Google and Its new Management Method: Reorganization
April 8, 2011
The Los Angeles Times’s article “Exclusive: Google CEO Larry Page Completes Major Reorganization of Internet Search Giant” documents a milestone in big company management tactics. The headline sums up the deliverable from a busy first week or so on the job for Larry Page, the founder with operational control of Google. Here’s the passage that may be recycled in a number of Business 101 essays in the months and years ahead:
The executives will be able to act more autonomously and won’t have to turn to Google’s powerful operating committee on every decision. “The idea is to empower people, let them take risks and give them more authority over decisions,” said one person familiar with the situation who spoke on the condition of anonymity to maintain his relationship with Google. Page has been thinking about how to reorganize the company to cut bureaucracy and politicking while speeding up innovation. He may have found his answer in the success of the company’s Android mobile software unit and its video-sharing site YouTube, each of which have thrived as largely autonomous entities.
Questions which crossed my mind include:
- How does one define “success” for YouTube and Android. These two “products” have been fountains of legal and technical activity. Examples range from the shoot out with Viacom which is still flopping around the US legal maze and the possible “we’re open source but we are really into not be so much open that fragmentation occurs” approach to Android.
- What happens to customers of certain Google products and services who cannot find anyone to answer certain questions. Example: “Why has my traffic disappeared?” or “Where did the Adsense revenues go in the last three months?” My favorite is: “Whom do I call about a technical problem with my $300,000 Google Search Appliance?”
- Autonomous decision making is a great thing; however, giant publicly traded companies have many different pressures on them. Example: “What will be done to either re-enter the China market, arguably the fastest growing economy in the world when one compares it to Detroit or Gary, Indiana?” Another example: “When will revenues of a significant nature flow from a social information service?” (I keep thinking of Orkut, its early entrance in a market, and its somewhat interesting impact in Brazil, upon attorneys, and on certain government entities. “Impact” is not direct revenue flowing to Google as I understand the Orkut service.)
Microsoft was once described to me as “10,000 sail boats moving roughly in the same direction.” Is Google emulating Microsoft’s management methods? I see some similarities. A big difference is speed. Moving org boxes in less than five days is quite impressive. Now we can watch performance indicators to see how the method works. MBA candidates, on your mark, get set….
Stephen E Arnold, April 8, 2011
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