Larry Page took over Google this week and the rumors are hot and heavy with regard to what he’ll do.Two of them stand out: 1) he’ll return Google to its start-up roots and 2) he’ll eliminate middle management and put engineers in control of the company.
While Google could use some change, these possibilities would put a smile on Steve Ballmer’s face and even get an ailing Steve Jobs to grin a bit. Let’s explore that this week.
Execution vs. Innovation
We’ll start with another comment attributed to Larry to set a foundation: he wants Google to be more innovative.
This is not an uncommon comment because I can see similar comments from companies all over the tech segment. These comments are largely the result of longingly looking at Apple and seeing the success and falsely attributing it to innovation.
While Apple does innovate, their lead skill is actually execution. On any given year of last decade Microsoft released far more ideas than Apple did. I think you could argue therefore that Microsoft is more innovative.
Microsoft even had many ideas first: Origami was the iPad done poorly, Windows Phone was the iPhone done poorly, and even the iPod Touch was preceded by the Zune and the Portable Media Center.Innovation wasn’t Microsoft’s problem, it was execution.Every one of those Microsoft products was released with inadequate marketing, questionable hardware designs, unfinished components and eco-systems.
Apple launches far fewer projects. What makes them different is they finish what they start and, comparatively, do a better job than their competitors, including Google and Microsoft.
Okay, now we can move on. But remember, execution is the problem at Google and Microsoft that needs to be fixed – not innovation – in fact I could argue both companies innovate too much.
Start-up companies, at least those that are successful, are known for both their lack of bureaucracy and whatever their core innovative idea is. However, what makes a start-up successful isn’t the innovation, it is the execution.
Ask Paul Allen, who recently published an autobiography titled “Idea Man.”He was the initial idea guy at Microsoft but you can see from his history since that, while he had a ton of great ideas, he couldn’t execute on them to save his life. Once he had an idea he moved on and left the execution to others. With Microsoft and Bill Gates, that worked, but without Bill Gates, not so much.
Google had an innovative idea in search and particularly Ad Words, but it was their execution through that revenue model that made the difference between that company and so many other dotcom start-ups of its period.But over time, the execution side of Google moved on, which is why over a decade later the majority of Google’s revenue still comes from that first set of ideas. Little derives from anything else.
In fact, Google currently can’t seem to sell anything successfully. They are known as the company that does cheap knockoffs of iOS and Microsoft Office and gives them away for free.The value of something is connected to how much someone is willing to pay for it and Google spends millions developing products that have no monetary value. And if it weren’t for Bing they likely would have stopped improving Google search some time ago, much like Microsoft did with IE before Firefox.
At the very simplest task of most successful companies – the ability to actually get paid for a product you build – Google has seen failures. And they cover it up through their massive control over web advertising revenue, which largely resulted from work that was done years ago by people who mostly aren’t there anymore.
So going back to a start-up successfully would mean bringing in people who know how to execute and possibly getting the company paid for all the work it does.However, that isn’t a simplification problem, that is a redesign problem, and I don’t think Larry Page is thinking of that at all.
I’ve worked with engineers most of my life and they can be incredibly talented. Other aspects engineers are that they are typically not known for being particularly social nor are they thought of as being particularly creative.
Put a different way, Google designs its hiring process to favor engineering skills for all jobs and it does a nice job of that. Now if you were to take a young Steve Jobs or Bill Gates and into Google they likely wouldn’t even make it through the first layer of Google’s selection process.Yet both have engineering skills, but both are far more expert at the things that actually made their respective companies successful.
Google’s selection process is already too engineering-centric and if Larry Page makes it even more so that would be like a guy with beer drinking problem switching to vodka. Things will get worse. Were Apple run by engineers rather than a mix of engineers and creative types it likely would be out of business today.
I wasn’t a fan of Eric Schmidt and believe he is largely responsible for setting the stage for Google’s decline this decade much as he did for Sun and Novell prior to joining Google.It takes a while for a cancer to kill a company; it was well past time Eric moved on.
However, to fix a company you have to actually diagnose what the real problem is and for Google it isn’t innovation, it is execution and largely tied to an overly engineering-centric hiring model. This model is resulting in an inability to sell the products they create and an inability to maintain the relationships they need to assure the success of Android and the Chrome OS.
What Larry Page is rumored to be doing should actually make the problems at Google worse, which is exactly what happened when Jerry Yang took back control of Yahoo.Therefore it appears that Google is trending to be the next Yahoo. That should make Steve Ballmer and Steve Jobs very happy, the Google employees and partners not so much.
More than anything else, Google needs to step back, analyze its problems, and then develop a cure for them.The path they seem to be on doesn’t look promising.