Book Review: How Google Works

Title: How Google Works
Author: Eric Schmidt & Jonathan Rosenberg
Hardcover: 304 pages

Favorite Quotes

– “Imagine the unimaginable”
– “Giving the customer what he wants is less important than giving him what he doesn’t yet know he wants”

How Google Works Book Summary

This is one of the best business books I have ever read. It isn’t a how-to guide from some guru. This is actually how the $500 billion company that is Google operates today. Go behind the scenes at Google to see just how the largest search engine in the world functions and develops such great products. The book does an excellent job at describing how culture is created at Google, how they hire the best candidates, and if you focus on creating the best products and user experience you will be successful. This book really takes you outside the cultural norms for corporate America with a company who has hired over 40,000 employees.

This review will contain summaries on several sections within the book that I found very interesting or provided a completely unique approach to a problem many businesses have.

Tl;dr – Read this book!

Contents:
How Google Works
Ask the Engineers
These Ads Suck
Don’t listen to the HiPPO’s
Give the users what they don’t know they want
The Google Hiring Process
Disagreements
Associate Product Manager Program
Focus on the user
Defaulting to open

Ask the Engineers

As Eric Schmidt was settling in to Google, fresh from being CEO of Novell, one of the first tasks from Mike Moritz, a partner from Sequoia Capital and Google board member, was to create deliverables to show the board how they would defeat the competitor Finland. Eric would hand this project off to Jonathan Rosenberg, SVP of Products. And no, they weren’t talking about the country Finland but rather a codename for Microsoft and a search engine they were building. This was an extremely important task since much of Google’s revenue came from those using the browser, Internet Explorer, developed by Microsoft. There were talks of how to take Google from the start-up culture that it had to a more refined corporate structure. Moritz was looking for a roadmap or a comprehensive business plan.

Jonathan presented his plan to Larry. The plan included all the common traits you would expect, milestones, approvals, priority and a two-year plan of products and release dates. Larry hated it. Larry said, “Have your teams ever delivered better products than what was in the plan? Then what’s the point of a plan? It’s holding us back. Just go talk to the engineers”. This was a real interesting way of looking at things. When we define our success to a plan, we rarely try to go bigger and better with our project. We simply focus on what is needed to reach out next plan milestone.

Larry knew the engineers are Google were not just developers but they had a passion for creativity. They were given power and freedom and that managing them with a strict corporate structure was not the answer.

So what was the plan? Well, plan is a loosely defined term but the board liked what they heard. Ultimately they presented that Google would focus on it’s users and build excellent products and platforms. Ultimately these products and platforms would include, Google Images, YouTube, shopping, gmail, Google Docs, Google Earth, and many more. The plan didn’t include financial projections, no market research or how they would make the most money. It was about one thing, take care of the users and they take care of you.

These Ads Suck

In early 2002 Larry was playing around with the site and typing in search phrases to see what ads he would get back. The ads were completely unrelated to the search. For example, a search for “Kawasaki H1B” would serve ads for lawyers who could help with H-1B visas not ads relating to a Kawasaki motorcycle. Unhappy with the Adwords ads that he was served, Larry simply printed the screenshots of what he saw and pinned them to the bulletin board in the kitchen with the words, “these ads suck,” in big letters across the top.

Here is why Google has succeeded. Larry doesn’t call emergency meetings, he doesn’t scream and yell at product managers, he simply trusts his teams. One member of the search team saw the note Larry left behind and assembled a team of a few colleagues to take a look at the problem. After some research they agreed with the ‘suckiness’ of the results. This team didn’t do anything except get to work and over one weekend they developed a prototype to solve the problem. The team who solved the problem wasn’t even part of the Adwords team!

What I like most about this section was that a team of developers saw a problem and knew they could fix it so they did. Google empowers this type of thinking. They weren’t worried about bureaucracy or stepping in on the Adwords teams territory.

Don’t listen to the HiPPO’s

Of course hippos can be dangerous in the wild but they are also dangers the corporations. HiPPO stands for the Highest Paid Persons Opinion. Google understood that pay level was irrelevant when it comes to making the correct decision. Google wasn’t interested in “tenurocracies,” or places that gave those with tenure more power, not merit. If the newest person on the team had the best idea with data and facts to back it up, then fine.

The book describes instances of where Larry, who obviously was the highest paid person in the room, made a decision that wasn’t based on a compelling argument so an engineer expressed disagreement with Larry. In many companies, that engineer should fear for his or her job. At Google it was the responsibility of the highest paid person and the lowest paid person to know that pay level didn’t matter at Google and it was your job to speak up. 

Give The Users What They Don’t Know They Want

I think this is a concept that really opened my eyes to what innovation actually is. Listening to what your users want is a great way to iterate on current products. It allows for incremental updates to a product. Now, if you want to create an industry or disrupt an industry you need to give the consumer what they didn’t even know what possible. The consumer is often stuck in a box of innovation, it is the entrepreneurs job to expand their thinking and give them something that was impossible or unthought-of of.

The Google Hiring Process

Google takes on a different approach to hiring than most companies. Everyone, from the top to bottom goes through a strict interview process. This helps identify what kind of person the interviewee actually is. To get genuine answers, Google asks applicants to speak to something they are passionate about. And, they aren’t asking about fake resume passion such as “I’m passionate about my work”…. well I hope so! A persons guard will start to go down when they are speaking to something they are really passionate about.

The hiring process at Google really stuck out at me with its high level of attention. I guess you need a high level of attention when you have over 40,000 employees. These employees aren’t Wal-Mart greeters (no offense to the greeters out there), but rather some of the most intelligent minds in the workforce today. Jonathan, during interview’s, to ‘woo’ over a potential hire, would show candidates resumes of people who are currently on the team. “This is the type of people you’re going to be working with,” he would say to highlight the intelligence that is at Google.

Google realized that using a recruiter, or a hiring manager to interview the best of the best doesn’t make for the best hire. The typical hiring manager will interview the candidate a few times and make their decision. If the employee is hired, they really never come in to contact with the hiring manager. Google realized they needed to be different. Product managers, the people who the candidate would be working with day in and day out would now be the ones doing the hiring. They need to be able to find out if they can work with this person.

Google was growing and hiring employees so fast that one day in London, Jonathan was speaking to Rhodes Scholars at an event that Shonda Brown, head of HR, had setup. He was trying to find candidates to give offers too. Sergey said, “offer them all jobs.” This speaks to the type of people that Google seeks. The book notes that they did offer all of them a job and many of them went on to do great things at Google.

Associate Product Manager Program

Google makes mistakes, like everyone else. Here is one example. Google had a program for employees that were computer science majors called Associate Product Manager (APM) program. This program allowed for employees to move around the company and get involved with different products. This program gives the employee the ability to thrive and excel in all parts of the company. One person, who had a marketing degree, not a computer science degree, was not allowed in this program. This was a huge mistake because this person left Google shortly thereafter. This person, Kevin System, left Google and went on to develop Instagram, which sold to Facebook for $1 billion!

Disagreements

Eric, Larry and Sergey, for the most part, agreed on many things. There was one instance all three had different directions and ideas for a certain decision that needed to be made. Eric decided it was best for him to concede his position since he trusted Larry and Sergey. Eric told them they have 24 hours to make a decision. At the end of 24 hours, Eric asked them, “which one of you won?” Eric, replied saying nobody won, they came up with a completely different idea. The point that I took away from this section was the fact that they embraced disagreements but they understood that decisions had to be made regardless. If you sat on the decision for weeks they realized that was actually worse than potentially making the wrong decision. If you are going to fail, then fail fast. 

Focus On The User

There was a prototype by a product manager at Google that was demonstrated to Google senior executives that would change the speed of search. As it stood at the time, the search didn’t actually start until the user hit ‘search’. This slowed the actual query down. The prototype, called Google Instant, would effectively search as the user was typing. This was a no brainer for Google to implement but the question was posted, how would this impact ad revenue. While good for the user, will this negatively impact the bottom line? Those questions to Google were irrelevant. What mattered was the user and their experience. It was the user who received all the benefits, not Google (even though this product turned out to benefit Google too).

To Google, trust is just as important as the bottom line. They know that if they have the users trust the money will come. 

Defaulting to open

Every quarter product managers would present the state of Google to the board. Eric would present to the rest of Google. Defaulting to open means that anything that was legal and would benefit the world, should be made public. Just think how much time people prepare for an internal document or presentation but imagine how people prepare for something that gets released to the world. 

About the Authors

Eric Schmidt: served as Google’s CEO from 2001 to 2011. During that time he shepherded the company’s growth from a Silicon Valley start-up to a global technology leader that today has over $55 billion in annual revenues and offices in more than 40 countries. Eric is now Google’s executive chairman.

Jonathan Rosenberg: joined Google in 2002 and managed the design and development of the company’s consumer, advertiser, and partner products, including Search, Ads, Gmail, Android, Apps, and Chrome. He is currently an advisor to Google CEO Larry Page.

Please comment below if you have read the book, I’d love to hear your thoughts.