Eric Schmidt (Ex CEO and current Chairman – Google) management style and CIO

Image representing Eric Schmidt as depicted in...

Image via CrunchBase

“If you’re not making mistakes, then you’re not doing anything.”

John Wooden (1910 – 2010) Hall of Fame basketball coach of UCLA

Eric Schmidt (1955 – ) Google CEO and Chairman from 4th April 2011 onwards

Today’s article is the sixth in a series of articles (1st Steve Jobs, 2nd Michael Dell, 3rd Warren Buffet, 4th Bill Gates, 5th Larry Ellison), analysing current and past leaders to ascertain how Chief Information Officer’s (CIOs) can learn better management by applying the management practices of leadership, practiced by these leaders.

This article also follows my previous articles on Google, Microsoft Googles Apple in 2011, Google Apps – The myth, hype and reality, Weather bulletin – Google Cloud and icy Microsoft downpour and Used iphone under a palm tree where I met android and formed a symbian relationship with a blackberry

Eric Schmidt arrived at Google to help Google’s inexperienced founders; Sergey Brin and Larry Page. He has led Google to become a globally recognised company with approx 24000 employees. Recently, he has stepped down to become the chairman and to pass the leadership to Larry Page (on 4th April 2011). Over the years, he has mentored the young founders and believes that the time is now right for them to take the helm. For his efforts, he leaves with a golden shake of $100 million in equity and shares worth 9.1% of Google stock.

“As a CEO, Schmidt is more inclined to provoke than proclaim. “Google is run by its culture and not by me”, said Schmidt in 2009. In Google, when a key executive decision is reached, all interested parties are invited to the decision making process and are encouraged to share their opinions. Schmidt’s job is to oversee the whole procedure and make timely decisions. This bottoms-up way of decision making usually leads to a better buy in and a better decision.  Google allows employees to spend 20% of time on self-directed projects. To closely connect to Google’s frontline innovators, each week Schmidt and his senior associates spend up to six hours in dialogue with team members from across Google, who believe their projects have great potential. This unique management style has hatched a series of great products like Gmail and Google News.” Courtesy Vivian’s Tech Blog

PS: CIO is a generic term and other analogous titles are Head of IT, IT Director, Director of IT etc.

The Management Style

What can CIOs learn from Eric Schmidt’s management style? Let’s investigate while allowing you to decide.  (In no particular order and a few other sources utilised):

1. How do you run this company? – ES “It’s run in a strange way. We have a normal hierarchical structure. The company is organized ‘bottoms up’ from the standpoint of product creativity and ‘tops down’ from running the quarter and the financials and so forth. We encourage dissent, we encourage large group conversation, we encourage there to be somebody who’s opposed to the decision, and we work very, very hard to be not hierarchical in the way that decisions are made. Often if we can get a decision, we get the best decision if we have two decision makers, not once. We never make decisions in private; we always do them right in front of everybody.” Courtesy Marketplace

2. When the going gets tough, investment in people always pays: ES – “Getting the most out of knowledge workers will be the key to business success for the next quarter century. Here’s how we do it 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.

At Google, we seek that advantage. The ongoing debate about whether big corporations are mismanaging knowledge workers is one we take very seriously, because those who don’t get it right will be gone. We’ve drawn on good ideas we’ve seen elsewhere and come up with a few of our own. What follows are ten key principles we use to make knowledge workers most effective. As in most technology companies, many of our employees are engineers, so we will focus on that particular group, but many of the policies apply to all sorts of knowledge workers.” – Courtesy 1000 Ventures

For more, read – Google’s ten golden rules for getting the most out of knowledge workers.

