Por: Bernard Girard

wakefulchardDéveloppement de logiciels

17 févr. 2014 (il y a 3 années et 4 mois)

79 vue(s)

El modelo Google



Por: Bernard Girard

Google’s management model

Bernard Girard

Google is a very special
company


Because of its economic and financial performances


Because of its market share


Because of its very fast growth


no employees in 1998


5000 in 2005


20 000 today


Because of its prospects and chances to keep on
growing


Markets left to penetrate


Search on mobile phones…


Because of its resilience


But also because of its very original methods

A lot of growth to come

A company as a model


The management theory uses innovative companies as models,
examples to copy, imitate


Ford, 1910 : the mass production


General Motors, 1930 : The M organization


Toyota, 1970 : quality and mass production


Citibank, 1970, the «

one bank holding company

»


The theory is just the conceptualisation of methods and solutions
discovered by innovative managers


Google is the last of these models


Not because of its successes that come from


The context


The situation


But because of the methods it uses in the management of its
people, its products, its markets

The context, the situation


The situation : the Silicon Valley


Its universities


Its financial tools


Its financial competences (they know how to select the
best projects)


Its legal rules


It’s very difficult to impose non
-
compete clauses


Engineers and ideas flow freely from one company to
the other


The context

of the late nineties


The internet bubble


Engineers are cheap


The rapid growth of internet

What makes Google so
different?


Its technologies


The algorithm


The «

factory

»


Its economic model


Advertising


Selling


Its governance


Its management methods


In HR


In product development


In marketing


In managing innovation

An algorithm for the search


Search on computers used two methods


Indexation : people read the documents, abstract and index them


Efficient but expensive : a lot of handwork, delays…


Automatic search : the computer selects the documents with the
words selected by the searcher


Fast, inexpensive but inefficient when too many documents


If the machine brings back 1 million documents, what do I
do?


Page & Brin find a way to rank pages that makes automatic search
efficient


Imitated from the scientific method of ranking papers


The most cited ones should be the best


The documents with most links should be the more
relevant


If you want your site to be on the first page, one solution :
make it the best, so that others create links to it

And it works

Innovations in the «

factory

»


A powerful «

factory

» : 1 million computers in 60 «

farms

»


When they started, Brin & Page were not rich


They had to build their computer farm with PCs and
cheap used computers


They chooed Open Source softwares that are free and
give a better control on home
-
made applications


Everyone knows PCs don’t last very long, are not very
reliable


They has to build an ad hoc system


Very redundant


That duplicates data several times


With a software that copies automatically the data
from one PC to the other


They have built a reliable system that grows incrementally



An economic model


When Page & Brin started Google, the search engines where financed
by advertising


Free search for everyone, money comes from advertisers


But too much advertising is a «

pain in the neck

», that slows
search and harms the reputation of the engines


They tried to find other ways of financing before finding their own way
with


Advertisements that are useful and almost invisible


The way these ads are priced


A price per click


A price defined by a double envelope auction


An automatic customer relationship


No need to sell the ads


No need to negociate the prices


The long tail : a lot of small advertisers that make a lot of
revenues for the company



Useful and invisible ads

Price : a price per click

The advertiser pays only when users click on their
ad


He pays only useful impressions of his ads
whereas in the press (and on the other search
engines) he pays all impressions


Which could help Google grow in a recession :
advertisers just want ads that bring sales


If ads don’t bring sales, it’s not Google’s fault, it’s
because the advertiser does not transform clicks
into sales


In a way, Googe brings customers in the shop


An automatic sales system


When they started Brin & Page had not ressources to
hire a salesforce, they invented a system where sales
are made without salesmen


The buyer does everything


Chooses the keywords of his ads


Writes the text of the ad


Decides the price per click on a keyword


Chooses his daily budget


Google gives advertisers tools to improve their ads


Statistic tools (Analytics) to convert ads in clicks


The best ads bring the more sale to the advertiser
and the more revenues to Google


This automatic sales system
brings Google new
customers : small shops… that didn’t do advertising


The long tail

Price : the double envelope
system


But how Google chooses the ads it prints ont its pages?


What happens when several advertisers want the same
keyword?


