Warren Bennis: Google's Growth EngineBy Warren Bennis
Long before Google filed, in April, for its upcoming IPO, the Silicon Valley company had achieved something rare in businessit had become a verb. Like millions of others, I google on a daily basis. I often turn to the search engine when some fragment of a quotation is haunting me. Merely by typing the remembered bit, I can almost always get the full, correct quote, complete with author, in a fraction of a second.
But Google has long fascinated me for another reason. It strikes me as a splendid example of creative collaboration. When Patricia Ward Biederman and I wrote Organizing Genius: The Secrets of Creative Collaboration (Perseus, 1998), we studied seven revolutionary Great Groups, as we called them, from the first days of Disney Feature Animation, to the Manhattan Project, to the organizers of Bill Clinton's first presidential campaign. Google's engineers, founders and CEO have all the earmarks of a Great Groupa talent-driven organization or enterprise, filled with people who set out to do something extraordinary and succeed in doing something that's never been done before. And like other Great Groups, Google has a few unique twists of its own.
I should say at the outset that only time will tell if Google will avoid the fate of so many other flashy dot-coms, which, when they crashed, left behind piles of office toys and disappointed investors. But Google, whose revolutionary approach to search dominates the field, seems to have the ingredients that have produced greatness in the past. Whether commercially successful or not, all our Great Groups were daring innovators who were convinced not just of the importance of their work but that they were all but on a mission from God. All were carefully chosen collections of extraordinary talents who worked on their world-changing projects with an obsessive brio that often made them forget to eat or sleepand occasionally doomed their marriages. However brilliant, they all believed, at least for the duration of the project, that "None of us is as smart as all of us."
All such groups have other similarities. They are inevitably playful, often blowing off steam in childish ways. When they weren't frantically trying to make their deadline to finish Snow White and the Seven Dwarfs, for instance, Disney's animators would slide around the hallways on discarded animation cels. So I was heartened to learn that the resident geniuses at Google are having a good time, even as they seek the Holy Grail of instantaneous search. Exercise balls in the hallways, roller-hockey in the parking lot, Segways for making transportation an adventureall are signs that the Google staff is high on the kind of collective intellectual pleasure that marks a Great Group. People who are having fun are more creative than people who are nota lesson 98 percent of U.S. businesses have yet to learn. Having fun doesn't make a group great, but it is an indicator that morale is high and the conditions are right for creative work.
Although Google now dominates search, it could have plenty of trouble ahead. Those who closely analyzed the quirky Owner's Manual for Google's Shareholders, released with its IPO filing, shook their heads over its failure to disclose a lawsuit, filed by Digital Envoy Inc. (a small Southern competitor), that claims Google unfairly used its technology to sort potential web advertisers geographically. But the close readers may have missed the larger picture. Google seems bent on changing U.S. business as usual. Its IPO document is part manifesto, promising that the company will not be driven by the practice of quarterly numbers reporting that has encouraged endemic short-term thinking in corporate life in the U.S. That's bold and original indeed, although time will tell if it will change Wall Street's ingrained practices.
The closer you look at how Google operates, the more you see signs that founders Sergey Brin, 30, and Larry Page, 31, and their 48-year-old CEO, Eric E. Schmidt, are doing the right thing to make greatness possible. Like many other creative enterprises, Google encourages the kind of experimentation that, even if it ends in failure, identifies what won't work before the company has invested too much into an idea. The fact that Google can float new features on its sitesuch as its controversial e-mail service Gmailand constantly evaluate user response, gives the company an enormous leg up in deciding which applications users like.
Just as important, Google has an organizational structure that encourages creativity instead of stifling it. Rather than being assigned tasks, engineers are guided by a company-wide "Top 100" list of projects, though the actual list numbers twice that many. And to make sure ideas are not shot down before their time, some on the list are marked with an S, for Skunk Works, to make them safe from critical battering. Google's head of engineering, Wayne Rosing, told Fast Company magazine that when he first joined Google, in 2001, its engineering department had managers. But, as Rosing put it, the managers tended to tell the engineers, " 'No, you can't do that.' So Google got rid of the managers." Now most of the staff work on projects they choose; engineers form three-person teams, and members take turns acting as leader. Great Groups are famously averse to heavy-handed management; members often respond to it by walking out the door. The unusual decision to eliminate managers is the sign of a company that is inventing itself as it goes along.
But Google is at a critical point in its history. The IPO, which hopes to raise $2.7 billion, will force Google to grow up fast. Critics have already chided the company both for its plan to offer dual-class stock, and for planning to sell only the more restricted shares to the public. But in the IPO Owner's Manual, the founders insist that the dual structure, by limiting the power of ordinary shareholders to interfere, "is biased toward stability and independence and . . . requires investors to bet on the team," especially the founders. That structure, and the IPO's Dutch auctionwhereby investors will bid on how many shares they want to buy and how much they are willing to paywill also democratize the IPO process, thereby reducing the typical reliance on investment banks. Dutch auctions have been tried before without success, but the public may happily opt to leave the lion's share of control in the hands of those who seem to know best what creative people need in order to succeed.
The IPO will no doubt roil Google's culture. If, as predicted, the IPO makes millionaires of 10 percent of the staff, then many will probably quit their jobs. Collegiality will be harder to sustain in a company in which some are millionaires and many more are not. As to the competitive threat that Google faces from Microsoft and Yahoo!, everything I know about Great Groups tells me that taking on some Goliath-like competitor will only energize Google's engineers.
What may be more threatening than competition to Google's long-term prospects is the relatively short half-life of Great Groups. For the most part, these intense collaborations last only as long as the project. Even obsessed geniuses burn out. Once the bomb is built, or the PC is invented, the members of the group suddenly realize that they have been working 20-hour days for a long time, and they can't remember the last time they petted the dog or ate a meal with their children. Suddenly, work that seemed like play isn't fun anymore. Insiders say that Google engineers will continue to work maniacally until search takes, not two-tenths of a second, but what seems like no time at all. And then? If Google can re-invent itself once it has perfected search, and it's too early to tell whether it can, it may develop what no Great Group has ever had beforethe ability to last.
Warren Bennis is a Distinguished Professor of Business at USC and Chairman of Harvard University's Center for Public Leadership.