I don’t pretend to understand anything about how business works, but I’m quite skeptical of the idea of CEO as all-knowing Galtian superman and I tend to think that actually having detailed knowledge about your product, as opposed to just being a manager, is probably very important, especially in technology. So I liked this story (via John Gruber) about how two of Google’s most important strategic moves were done by its founders without then CEO Eric Schmidt’s knowledge:
One day Larry and Sergey bought Android, and I didn’t even notice. Think about the strategic opportunities that has created. Sergey found Google Earth one day while he was surfing on the Web. And then he walked into my office and told me he bought them. “And I said, “for how much,” Sergey?” And it turned out to be a few million.
This not meant as a knock on Schmidt, to the contrary, he was smart enough to know he should let those guys do what they want in certain matters.
Walker
Proper delegation: the most important management skill.
inkadu
Absolutely, Walker. I know one community center that is an absolute mess b/c the director has to run everything herself. During a meeting she’ll answer her cell phone to book a wedding in the center. Insanity.
But if I made CEO money, I’d be delegating like crazy so I could spend more time at my villa in the south of France clearing brush and what not.
Jeff
Which is fine as long as it works, or you have enough money to buy anything that seems interesting, then play with it to see that it works. If they go on a losing streak, then the true test of management skill will be to leave them alone, rather than take back their chips.
patrick II
Kind of the opposite attitude of John Sculley the businessman who forced Steve Jobs out at Apple. That bad move was eventually and successfully remedied when Jobs came back years later but only after Apple had nearly tanked.
DougJ DougJson
@patrick II:
Yes, exactly.
morzer
DougJ, these desperate attempts to land a business editor gig at the Atlantic must cease. Have you no sense of decency, sir, at long last? Have you left no sense of decency?
eemom
I have one word for you, just one word.
Plastics.
Omnes Omnibus
The best boss I ever had was one of my battery commanders in the Army. I he gave his subordinates a clear idea of what he wanted them to accomplish, a few guidelines as how it might best be done, and then he stepped out of the way. He kept a close enough eye on his lieutenants that we weren’t going to make critical errors, but we were free to make all sorts of small ones. Work got done and done well, his subordinates learned and developed as leaders, and he developed a great reputation. What he did was hard work actually, but no harder than being a micromanager would have been. A couple of years ago, he got his star.
PeakVT
Manage up, not down. (That doesn’t apply to Schmidt, of course.)
MikeJ
Only once have I worked for a non-techy type that actually knew how to work with techies. He succeeded because he *knew* he couldn’t tell what we were talking about and never tried to convince anybody he knew about it.
And everybody under him knew that he knew noting about how long it took to restore context after a hardware interrupt, and knew that they had *better* know.
In many companies the people actually creating the products that make the money get shit on. Technical people like the acknowledgement that what they do isn’t just typing and the knowledge they’ve spent years acquiring is important.
Amir_Khalid
@patrick II: It’s a measure of how deluded John Sculley was that he, a veteran of Pepsi-Cola’s sugared-water business, actually appointed himself Apple Chief Technology Officer during his reign. As I recall, the move was greeted with much mockery.
mistermix
Google’s strength is that it is an engineering-driven company, and that comes from the founders but permeates the culture. Schmidt thinks of himself as “adult supervision” but really his role was to do all the boring shit that Larry and Sergey didn’t want to do, not innovate, AFAIK. Since he couldn’t do that to their satisfaction, Larry is taking it over. I don’t know if that’s going to work out, but Schmidt’s hands-off role was by the founder’s design, not his.
inkadu
@MikeJ: Conversely, sometimes the tech folks take gross advantage of the ignorance of their superiors. A programmer friend of mine did in a month what the entire tech department of a company said was impossible.
Brachiator
And the google founders were smart enough to bring Schmidt on board in the first place. The company might have been just another burst tech bubble had they not been savvy enough to find someone who could help create and manage a company that could consistently transform cool shit into viable products and services.
I recently heard a tech podcast that claimed that company employees are very happy with the recent executive reshuffling. This could be very interesting, since google had lost some key employees who left to join Facebook and other companies.
On the other hand, wasn’t Larry the google exec who recently spent a … boatload… of money on a new yacht? I would hate it if taking on CEO duties turned out to be an ego play instead of part of an intelligent strategy.
MikeJ
@inkadu: If your employees are that disengaged from the success of company you have huge problems of an entirely different type. Which goes back to the producers being shit on by management.
Killick
@inkadu:
Sure, it can happen, but it’s rare and likely to happen when you have a manager trying to micromanage tech folks…and who doesn’t know shit about what is going on. Then they’ll do it for fun.
Trust them, most often they’ll be trustworthy.
David Brooks (not that one)
This tells (rather, confirms) another point: Google’s own teeming host of engineering geniuses are anything but.