Their solution : an auction system


The sealed
-
bid second price auction


All bidders give their best price in sealed envelopes


The winner is the highest bidder


He pays the second highest price (and not his own price)


The bidder is encouraged to give his best price vs the english ou
dutch auctions)


The price is fair (it’s the market’s price)



The buyer can trust the transaction


Pricing is automatic thanks to the auction system


Everything can be automatized


No need for negociations, transactions costs are reduced to
almost nothing

Innovations in management


Google innovated in


Governance


Human Resources


The hiring process


The 20% rule


Reputation as a motivation driver


A very special working environment


Customer relationship


Product management


Innovation

Page, Brin, Schmidt

Governance


Usually, there is one head, the boss who knows better and decides for everyone
(or tries to)


At Google, they have a tripod : Schmidt, Page, Brin… three leaders who work
together


Which opens up the cognitive capacities of the leaders


Instead of one brain, three brains…


Which improves the quality of the information they use to take decisions


Which gives them the opportunity to look at the business from different
points of view and not only from the financial one


Which gives them more freedom


Vis
-
à
-
vis the shareholders


Vis
-
à
-
vis the high management


This governance mode helps create a company with less layers of management
and bureaucracy


It’s not totally new (many start
-
ups have the same structure) but they choosed to
keep it active


Human Resources


The hiring process


Reputation as a motivation driver


The 20% rule


A very special working environment


Hiring the best


All companies say they want to to hire the best


Most don’t really do that, Google really tries


It affects a lot of resources to the recruitment process


It’s hiring methods are non conventional


They don’t wait for the best people to come to them, they
look for them


They reverse the usual way of hiring


Diplomas are not a proof of your technical abilities
but a proof or your personal abilities


You prefer future to present (you invested in
education and stayed long years in school)


You are able to solve difficult problems


Tests and meetings are used to discover your
technical capabilities

Reputation as a motivational
driver


How to motivate workers is a question all managers have to deal with


Two classical answers


The external drivers : salary (commercial companies), prestige
(army…)


The internal drivers : pleasure to do, to achieve an objective…


In the US, the usual answer is money, index salaries to performance


Google taught there is another driver : reputation


What motivates people is the desire to acquire and keep a good
reputation among co
-
workers


It’s a bit like in the academic world : scientists don’t run for the
money but for the reputation their work can bring them


This motivation friver is embedded in Google in two ways


The selection of the brightest


Working with the brightest gives the impetus to work a lot : one
wants to be considered bright and capable by those one
considers so well


The peer reviews : rather than being judged by hierarchy, projects
are judged by colleagues

The 20% rule


Each engineer can spend 20% of his working time on personal projects


An unconventional but efficient way of managing people


When one has an idea, he has time to work on it, even if it’s not in
the company’s priorities


In traditional companies, these ideas are abandoned or
their inventors go elsewhere to develop them


To find these 20% time you mus rush on your official job : it’s good
for productivity


Procrastination is no longer a loss of time which is also good for
productivity


Several Google products come from this 20% rule


Googlenews, cloud computing…

Free food…

A very special working
environment


The popular press emphasized the massages, the free
food, the swimming pool…


It’s important


To build the good image of Google : it’s a place
where it’s nice to work


But, it is also a place where you can find the best
conditions to work


The techshops : any problem with your network? Your
computer? Specialists solve them quickly


Engineers don’t have, like in other companies, to
work on these trivia!


They can concentrate on satisfying users

A new personage, the user


In all companies, the


«

customer is the king

»… but is he
really?


On the web, the user is the main personage of the play


He is the one who creates the contents search engine
supply


Without users and their contents, no… interesting results


And Google understood that better than others


«

Take care of the users all else will follow

» (L. Page)


«

First make sure our users are satisfied, we’ll always
find ways to monetize our invention

» (LP)


The user helps the company in a kind of renewed potlatch

A modern gift economy


The user benefits from Google’s free products, but, in
exchange…


He brings contents on his websites, on his blogs…


He gives Google informations


On his behaviors, his preferences that statistical
analysis can analyze


Metrology is a marketing tool


He tests the products delivered in early phases of
development (beta phase)


He promotes them through blogs and forums…


He develops them when he participates in a mashup…

An application born in a mashup

From product management to innovation

Product management : how to
solve the complexity problem


High
-
tech companies
meet the complexity
problem


At Microsoft : several
years between two
major releases of a
product


Which slows innovation


Google solved that
problem with the swiss
knife approach

The Swiss Knife


With the swiss knife every
innovation, every tool is
independent vs the
«

bloatware

» à la Microsoft


Google can easily add new
products, new tools : it’s not
limited by the obligation to
respect the past applications


Any of these products can
change quickly without any
impact on the other tools


It’s of course possible to mix
these tools to build new ones


In these cases innovation
comes from integration of
different applications

Release early, release often…


This approach allows to launch innovations as they come


Once a product is «

usable

», it is released


Very high rate if innovation : almost not a week without
something new


The method gives a very quick feed
-
back from the users,
it forces to listen to the users


But the products are «

work in progress

», they are not
perfect, they are… perfectible


Users are often disappointed but they keep quiet : these
products if mediocre are… free and they know they will
improve


