News>2008.12.31

 

【Column】"Is there Google strategy?"

 

Is there strategy at Google?

According to media articles and press release, mostly main topics about Google are its stock price, engineer centric workplace, 20% of time rule for non-core project. Some of articles pointed out its too much dependence on advertising revenue, about 97% of revenue, but not much on strategy. A piece of quotation about Google strategy is resource allocation rule of 70/20/10 % for respective services; 70% for search, ads and apps, 20% for strong potential, and the rest 10% for wild and crazy services. (Source; Conference at Innovation @ Google, KM world from CNET March, 2008) Google strategy naturally emerges through natural selection of tons of internal projects.

In traditional context, academics named no strategy emergent strategy. The case of Honda's market entry in US is well known example of emergent strategy. Given academic definitions of competitive strategy by Michael E. Porter, strategy always requires core concentration by showing what to do and what not to do. Let me drill down Google's management a bit.

In terms of upper conceptual level, Google has own unique mission which is "to organize the world’s information and make it universally accessible and useful". As a corporate mission this is quite powerful purpose for Google's existence to guide their product development activities, however, it does not give any clear business strategy about in which area and domain he achieves the mission. So far he has achieved this mission through mainly developing web search for individual users with meeting advertisers' needs, and in the future at the same time, he may yet clear strategy to go for where. It might be either or all of mobile, handheld tools, graphical search, any applications services for corporate users, or more.

In terms of organization, Google has cohesive, organizational culture which is team based management, consensus oriented decision making. Its structure is totally flat transparent. In a chaos of ongoing hundreds project, "Top 100 Priorities" list managing all projects gives next working opportunities for engineers to select and join on their interest. It is no top-down direction what to do to respective engineer. Engineers are divided by project into a small team, with average size of 3 or 4 members. As a downside of flat organization, more coordination jobs among teams must be offset by creative culture with voluntary engineers.

The creative culture with voluntary engineers greatly fit into team and consensus based management. Given the fact that product managers typically have more than 50 direct report, traditional top down assignment and evaluation do not work. (Wall Street Journal Management a la Google, April 2006)Peer evaluation must be significant for project and individual evaluation. Addition to its flat structure, Google put simple, basic rules as "Ten Golden Rules" according to the quote by CEO Eric Schmidt about how to manage knowledge workers in the Newsweek 2007. In the rules he defines manager as facilitator.

In terms of human resources management, Google has engineer centric policy, which allows engineers to spend 20% of their time on non-core work for new idea generation, and gets engineers to focus on new services and innovation with perfect work enviroments such as free first class meals and laundry services. In order for Google to implement these organizational belief, system, and human resources management for sure, internal IT systems such as intranet search engine; "MOMA", weekly engineer activity update email; "Product Snippets", and searchable database; "Google Ideas" play supportive role.

In summary, Google's concern is and was not what type of products or services he plans to launch or which customers segment he aims at but how he builds creative workplace for engineers to invent innovative services in a global scale. The traits concern comes from underlying belief that not smart marketer or business planner but motivated, energized engineers with passion create innovation. In the future, Google may reconsider characteristics of emergent strategy into traditional planned strategy according to wall street journals.

Then, questions come like this; will Google’s concern still same be in the future? Growing start-ups someday reaches perk of growth. From Google perspective, can Google consistently grow without discipline or top down management style? That should be next big challenges to Google.