When Eric joined Novell, the company’s future was very much in doubt. He correctly recognized a culture of fear that pervaded the organization. Bright engineers with revolutionary ideas were reluctant to voice them for fear of being fired. The engineers however, complained vociferously amongst themselves leading to a culture of corporate cynicism. Recognizing this pervasive bellyaching, Eric asked two engineers he met on the company shuttle, to give him the names of the smartest
people they knew in the company. Eric met with each of them, and asked them in turn to identify the 10 smartest people they knew. In a few weeks, Eric had a list of 100 engineers he considered critical to Novell’s future. He met with each of them personally, encouraging them to take chances and follow their instincts. He removed the possibility of reprisals by their managers for voicing their opinions. This inspired the engineers and focused their efforts, resulting in innovative and improved products. These changes helped Novell transform itself from a loss of $78
million to a gain of $102 million”. – Courtesy Scribd.com

One person alone cannot handle everything. The secret is to surround yourself with employees that are smarter than yourself. These smart people will challenge organisations and force them to think differently. I covered this, under mobility of management when I covered; can IT Management failure be caused by a deadly disease? Part II. CIOs need to understand the importance of retaining and investing in people as one of the business’s most important assets is yet again confirmed by another business leader.

3. Business/IT Strategy: “At Google, Eric has stated the company’s goal as “…Organizing the world’s information making it universally accessible and useful”. An engineer working to index billions of web pages can easily identify with this laudable goal. As a practical matter the goal of making information universally accessible is a more
meaningful goal for the engineer, interested in making his mark on society, rather than a mundane goal of increasing Google’s revenues by $300 million dollars. Eric considers this transfer of ownership to be so important that while at Novell he created a quarterly in-house radio show modeled after NPR’s “Car Talk”. He even made tapes available for in-car listening.” – Courtesy Scribd.com

Sometimes it’s best to follow your instincts and to believe in yourself to do the right thing. Paralysis by analysis is often the cause that many organisations cannot do well. It’s as Nike says, Just do it!

4. Rating of employees’ performance: – In the past, I have reviewed many CEO’s management style but Eric Schmidt’s style is the closest fit to Deming’s ‘Annual rate of performance’ that I have yet come across.

“Eric management style is to let the team’s progress be reviewed by individuals the team respects. In most companies there exist a few individuals that are universally respected or at least more respected than everyone else.
These individuals have a way of articulating principles and have very good memories. Since they are considered impartial, teams are more open to receive feedback or decisions even if the decision goes against them. – Courtesy Scribd.com

5. Earn respect by ‘listening’: – ES “Listening to each other is core to our culture, and we don’t listen to each other just because we’re all so smart. We listen because everyone has good ideas, and because it’s a great way to show respect. And any company, at any point in its history, can start listening more.” Courtesy Andrew McAfee

6. Competitive advantage: This is an area of great interest, as currently, Google is the undisputed king of search but Microsoft’sa Bing is knocking on its doors. So, for the moment Google is able to keep its competitive advantage. The worry for Google has been the defection of key employees (who view Facebook as ‘cool and the place to be’) to companies such as Facebook. Social Media is an area where Google doesn’t really have a strong foothold and that is worrying for them while in the mobile arena, Android is not a huge money earner (albeit, earnings are approx $6 per user per year) when compared to Apple IOS. Google is in a battle with Apple, Microsoft and Facebook and it is ambiguous which markets Google ultimately wants to compete within.

CIOs need to ask themselves how they can help the business through leveraging IT to create competitive advantage. I covered this in my post, Leveraging IT for Competitive Advantage – Myth or Reality?

7. Talent acquisition – Hire ‘Action’ oriented employees: “I might have been mistaken, actually. Having your name and picture up on that big screen at End of Quarter may not be the biggest incentive. The thing that drives the right behavior at Google, more than anything else, more than all the other things combined, is gratitude. You can’t help but want to do your absolute best for Google; you feel like you owe it to them for taking such incredibly good care of you.” Source unknown, courtesy Oliver Thylmann

Google actively recruits recent Ph.D.’s and Ph.D. candidates. All 1,900 Google employees are researchers and developers in addition to their regular duties. Where other companies will keep their research departments and core businesses separate, Google places all their Ph.D.’s in the rank and file of the company. Workers at Google enjoy a company devoted to benefits (Stross, 2004). They also enjoy an informal company culture where employees have access to gyms, massages, pool and ping-pong tables, well stocked snack rooms and other recreational amenities (Google Culture, 2009). Courtesy Marty Andrade

A CIO needs to trust their gut instinct, as one can only learn a certain amount in an interview. I think, the strategic fit, is a very good measure. How will a new hire fit into the culture of the company? Will they enjoy it here? Have they worked in a similar culture before? The danger is that the culture could be so alien to the new hire, that they find it difficult to adjust.

