com.
79 Eric Schmidt and Jonathan Rosenberg, How Google Works, p. 227.
80 Laszlo Bock, Work Rules!, p. 271.
81 Laszlo Bock, Work Rules!, p. 268-270.
82 James B. Stewart, “Looking for a Lesson in Google’s Perks,” The New York Times, March 15, 2013, http://www.nytimes.com/ 2013/03/16/business/at-google-a-place-to-work-and-play.html?_r=0, accessed June 2015.
83 Peggy Hernandez, “At Google, Employees Nourish Big Ideas Over Lunch,” The Boston Globe, February 4, 2014, https://www.bostonglobe.com/lifestyle/food-dining/2014/02/04/nourishing-big-ideas/qwupggLKcipyH4Rnvb9JDI/ story.html, accessed February 2016.
84 Farhad Manjoo, “The Happiness Machine,” Slate, January 21, 2013. http://www.slate.com/articles/technology/ technology/2013/01/google_people_operations_the_secrets_of_the_world_s_most_scientific_human.html, accessed May 2016.
85 Laura He, “Google’s Secrets of Innovation: Empowering Its Employees,” Forbes, March 29, 2013, http://www.forbes.com/ sites/laurahe/2013/03/29/googles-secrets-of-innovation-empowering-its-employees/#554a0bee7eb3, accessed February 2016.
86 Laszlo Bock, “Passion Not Perks,” https://www.thinkwithgoogle.com/articles/passion-not-perks.html, accessed March 2016.
87 David A. Garvin, “How Google Sold Its Engineers on Management,” Harvard Business Review, December 2013, https://hbr.org/2013/12/how-google-sold-its-engineers-on-management, accessed June 2015.
88 David A. Garvin, “How Google Sold its Engineers on Management.”
89 Christopher Mims, “Google’s 20% Time, Which Brought You Gmail and AdSense, is Now as Good as Dead,” Quartz, http://qz.com/115831/googles-20-time-which-brought-you-gmail-and-adsense-is-now-as-good-as-dead/, accessed June 2015.
90 Jillian D’Onfro, “The truth about Google’s Famous ‘20% Time’ Policy,” Business Insider, April 17, 2015, http://www.businessinsider.com/google-20-percent-time-policy-2015-4, accessed June 2015.
91 Jay Yarow, “There’s a Huge Risk in Larry Page’s Focus on Big, Ambitious Ideas,” Business Insider, November 1, 2014, http://www.businessinsider.com/the-risk-in-larry-pages-moonshots-2014-11, accessed March 2016.
92 John McDuling, “What it’s Like to Run Google’s $2 billion Venture Capital Fund,” Quartz, May 7, 2015, http://qz.com/ 399232/what-its-like-to-run-googles-2-billion-venture-capital-fund/, accessed March 2016.
93 Katrina Brooker, “Google Ventures and the Search for Immortality,” BloombergBusinessWeek, March 9, 2015, http://www.bloomberg.com/news/articles/2015-03-09/google-ventures-bill-maris-investing-in-idea-of-living-to-500, accessed June 2015.
94 Laszlo Bock, Work Rules!, p. 100.
95 Laszlo Bock, Work Rules!, p. 69.
96 Laszlo Bock, Work Rules!, p. 114.
97 Steven Levy, In the Plex, p. 130.
98 Steven Levy, In the Plex, p. 160.
99 “Google’s Organizational Structure and Organizational Culture,” September 20, 2015, http://panmore.com/google- organizational-structure-organizational-culture, accessed March 2016.
100 Katie Hafner, “Google Options Make Masseuse a Multimillionaire,” The New York Times, November 12, 2007. http://www.nytimes.com/2007/11/12/technology/12google.html?_r=2, accessed May 2016.
101 James B. Stewart, “Looking for a Lesson in Google’s Perks,” The New York Times.
102 “How Are Performance Reviews Done at Google? What are they used for?” Query at Quora.com, http://www.quora.com/ How-are-performance-reviews-done-at-Google-What-are-they-used-for, accessed June 2015.
103 Employee Review on Glassdoor, Google, http://www.glassdoor.com/Reviews/Employee-Review-Google- RVW144182.htm, accessed June 2015.
For the exclusive use of Y. Hu, 2019.
This document is authorized for use only by Yanni Hu in Global Strategy_Fall 2019 taught by RADOSLAW NOWAK, University of Illinois – Urbana-Champaign from Sep 2019 to Dec 2019.
