Google Execs Explain How the Company Spurs Innovation

Highlights 

• Google acquired a small startup called Android in 2005, which had several employees in Cambridge. That led to an outpost in Cambridge. The office now has about 1000 employees; roughly half work for ITA Software , a travel data startup that Google acquired. “At the time that Google acquired Android, it was mostly a set of PowerPoint slides,” Kontothannasis said. Dodge added, “It was the most amazing acquisition ever in the history of Google. Part of my job is looking for great companies to acquire. We don’t acquire revenue streams, typically, or products. We acquire talent. [By that standard, Android] was a great buy.”
• How does Google decide when to kill projects? “We have a lot of patience, we want to give people lots of chances,” Kontothannasis says. “As long as you have a large enough group of people inside the company that is passionate about something, we’re willing to cut people a lot of slack. The belief is that, maybe if the users haven’t come, maybe we haven’t quite given them the right thing. Things tend to get cut when internal energy diminishes. People get discouraged because something new and more exciting comes along, or people decide [a project] is a dead end.” Since Google doesn’t have the same financial constraints as many other companies, “We can afford to chase things that other people might not. We cut things rarely.”
• Dodge added that since Google employees can dedicate 20 percent of their time to projects at their own discretion, “If you can convince someone else to drop what they are doing to join you in what you’re doing, and you attract a lot of really smart people, well, there must be something to it. If they start to dwindle away, then that’s a vote that what you’re doing is probably not going to make it.”
• Dodge: “There is no one at Google who has the title of innovation officer. Everyone is supposed to be innovative. Microsoft [where Dodge worked immediately before Google] does performance reviews once a year. When I came to Google, they have quarterly reviews. I thought that was kind of odd. We have OKRs [Objectives & Key Results], which are basically your goals for the next 90 days. I wrote down my goals, gave them to my boss. They weren’t good enough. He said, ‘We want you to think really big.’ I said, ‘Do you want me to put goals that I can’t reach?’ [He did.] It forces you to think differently. You cannot achieve those goals using the normal processes and the normal approach. We’re going to force you to think outside the box. At the end of 90 days, you have this scoring system, from 0-1. A good score is 0.6. If you achieve 60 percent, you’re doing very good. If you achieve 75 percent, you’re a superstar. But if you achieve 80 or 90 percent, you’re sandbagging. You didn’t set your goals high enough. If you do 100 percent, then something is definitely wrong. Achieving 60 percent of the impossible is better than 100 percent of the ordinary. That’s the way we think. It’s different from any other company I’ve been in.” (Here’s a blog post Dodge wrote in 2010 about “How Google sets goals and measures success.”)
• Google is a remarkably flat company, Kontothannasis says. You can send an e-mail to CEO Larry Page, and you may get an answer. Both say that Page continually challenges employees to thing about big, entrepreneurial solutions to problems, whether investing in startups through Google Ventures or streamlining interaction between Google employees in different time zones. (Page suggested that orbiting space mirrors might be able to create a single unified time zone around the world.) Google also has a program called Bureaucracy Busters, which crowdsources the best ideas about eliminating red tape and time sinks at the company.
• Dodge: “Google is the most open company with employees that I have ever seen.” The company has weekly Thursday meetings at which executives share what is happening with all employees. “But externally, we are very, very tight. Not as tight as Apple, but pretty tight in what we say and who can say it and when they can say it.”
• Google does about 40 acquisitions a year, Dodge says. Acquisitions are driven largely by the product groups, which look for startup companies doing a certain thing well that Google isn’t doing internally. Lately, executive Andy Rubin (one of the founders of Android) has been acquiring robotics companies.
• The biggest incentive to be innovative and achieve big things at Google: the company pays employees very well. Dodge adds, “We reward innovation, but we don’t penalize failure.”
• On hiring at Google: hiring committees of peers review every applicant coming into the company. The committee has to agree unanimously that an individual should be hired (not just a hiring manager.) “All of us have biases,” Dodge says. “All of us want to hire people that we like, that are like us, that we can feel comfortable with. Maybe we even want people that we can dominate. Because we hire by committee, no single bias gets through.”

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