Eric Schmidt has hired the smartest people who can ‘get the job done.’ Hire your friends and past colleagues, as they will have loyalty to you and as you know them personally, an informed decision can be made on whether they have what it takes to realise your ‘vision.’

8. Spotting opportunities and innovation: LE –  “innovation is the key to Google’s success, everything Schmidt does revolves around creating more innovation. Without it, Schmidt believes there is nothing to prevent another company from overtaking Google as the king of digital information.  Innovation is systematically encouraged at Google at all levels throughout the organization, including management. At Google, management follows the “70/20/10″ rule where seventy percent of their time is spent on core business projects, twenty percent is spent on projects related to the core business and ten percent is spent on projects unrelated to the core business (Battelle, 2005). Schmidt, in order to remain true to the 70/20/10 rule, actually divides these projects into different rooms and tracks his time spent in each of the rooms.” Courtesy Marty Andrade

For More Info:

The Daily Telegraph’s articles on Eric Schmidt

Google’s greatest innovation may be its management practice

Android OS is profitable, might generate $10 billion per year

Google CEO, Eric Schmidt: “We don’t have a 5 year plan.”

The New York Times: Eric E Schmidt

Google CEO, Eric Schmidt, will not talk about “Private conversations” with Apple about becoming CEO

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Search wars – Past, Present and future – Bing, Google or new entrant?

My favourite quote of the year, interestingly, was about Bing. In June 2009, The Onion asked the question, “Microsoft has announced the launch of a new search engine it calls “Bing.” What do you think?” George Wade replied, “Bing? Interesting. I’ll have to Google that when I get home.” 

As the year, 2009, draws to a close and I write my last blog of the year (I will return, Insha’Allah, in the New Year). I wanted to write about, ‘Search’ that will have the greatest impact on our Internet lives, not only now but well into the future.

Hindsight is a wonderful thing, as we have all realised as life progresses. Why am I mentioning this? Internet and indeed Web Search Engine history is fascinating as the pace of IT continues akin to a Ferrari in the fast lane, as a branch of IT, the web’s pace has been analogous to that. Even before, Tim Berners-Lee invented the World Wide Web, searches were conducted using Archie (Inspired by Archie comics), Veronica etc. This was eventually followed up by the acceptance of Netscape Navigator as the world’s first leader of web browsing software. In the early 90s, Microsoft (MS), did not think that the Internet would really take off, and even their boss said, “The Internet? We are not interested in it”- Bill Gates, 1993. That soon changed when they went head to head with Netscape and launched Internet Explorer, in the first browser war that MS eventually won. At the time, even I thought that MS could not win and that Netscape would retain its title and the majority of its market share.

As I was becoming comfortable with Yahoo, along came Google and swept us all away. The ever evolving pace of technology seems to catch most of us off guard. Who could have known, even a few years ago, that the iPhone would give established players like Nokia a run for their money.

So, we arrive in the present, just before Christmas 2009 and are left to wander whether the razzmatazz with which MS launched, its new search engine, Bing, has actually made a dent to Google’s popularity or not. After all, inspite of being in denial in June that it was not competing with Google, we all knew that MS was after Google’s crown. 

If we take into account, the first browser wars, the battle was simple as it was just between two browsers. Forward to the future, today and it is a completely new and different arena and era. It is a complicated affair as it is not simply a battle between Google and Microsoft for the, ‘search’, crown anymore. Both MS and Google thrive on innovation. Technological history has taught us that innovative businesses do not always get things right, as witnessed by Nokia losing to Apples’s iPhone, MS Zune to iPod/iPhone and Google’s failed products.

So, anyone sense where I am going with all of this? Well, firstly, in the true sense of innovation, Google acknowledges and accepts when it has brought a product to market that fails to capture the imagination of that market and withdraws such products, whereas, others haven’t done that. What is the secret to Google’s success? It’s simple, no, really it is. The secret to Apple’s and Google’s success is that they listen to us, the customer. They are finely attuned to what, we, the consumer want and need, just as my previous article, has alluded to. Secondly, this battle is not just about the search functionality anymore, as Google is now providing Cloud Computing – MS has Azure now, the Chrome browser, Android mobile phone Operating System (OS) – MS has Windows Mobile, Chrome Desktop OS, YouTube , Google Wave – MS has no equivalent as far as I know, Google Docs  (MS equivalent version in Office 2010, free for home/students) and many more. Microsoft is still innovating, albeit, not so successfully. It is therefore clear that wherever Google/MS innovate, the other is forced to follow. This is the problem as it is becoming increasingly blurry on whether Google is a search engine or whether MS is a OS/Apps provider.

2010 will be very interesting as the search arena witnesses some significant changes, such as, news channels paying for inclusion within searches, Yahoo using Bing as its engine to take on Google and perhaps even the search for the holy grail of corporate data mining using search engine technology, as let’s face it, Google has been in the business intelligence business for many years now! MS is getting serious and judging by its recent release of Bing’s iPhone app, as always, will take the fight to Google. 

In terms of current market share, where are these two behemoths, well, again, it depends who you talk to. This article puts MS Bing with 10%, while this article reckons that the previous article is all baloney and that MS Bing has 3.49%. Will we have a completely new entrant? Who knows

For those, who want to use Google side by side, click here

Let the wars begin

Let me finish by wishing everyone a merry Christmas and a happy new year.

The future Graduate and the IT and Computing skills shortage

I have wanted to write this article for a while now.  When I was in university, the IT skills shortage stood at 3 million and the popular IT/Computing magazines were half full of employment adverts. That era has long gone but we, in the UK are still suffering as IT skills shortages reach the highest level in 10 years,  we continue not to learnt from the past and it seems that while we continue to churn out graduates, they seem to lack skills that employers want/need. In addition, the coming generation shun the industry because of a perceived lack of glamour and a reputation for hard work. It doesn’t all end there as recent reports suggest that The UK’s software development industry will suffer the same decline as the country’s manufacturing sector unless action is taken to tackle the skills shortage.

Have we become a nation that is forced to import talent from asia? Do we import talent because its, well, cheaper? I will let you decide.

This topic  is close to my heart as I strongly feel that the UK can become a leader in the IT/Computing arena. Well, if that is the case, how do we go about doing it?

I have realised now the secret of success for new graduates is to locate a degree course that equips them with the theoratical and practical knowledge of performing well in their area of study. Students would do well by using ‘pre-job board’ sites like Careerplayer. This site holds hundreds of videos with real people/graduates in real jobs, talking about their job and what it really entails, good and bad – sharing their honest view of their role. Using a site like Careerplayer will help them to de-select the IT/Computing career paths, if its not for them.

While researching this topic, I found an interesting article by Felix Redmill of Redmill Consultancy . I totally agree with all that has been said by Felix but would want to add by saying that both the government and industry have a role to play to ensure that the UK has a future equipped with suitable graduates, in essence creating a pseudo standard for such degrees with a vision for wider adoption.

I have split IT and Computing into three areas as I feel that these three areas need a slightly different kind of graduate and at least two of these areas have a pseudo standard that should be adopted/followed UK wide. In actual fact, to raise the bar of these degree courses, I would go as far as to say that all IT/Computing/gaming degrees should be validated by the government, with a minimum agreed of modules that are standard within all  three areas identfied below:

1. Information Technology Management

This is an area where government and industry have been brought together by eskills UK to validate IT management courses.  Read the following for more information:

News in Brief for new Information Technology Management for Business (ITMB) Degree course

HP teams with Thames Valley University to address UK Skills Shortage

eskills and IMTB

Universities offering the IMTB degree course (14)

Sample IMTB degree content from University of Manchester

 2. Software Engineering (Programming)

I couldn’t find any resources to indicate even any pseudo standards. This area would be covered well by a region by region basis and associated demand for programmers according to industries served within that region. For example, the universities near the UK’s silicon valley (Reading area) could offer courses on .net, Oracle etc due to local presence of these industry behomeths.

3. Computer Games Progamming

Again for games programming, 81 universities offer courses but only 4 are accredited by Skillset. Again, this suggests a lack of any standard degree for gaming.

It is no wonder, then that when graduates graduate, employers seem bewildered as to the calibre of graduate that they are taking onboard. I have even known of students that have completed their degree courses, employed by employers as programmers only to find that they do not know how to program in the language being used by that employer!