116-029 Google to Alphabet: Ten Things We Know to Be True
20
104 James Vincent, “Anonymous Employees Reveal The Worst Thing About Working For Google,” The Independent, November 4, 2013, http://www.independent.co.uk/life-style/gadgets-and-tech/features/anonymous-employees-reveal-the-worst-thing- about-working-for-google-8921216.html, accessed August 2015.
105 Michael J. Moore and Brian Womack, “Google to Pay New CFO Ruth Porat More than $70 Million,” BloombergBusiness, March 26, 2015, http://www.bloomberg.com/news/articles/2015-03-26/google-agrees-to-pay-new-cfo-ruth-porat-70-million- by-2016, accessed February 2016.
106 Alexei Oreskovic and Lauren Tara Lacapra, “Google Poaches Morgan Stanley’s CFO,” Reuters, March 24, 2015, http://www.reuters.com/article/us-morgan-stanley-porat-idUSKBN0MK1G320150324, accessed March 2016.
107 Alexei Oreskovic and Lauren Tara Lacapra, “Google Poaches Morgan Stanley’s CFO,” Reuters.
108 “Building For the Next Moment,” http://adwords.blogspot.com/2015/05/building-for-next-moment.html, accessed June 2015.
109 Andy Betts, “Mobile Optimization and the Google Algorithm Change—7 Steps to Stay Friendly,” Search Engine Watch, April 1, 2015, http://searchenginewatch.com/sew/how-to/2402354/mobile-optimization-and-the-google-algorithm-change- 7-steps-to-stay-friendly#, accessed June 2015.
110 Joshua Benton, “A Blow for Mobile Advertising: The Next Version of Safari Will Let Users Block Ads on iPhones or iPads,”NiemanLab, June 10, 2015, http://www.niemanlab.org/2015/06/a-blow-for-mobile-advertising-the-next-version-of- safari-will-let-users-block-ads-on-iphones-and-ipads/, accessed June 2015.
111 Foo Yun Chee, “EU hits Google with second antitrust charge,” Reuters, April 20, 2016, http://www.reuters.com/article/eu- google-antitrust-idUSL2N17N1EP, accessed April 2016.
112 Mike Snider, Roger Yu, and Emily Brown, “What is Net Neutrality and What Does it Mean for Me?” USA Today, February 27, 2015, http://www.usatoday.com/story/tech/2015/02/24/net-neutrality-what-is-it-guide/23237737/, accessed May 2016.
113 ”The Google Acquisition Tracker,” CB Insights, May 2, 2016, https://www.cbinsights.com/research-google-acquisitions, accessed May 16, 2016.
114 Bernard Girard, The Google Way, (San Francisco: No Starch Press, April 2009), p. 78, 93, 197.
115 Alphabet Inc. and Google Inc., December 31, 2015 10-K.
116 Laszlo Bock, Work Rules!, p. 47.
117 Cecilia Kang, “Google Data-Mines Its Approach to Promoting Women,” The Washington Post, https://www.washingtonpost.com/news/the-switch/wp/2014/04/02/google-data-mines-its-women-problem/, accessed August 2015.
118 Eric Schmidt and Jonathan Rosenberg, How Google Works, p. 217.
119 Paul R. La Monica, “Sorry, Apple. Alphabet Now the Most Valuable Company,” Money, February 2, 2016. http://money.cnn.com/2016/02/02/investing/google-more-valuable-apple-alphabet-earnings/index.html, accessed May 2016.
For the exclusive use of Y. Hu, 2019.
This document is authorized for use only by Yanni Hu in Global Strategy_Fall 2019 taught by RADOSLAW NOWAK, University of Illinois – Urbana-Champaign from Sep 2019 to Dec 2019.
Google to Alphabet: Ten Things We Know to Be True
Brief History
Figure 1New Alphabet Organization
Allocating Resources to Customers
Figure 2Google’s Organization in 2011
Reorganizing as Alphabet
Prioritizing Core Values
Reorganizing as Alphabet
Tracking Performance Goals
Reorganizing as Alphabet
Controlling Strategic Risk
Reorganizing as Alphabet
Spurring Innovation
Reorganizing as Alphabet
Building Commitment
Reorganizing as Alphabet
Adapting to Change: Alphabet’s Future
Endnotes