If I had more time, the Excel macro jokes would be better.
Suggested sound track for this episode:
Google is not hardcore enough, or, sounds like a great place to work - a Rorschach test
What you can do here is substitute the word “Google” for most any normie company out there and get a not too bad analysis of baseline “culture” in IT. That is to say, this reads like the state of many non-tech companies. It is very helpful in that respect!
From the hyper-growth, effortlessly making billions perspective of a big tech company, the claim is that Google has gotten lazy:
Google has 175,000+ capable and well-compensated employees who get very little done quarter over quarter, year over year. Like mice, they are trapped in a maze of approvals, launch processes, legal reviews, performance reviews, exec reviews, documents, meetings, bug reports, triage, OKRs, H1 plans followed by H2 plans, all-hands summits, and inevitable reorgs. The mice are regularly fed their “cheese” (promotions, bonuses, fancy food, fancier perks) and despite many wanting to experience personal satisfaction and impact from their work, the system trains them to quell these inappropriate desires and learn what it actually means to be “Googley” — just don’t rock the boat.
Instead of focusing on continuing to harvest past success - profiting from all that work, he suggests:
The equation would change if the focus instead were on value creation. If you asked daily: “who did I create value for today”, you’d get to very different behavior. If every half-yearly plan identified “how much value will be generated in the world”, then that would lead to different thinking. I’d work harder if I could create more value and have more impact. But I won’t work harder to prevent people from making mistakes — it is easier and more effective to work slower and slow them down. Just ask a few more clarifications and schedule another round of meetings two weeks from now. There is a reason I didn’t become a regulator or home inspector or government bureaucrat. Those are fine professions, but those aren’t the kind of professions that should dominate in a place like Google if it really “respects the opportunity” to change the world.
This is fine if, like, continuous growth is your strategy. To get tech company valuations and multiples that’s the story you have to tell investors. Investors have to believe that no matter how much revenue and profit you have today, it will be even more in the future. Then, they set your share price based on that future value, not your current value. That’s the naive, simple case at least.
If you look at an insurance company or, even, a grocer - maybe even a car company - things are different. Sure, you want growth, but there’s a different strategy in place, more classic even. You keep the current value of the share price, and look to increase it just enough to not get caught in the tech company valuation trap. And you probably pay dividends, do share-backs, etc. That is, you follow the more classic model of a public company: the company exists to return money to shareholders.
Again, I’m sure this naive. But, I mean, if the current state of Wall Street is realistically complex - ugh.
That is, as Praveen says, these normie companies “respect risk”:
Risk mitigation trumps everything else. This makes sense if everything is going wonderfully and the most important thing is to avoid rocking the boat and keep sailing on the rising tide of ads revenue. In such a world, potential risk lies everywhere you look.
So, first: at some point, a company has to switch over from all that swashbuckling to just relaxing and pulling in profits. I mean, what was the point of all that swashbuckling in the first place if you can’t take a load off at some point and just count the bills?
As individuals, I think that is what we should aspire to: the very decadence that’s worrying at Google. Of course, there’s a handful of people out there who never come back in from the seas and want to keep swashbuckling forever. The oceans are vast! There’s plenty of swashbuckling to be had for those who like that kind of DRAMMA.
The issue is when a mature company still thinks its a swashbuckler. They need to change their story, which will change their principles, “culture,” and how they work. The swashbucklets always suggest that it won’t actually change anything - things are already decadent - it will just map words to reality. Fine, sure.
And from elsewhere, throwing some cold water on the story that Google is innovative:
Every successful Google product except search and gmail is an acquisition: mobile, ad-tech, videos, server management, docs, calendaring, maps, you name it. The company desperately wants to be a “making things” company, but it’s actually a “buying things” company. Sure, it’s good at operationalizing and scaling products
I didn’t fact check that, but…sure? Kubernetes is something they made in-house, but I think the type of sentiment quoted above is usually scoped to B2C instead of also B2B. (And, hey, I’m as upset about the death of Google Reader as anyone, probably even more.)
Also, innovations aren’t always in product. They can be in go-to-market, branding and marketing, bundling and unbundling, geographic expansion, etc.
However, again, if the story of your company is that you’re “hardcore,” smart, and innovative, it’s good to make sure you actually are. Otherwise,
Investors will use the wrong models to determine share price, causing problems when “the real story is exposed” because those valuations were false. (This is an evolving pet-peeve of mine. When a share price decreases, we often think of that as “losing” money. But, in fact, the money was never there in first place because the pricing was wrong. For example, “losing” $100bn in one day when nothing really happened is absurd, and points to problems in the whole philosophy of whatever finance system is in place there. I mean, I guess it means that was a good time to buy Google stock? …but I don’t know how to play that game.)
You company culture (people, process, incentives, policy) will make assumptions about capabilities it has that it does not. And then you’ll get into the “throw a bunch of smart people” on it trap: a thread presents itself, and you assume your culture is so good that you can just throw a bunch a smart people at it.
I have no idea how Google actually is, nor if these two critiques are accurate. What I’m more interested in is that this model for thinking about how a strategy can go wrong can be generalized and applied to many organizations. The important part, though, is to figure out if it applies to that company’s strategy and story.
Related: if you’re into the whole M&A as an innovation strategy thing, here’s something from Cathcart that’s fun and credible based on his experience:
One reason acquisitions fail is when large companies have a specific team or department who handles acquisitions. It makes sense to have the accounting, legal and personnel management skills needed to make a large acquisition happen, all in one team. The problem though, is like other teams, or divisions in large companies, if the incentives for that team are year to year, rather than long term, all they have to do is make the acquisition happen, not make it successful. They move on to the next acquisition, and it’s someone else’s opportunity.
Speaking of…
If you’re sorting out strategy in your company, you’ll like my three booklets on the topic:
Changing Mindsets (O’Reilly) – this book goes over what it means to think in terms of products instead of projects, how to motivate people to change the way they work, and how managers can shift their mindset regarding their daily tasks, goals, and staff.
The Business Bottleneck (O’Reilly) – once IT becomes agile and all DevOps-y, the bottleneck moves outside of IT to The Business. This book goes over some things the business side should do to break that bottleneck and get on to creating software-driven business models.
Monolithic Transformation (O’Reilly) collects together the stories and successful tactics large organizations are using to get better at software.
My Content
Among other things, in this interview I go over why you need the VMware Tanzu stack even if you already have kubernetes in place:
More flaws in contemporary finance philosophy
Speaking of:
