 "Eric Schmidt, Larry Page, Sergey Brin")
HOW GOOGLE WORKS
AUTHOR: Eric Schmidt & Jonathan Rosenberg
PUBLISHER: Hachette India
PRICE: Rs 650
ISBN: 9781444792461
When Eric joined Google, he was well aware of the not-so-good history of CEOs being hired by founders into their companies. Typically, the founder hires the CEO, eventually they disagree on something fundamental, the board backs one of them, and the other leaves. Steve Jobs's hiring of John Sculley, a Pepsi executive, to succeed him as CEO at Apple in 1983 is the classic example. The two clashed and Sculley (backed by the board) fired Steve in 1985.
To avoid a similar fate when he joined Google, Eric decided he would let Larry and Sergey do what they did best and he would focus more on the stuff needed to build the company at such an incredible pace, so it could continue to operate effectively and efficiently. The scenario of having a ruling triumvirate was so unique that Larry and Sergey described it in some detail in the letter that accompanied Google's IPO in 2004. In fact, codifying the who-does-what working process of the trio was very helpful. The letter stated that Eric "focuses on management of our vice-presidents and the sales organization. Sergey focuses on engineering and business deals. [Larry focuses] on engineering and product management," and that the three leaders were meeting daily (which continued throughout most of Eric's stint as CEO). Most important, it said that the arrangement "works because we have tremendous trust and respect for each other and we generally think alike."
This all worked very well as long as the three agreed on key issues, which was most of the time. But it did occasionally lead to some difficult situations; when you have three strong-willed leaders, they will sometimes disagree. When that occurred, Eric's process to get to a good resolution was similar to his general decision-making process: Identify the issue, have the argument (alone, just the three of them), and set a deadline. And he often added a corollary: Let the founders decide.
The tendency of a CEO, and particularly (speaking from experience) of a new CEO trying to make an impact in a founder-led company, is to try to make too big an impact. It is hard to check that CEO ego at the door and let others make decisions, but that is precisely what needs to be done. In general, when you are CEO you should actually make very few decisions. Product launches, acquisitions, public policy issues - these are all decisions that CEOs should make or heavily influence. But there are many other issues where it is okay to let other leaders in the company decide, and intervene only when you know they are making a very bad call. So a key skill to develop as the CEO or senior leader in a company is to know which decisions to make and which to let run their course without you.
This skill is even more important when you find yourself in the situation Eric did, running a company in the presence of two very active, respected, smart founders. For example, there was one product review meeting where Eric, Sergey, and Larry ended up disagreeing about a key feature of a new product. There were about twenty people in the meeting, and after a few minutes Eric suspended the argument and then resumed it later that afternoon with just the three of them. It was there he discovered that the two founders not only disagreed with him, but with each other as well. So Eric said fine, he would let the two of them decide, but they had to decide by the next day. When he dropped by the office they shared in building 43 the next day at noon, he asked them, "Which one of you won?" And the response was typical: "Actually, we came up with a new idea." It turned out to be the best solution, and the decision was made.
Meet every day
One of the frustrating aspects of being a leader of smart creatives is how little power you actually have. Look at this chapter so far. Even if you are the CEO of a company, it says, you can't just pound your fist on a table and dictate decisions (well, you can, but if that's your modus operandi you will quickly lose most of your smart creatives), and in fact you shouldn't even make many decisions. Instead, you have to analyze data and orchestrate consensus by encouraging debate and then knowing, through some divine skill, exactly the right time to cut off that debate and make the decision. Sort of makes you yearn for those days a long time ago, when Darth Vader could unilaterally crush someone's throat with the power of the Force and then destroy a planet.
But there is one thing that leaders can still control, and that is the company's calendar. When faced with a critical decision, there is real signaling value in using your convening power as a leader to hold regular meetings. If the decision is important enough, the meetings should be daily. Scheduling meetings with this frequency lets everyone know the importance of the decision at hand. And there is another benefit: When you have daily meetings, you spend less time in each meeting rehashing things that were discussed at the previous meeting, since everyone's memory is still fresh. That leaves more time to consider new data or opinions.
Eric used this approach to good effect in 2002, when Google was negotiating a deal with AOL to be the popular portal's search and ads engine. It was a difficult negotiation, and Eric was particularly concerned about the financial commitment Google was potentially taking on. AOL had a number of advertisers on their platform that were not as yet advertising with Google, so the deal had tremendous strategic value: It would bring those advertisers to our platform. Nevertheless, Eric felt the commitment was too big for a small company like ours to take. Omid Kordestani, our head of sales, led the negotiations with AOL, which had merged with Time Warner in early 2001 and was eager for the revenue this deal would bring it. Omid agreed with Eric that we shouldn't accept AOL's terms. But Larry and Sergey wanteded to take the risk; they had always felt that being aggressively generous with partners on revenue share would ultimately benefit the company ("If it doesn't bankrupt us first," Eric thought when they expressed this point).
MEET 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. He 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
Re-printed with permission. Copyright, Google Inc 2014. All rights reserved
