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How Google Works

Eric Schmidt and Jonathan Rosenberg

Traditional management from time when mistakes were expensive and only the top management had comprehensive information. Process designed to slow things down. Modern process opposite - give everyone all the information and continually experiment, allowing for mistakes.

Example of Google doing this. Larry Page upset that the ads Google was serving up were being gamed by companies gaming the system. They were offering to pay higher prices for clicks, but were irrelevant to the search. Trad company would call a meeting, set up a task force, run some trials and eventually serve up a solution. Page simply printed out some of the offending pages and stuck them on the wall beside the coffee machine with a "These ads suck!". He did this on a Friday afternoon. Over the weekend, a group of engineers had worked out a solution - assign a rating relevance to give ads place on page, rather than the price bid by the advertisers.

The engineers who did that had no direct responsibility for the ads, nor any obligation at all to work through their weekend to suggest a solution, but the company ethos was to solve problems, and didn't matter how or who.

HIPPOs - Highest Paid Person's Opinion. These outfits are 'tenurocracies', because power derives from tenure, not merit. A CEO of Netscape "If we have data, let's look at data. if we just have opinions, let's go with mine." We all know it's the quality of the idea that matters, not who suggests it, but often ignored. You need a culture where there is 'an obligation to dissent' - a devil's advocate.

Amazon's '2 piza' rule - all teams have to be small enough to be fed by 2 pizzas - anything bigger gets into politics as to who works and who gets credit.

No room for knaves in a company. (Tom Peters "There is no such thing as a minor lapse of integrity") Knaves can be the arrogant and unsufferable, the guys who don't bother to clean up, the ones who get jealous of other's success.

Google image search grew out of porn filtering software, which basically judged content on (a) how much skin (b) how long viewers stayed on a page after they'd entered a porn term into search box. (If they looked for 'breasts', a quick dismissal of a page probably indicated a medical textbook rather than a titillating one).

Henry Ford's "If I had listened to customers, I would have gone out looking for faster horses." Incremental improvements fine for established businesses.

Trad business based on Coase's Law: it usually makes sense for a company to do everything inhouse, because the transaction costs of finding vendors, negotiating contracts, and making sure everything gets done right, are high. So the C20 was dominated by big hierachical companies. But the Internet has caused transaction costs to drop so steeply that makes more sense to outsource.

many companies see this as purely a financial issue - save money by getting work done by a lower wage place. But it should be more - should use it to develop better products. Realize that no matter who you are, most of the smart people work for someone else.

Ray Kurzweill: "Information tech is growing exponentially, but our intuition about the future is linear."

'Growth mindset': if you think your qualities are set in stone, you will be stuck repeatedly trying to prove those abilities. But if you have a growth mindset, you believe your qualities can be modified and cultivated through effort. You can adapt and change. Usually, when hiring, people look for someone who has excelled in that role before. But you are actually better off seeking someone who is open to learning, and growing the job.

When you're hiring, you want to see their thinking, not their resume. "What surprised you about .... (a challenge on their experience)", "If I went through your browser History, what would I learn beside what's on your resume?". More books on Business

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