This solution is possible only because the applications are
free and there are no distribution costs


Products with an original life
cycle


They improve incrementally and stay for long periods in
beta phase


Which gives the users the opportunity to give the
company feedback on their uses


They have a long life. There is no obsolescence strategy as
at Microsoft (Vista vs XP) or Apple


They slowly diverge from the competition :


At first Googledocs was a terrible «

me too

» Office


It is, today, a suite of office automation applications
for the web and collaborative work


With special functions that you can only find on the
web


And appear to be, in the end, competitive


Today Microsoft imitates Googledocs :)

Search in a spreadsheet


Innovator, but not like the others


Microsoft, Apple, Sun, HP… are also innovators, but the
flavor at Google is different


At Microsoft, innovating is the best way to build
monopolies


Which is the classical strategy : patents give their
owners a monopoly on their invention


Apple applies Hollywood’s theory of creating
blockbusters to industrial innovation :


A star (Steve Jobs),


Excellent products (although usually not disruptive)


Formidable advertising campaigns


Google is an explorer that applies the scientific
experimental method to industrial innovation (hence the
word «

trying

» in Schmidt’s sentence)

The experimental method


In the experimental method, researchers propose
hypotheses and design ways and means to validate them


Eric Schmidt : «

We try this, we try that, we see what
works

»


This logic of «

trying and trying

» is embedded in the
company


In its management,


In an organisation that was designed to make plain use
of this method


In the management of its products


Two examples


The peer review and the management of innovations


The swiss knife and innovation

The peer review, innovation,
productivity and quality


Thanks to the peer reviews…


Ideas flow between teams


The colleagues that judge your projects work on
other topics


OCR : the fight against spam and Google Book
search


If you want your colleagues to judge your work you’d better
make it short and readable


Everyone speaks the same programming language


Source code documentation is a must


Projects are short


Small projects = small teams = less layers of management


Innovation by integration

Mobilize all creative ressources


But the experimental is not the only novel way of doing
things at Google, the company is also a master at
mobilizing creative ressources

wherever they are


Its engineers and their ideas (the 20% rule), its users


Universities


The Open Source Community and its developers


Google code and project hosting


The archives of IT


The Tesseract story and how it became OCRopus


Competitors : rather than reinventing their applications,
Google buys young companies


Users as creators of contents and as developers


Google gives them tools (API, Sketchup…)


Which help fight the «

Not Ivented Here Syndrom

» : Google
does not reinvent the wheel every morning as others do

Thanks to this method…


Google regularly discovers new domains that could become
very lucrative new businesses


Maps


Collaborative office automation


Cloud computing


But also new frontiers that could limit its markets and slow
its growth


Technical : translation



Good translations could open the web, but where are
the engines that produce them?


Legal : Copyright laws


Everyone would like freely available rich contents,
but copyright laws are an obstacle in video, music
and books


Economic : innovations must be monetized


And it’s not always easy to find a way to do it (Youtube)


«

No preview available…

»

How users helped overcome the
copyright obstacle


Because of copyright laws, big search engines
cannot offer movies or music


The solution : give the users the means to
create and publish their own content


Create our own contents? we can all do
that with our cameras


Publish? We can do that with Youtube and
we do it!

368 000 movies on Obama!

Innovation as a strategic tool


I am often asked : what is Google’s strategy?


The answer : innovation


Fast innovation stifles, asphyxiates the competition and
make sure all roads lead to… Google


Search, gmail, picasa, blogger, chrome, google books,
docs, notes… Google gives almost all the tools you
need on the web


Thanks to the beta model and the continuous
improvement of products, the competitors are uncertain
as what will be their next move,


They run after Google


This same model make allies of users and customers


They help develop new products, they are the best
«

salesmen

», they give the best informations on what
the products should look like…


And they are, most importantly, loyal!

Questions on this model


Is it sustainable?


Is it for everyone?

Is it sustainable?


Is what is good for a small and young company
appropriate for a mature and bigger company?


How long can Google deliver solutions it cannot
monetize?


Can this model be applied to products that are sold
rather than given?


Is the ad market big enough to finance all th web?


Is reputation so good a motivaton driver when stock
-
options dive




A model for every one?


This powerful model helped Google become what it is today


Following all Google’s rules is not a recipe to become a new Google


But most of these new ways of managing will in the years to come
enter the catalogue of business’s best practices


Somes companies already started emulating them


In the hight tech sector


Most start
-
up imitate Google’s ways


But also in the old industry


Chrysler and the tripod as a mode of governance


Even in very different businesses


The Restaurant and the 20% rule


The consulting company in Bucaramanga, Colombia


A model for you?

You tell me…