Google’s Ten Golden Rules – Is the Article a Bad Sign?

Google CEO Eric Schmidt writes about managing knowledge workers at Google.

At google, we think business guru Peter Drucker well understood how to manage the new breed of "knowledge workers." After all, Drucker invented the term in 1959. He says knowledge workers believe they are paid to be effective, not to work 9 to 5, and that smart businesses will "strip away everything that gets in their knowledge workers' way." Those that succeed will attract the best performers, securing "the single biggest factor for competitive advantage in the next 25 years."

There's a big problem in the article, which is that it focuses overwhelmingly on engineers. Yet almost everyone at Google is problemably considered a knowledge worker – not just the engineers.

Don't get me wrong… my B.S. is in Electrical Engineering and I'm a big fan of the problem solving skills taught in engineering programs. But let's don't be short-sighted. There is more to business than cool technology, even when cool technology is your core business. Economics, finance, marketing… all that stuff still matters. Technology that's cool but doesn't solve any pressing problems (lots of what Google develops falls into this category) isn't valuable. Remember that despite all of their technological creativity, Google's revenues come almost exclusively from their search+advertising model. But of course, they should know that if they are following my favorite rule on their list:

At Google, almost every decision is based on quantitative analysis. We've built systems to manage information, not only on the Internet at large, but also internally. We have dozens of analysts who plow through the data, analyze performance metrics and plot trends to keep us as up to date as possible. We have a raft of online "dashboards" for every business we work in that provide up-to-the-minute snapshots of where we are.

that's great, but are they looking at any data that doesn't have to do with Google?

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Google is right on track with so much of what they are doing, but I wonder if, for them, "search" has become the hammer that will fix every nail in the information management problem we all have. I worry that they are too focused on technology over economics. And I wonder if they realize that a search upstart with dramatically better results could sap most of their revenue stream in a heartbeat. The switching costs for consumers are pretty low, and that's never a sign of an industry that will have killer margins for the long-term.

  • Brock

    A very bad sign. You can only redesign something from the ground up by going back to first principles and applying a lil’ old fashioned imagination. Google’s got pleny of imagination, but management science is about managing -humans-, and no one understands the first principles of how human brains operate. Best practices in management have evolved the same way any other thing evolves, but that doesn’t mean they come with a user’s manual explaining how they work, only that they do.

    Although the 9-5 mentality can be taken too far (as it is in unionized factories), even knowledge workers need structure around which to organize their lives. Googlers will grow up and need to manage family & community obligations, which I think Sergey and Larry may be too young to really understand.

  • Well now we know what they say they do… but as I wrote two weeks ago, “Drucker is the most quoted and the LEAST HEEDED management expert of our lifetime.”

    There’s no arguing with the list. But think of all the great mission statements, ad campaigns, and annual letters to shareholders than are really a crock.

    Could this be an unpaid advertisment for the recruiting effort? Again it’s brilliant but oh so tough to follow through on those expectations.

    And who do we go to so we can get the unvarinished truth? Not MSNBC.

  • Oh yeah to answer your question “Is the Article a Bad Sign?”

    Rob, the bad sign is that Google got big. The last 100 years have proven that big is a bad bet in business. The baggage that goes along with being big is overwhelming for most firms. It makes you slow and stupid. Reopen my book “It’s Not the Big that Eat the Small… It’s the FAST that Eat the Slow.”

    Whether or not Goggle can beat those “big” odds remains to be seen.

  • Very astute, as always, Rob.

    On the 1st issue about demifying engineers; I’ve seen this before at another .com giant, where the effects were devastating – this company went so far as to move everyone on the books who didn’t write C-code, (and their line management), to “indirect labor” on the balance sheet. That was a tough message to deliver to the MBA’s doing 18-hr days and 12-hour flights who actually ran the operation. The most innovative operators either left or stopped innovating (or learned C :-). The company went from leading the .com race to being excluded from the GYM acronym ;-)

    On the 2nd issue –> again, I think you nailed it … google’s strategy is URL-centric but Web2 is moving beyond the URL’s 1:1 limitations, which is a pRoblem for search.

    Great Post, Thanks

  • An awful lot of the innovation that I’ve seen in business has been driven by creative sales and marketing people…indeed, engineers (especially software engineers) have often been more concerned with issues of internal architecture and produceability than with anything having to do with the customer.

  • Bill

    Drucker was not quite right, just as the Vienna era that he came out of was not quite right, but we learn as we grow older and explore different theories and concepts. Brock is in error about his statement regarding “how human brains operate.” Our brains are complex but I believe we can comprehend even that aspect. The trouble is we pRobably have already dismisse or hurt people enough to where they find it difficult to connect with those who do not value theory and application.

  • Rob

    Companies still have that “economies of scale” mindset that drove manufacturers to be big. It’s hard to escape that past. In knowledge work, economies of scale are very different.

  • Yes the conclusions of the PIMS studies have endured. (Profit in Market Share). But if you review the original thinking you’ll see that the PIMS assumptions have been proven to be mostly false.

    So false assumptions have endured… how unbusinesslike!

  • Perhaps I am looking at this from a different end of the telescope, but attracting and retaining good people in our new white-collar world is increasingly fundamental to creating a competitive advantage. What you see Google doing here is setting up their stall as a great employer. You can argue whether or not that is correct, but for them it is a differentiator: “come out of your mom’s basement and join our team. We’ll even walk your dog for you.” It’s a proposition. And it will pRobably work quite well for them.

  • David’s right. The competitve advantage is to attract and retain great people.

    But there’s a gap between what companies say and what they do. Follow through is the hard part.

  • Rob

    That’s a good point, but my concern is that Google is focused on attracting great engineers, not great businesspeople. They don’t seem to mention marketing, operations, business development, etc. at all – in anything you read about them.

    I love Google’s idea of throwing mud at the wall to see what sticks, but ultimately in business you need an economic model to back it up. Some things should be reserved for fun side projects, and some things for pure research. Can Google actually do anything with what they are building?

    For example, I could hire all of the world’s best basketball athletes and let them workout all day and practice crazy things in hopes they come up with some new plays. But they still have to play a game, and they still have to execute as a team to win. Google is releasing all kinds of cool things that have no business model behind them. Maybe they find a way to monetize them, but until they do, their current valuation just isn’t justified.

  • BTW it’s a very small point but I’m almost postitive Drucker did not invent the term “knowledge worker in 1959” or any other year. I’m sorting through my files but I remember reading him giving credit to someone else for that.