Here we have this company of, supposedly, brilliant engineers. They give off this glow of wonderfulness. They have a day a week to work on garage projects. They are all young (if you have experience, you must be old, so don’t even apply – and, for them, old means over 40). They have an on-site masseur!
Yet what are arguably two of their three best side products were bought outright, and I believe GMail had a healthy infusion of ex-Hotmail people. Perhaps I’ll make an exception for Books, an audacious but also self-contained project that met its goals. Otherwise, all they can produce is poorly-conceived rubbish that simply refuses to take off.
Their core business is still brilliantly done, even if their search was an evolution, not a revolution, and the idea of instant auctions for inexpensive ads was hardly original. Google’s founding team are brilliant, and deserve admiration for driving hard on a winning set of ideas. Other than that, they’re just a tech company with a lot of poorly-executed ideas. Just like the rest of us, in fact.
Joe Buck
Actually it means what many of us knew all along; Schmidt was never really running Google. Brin and Page founded it, and own more of Google than Schmidt, and they brought Schmidt in to be a more mature and respected public face.
RareSanity
@mistermix:
Exactly.
My first job out of college was with Motorola. Back then, it was an engineering-driven company, were the tech people would openly mock and insult the sales/marketing types. That was over a decade ago, and now, the sales/marketing types run the joint. Anyone here can attest to how badly the reputation of that once great company, has tanked, over the past 15-20 years.
It has always been a joke, among former employees, that Motorola figured out it was cheaper to hire lobbyists than engineers. Now even government agencies don’t want their stuff anymore.
It’s funny how, when the economy was great and money was flowing like water, all the sales/marketing types figured that they could sell anything with a fancy marketing campaign. Turns out, when money starts to get more tight, all the lipstick in the world, doesn’t hide a bad product.
Martin
I’m genuinely worried about Google’s end-game. Their only real revenue stream is advertising. They’ve got 90% of the web ads but are not losing ground to Facebook. They’re gobbling up mobile, but enough guys like Apple have jumped in to deny them dominance there. They’ve got all of these cool projects, but all they do is firm up the existing ad streams. None of them are revenue drivers.
I don’t know what they turn to when advertising levels out.
RareSanity
@David Brooks (not that one):
If I didn’t know better, I would think that you were bitter, because they wouldn’t hire you.
Google only has one product, advertising. Everything they do, revolves around delivering ads. Google has, single-handedly, revolutionized the notion of “cloud computing”. Yes, they purchased Android. However, what Android is today, bears little resemblance, to what they initially purchased. That operating system, has almost been completely rewritten (mostly to free itself of Sun/Oracle’s Java VM), in the three years since purchase.
Did you even know what the product, now known as Google Earth, was known as before? I don’t, and further more, it doesn’t matter. Whatever it was, it wasn’t almost ubiquitous, until Google developed it “for the masses”.
They have revolutionized how datacenter’s process and store information. The technologies they have developed, or improved, completely changed the way server farms and storage networks are managed. And the best part is, outside of their search and adsense/adwords algorithms, they have made most of their technology available via open sourcing the code.
They are tremendous supporters of open source technologies, which means that not only are they a technology company, they are an advocate for other technology companies, large and small.
While Google may have its faults, to casually dismiss their prowess, as a technology company, is almost laughable.
JasonK
Motorola’s “consumer” division is the one that has had issues. They’ve been doing well lately. The “enterprise” products division has been doing well for many, many years. now that they are seperate entities we’ll see. For the consumer guys 2011 will be an important year.
As to engineering-driven companies. Yeah Google does look like one. They only have one real business and that is advertising ( not search…that just drives the ad business ). The rest of their stuff looks like it was made by engineers (lousy design) and good ideas (ie: Buzz and Wave) they cant figure out how to market properly to make them succeed. Why? Because its an engineering driven company.
The truth is you need a good mix of engineering AND marketing. HavIng good products doesnt mean a thing if you can’t sell them.
One only needs to look at Apple to see how having both brilliant engineering and marketing can take you very far.
Roger Moore
@David Brooks (not that one):
I’m not sure if that’s really right. You need to understand that one of Google’s core competencies is building powerful web infrastructure. That’s a huge part of what all those genius engineers are working on. They build huge datacenters and the kind of front end that abstracts away the complexities of running a project on those huge datacenters. That lets them buy internet startups with good ideas and grow them as fast as they can bring in users. Their dominance in search and ads means they can monetize all those users, too. It’s a boring but hugely powerful way of making money on the web.
Joey Maloney
@patrick II: Given Jobs’ notorious control-freak management style, I wonder how he’s doing at grooming the next generation. Is he building an insanely great system that will still work when he’s no longer around?
RareSanity
@JasonK:
Their quality, at least in land mobile radio, has dropped significantly over the past 5-7 years, while the prices have consistently increased. I’m not saying that they won’t continue being a major player, just that people are starting to look for alternatives, they didn’t before. Once that starts to happen, who knows what the end game will be.
Belafon (formerly anonevent)
@David Brooks (not that one):
I ran into a great quote from Einstein the other day: “If we knew what we were doing, it wouldn’t be called research, would it?”
patrick II
@Joey Maloney:
I think that depends very much on whether Job’s skills something that the people who worked with him have learned or even something that can be taught. Business management skills can be passed on, and if Jobs has left Apple in a good enough market position it will do well for awhile. But the kind of creative instinct that has made it possible for him to create three really incredible companies — Apple, Pixar, and Apple all over again are rare and perhaps unteachable.
Comrade Luke
@eemom: It’s all ball bearings these days.
Roger Moore
I think sports teams are another example that proves you do better by hiring executives for their expertise in the field rather than for their generic business success. It sure looks as though it’s easier to teach a jock about business than it is to teach a random businessman about sports.
David Brooks (not that one)
@RareSanity: No, I’m bitter because I work for a competitor. Matter of fact, I got through two layers of application even after letting drop that my youngest son lives in New York; there just wasn’t a tech skills match.
And I never disagreed that their core business is run brilliantly, and they organize their distributed computing farms effectively (although they are in a position to, instead, throw money at the problem and get the same results; think Microsoft). And cloud computing nowadays doesn’t mean distributed problem-solving, well-understood in theory; Google really pioneered the commercial instantiation; several people now do it well. The leader in the cloud business right now is clearly Amazon.
My thesis was that contary to the image they have built, they do seem thin on innovation, an idea widely used to mock MS. Like MS, they are good at bringing someone else’s idea to a mass market, although, unlike Microsoft, the result continues to lack polish.
Mike M
I have worked in a number of large tech companies and a few startups. There is no lack of good ideas and engineering innovations in large companies, but innovation is no guarantee of business success.
In an established company, senior management is understandably focused on the existing core business and keeping current customers happy. New business ventures often get less attention than they might deserve because they typically drain a lot of money from the company before they start contributing to the bottom line, and in the process depress margins and quarterly results. In many ways, it is easier to acquire a startup whose product has passed the initial marketing phases. In theory, early investors finance the inevitable failures and you can just pick up the winners. Of course, identifying winners is no obvious, and acquiring and integrating startups is not simple either.
In practice, most large tech firms pursue both internal development and outside acquisition. It’s a difficult road for an established company, because product innovations often disrupt existing revenue streams, supply chains and customer relationships, as Clayton Christianson lays out in “The Innovator’s Dilemma.”
RareSanity
@David Brooks (not that one):
Ah, understood. Although I have a great deal of respect for Google’s work environment and their employees, I don’t think I would want to work for them. Sure the money and perks would be great. But, I imagine the workplace to be a highly stressful, highly demanding, highly competitive one.
An environment like that would cause me to burn out, quickly.
Agreed.
My interpretation of Google’s “innovation”, isn’t necessarily, that they built a better mousetrap. In my opinion, their innovation is integration, if large, disparate technologies, in a manner that is useful and seamless to companies and consumers alike.
There is a form of innovation, that makes complex technologies, more accessible and easier to use. It is basically the same thing Apple gets credit for, in their products. Although, I concede that Apple, also, has built some better mousetraps. Google exists completely in software, so the innovation isn’t as tangible as an iPod or iPhone.
Andre
Having worked in tech companies for most of the last decade in various technical roles, the one thing I can say is that the fastest way to fuck up your product is to have non-tech managers telling tech staff how to do their jobs. From really basic things (enforcing 9-to-5 work hours in a role where network infrastructure load spikes after 6 pm) to more “vision-y” stuff (like not investing in projects that will bring on board specific tech that will become industry standard in a few years) it’s simply not possible to run a tech company without acknowledging that there are all sorts of detailed requirements and restrictions inherent to the tech you’re selling that won’t just disappear if you write a strongly-worded email to someone. That “I’ll keep asking until I get what I want” attitude might work in, say, merchant banking, but it usually won’t work when you’re dealing with technology-if your engineers say “No, can’t happen”, they’re generally not trying to be difficult, they mean what they say, even if you don’t understand their reasons.
With that in mind though, there’s no reason to label someone permanently as “tech” or “non-tech”. Some of the best managers I’ve worked for have stepped into their roles with no previous background in our industry, and worked their asses off to understand the complexities of the products we sell so they can make informed decisions about how to manage their employees. They still don’t know everything, but they know enough to manage from day-to-day, and most importantly they’re fully aware of the limits of their knowledge so they can effectively delegate specific questions to the people who do know more than them.
uptown
How do they make their money…
advertising.
How do they spend their money…
buying up smaller tech companies and giving away tech products so they can increase their advertising reach.