The recent announcement by Google that they are reorganizing into a holding company called Alphabet which will hold operating companies for each of their products struck me for a number of reasons. In particular the letter that CEO Larry Page released detailing the reasoning demonstrated a number of key things that keep Google successful.
1. They have stayed true to their core
In the letter Larry outlines that they set out with the intention that “Google is not a conventional company. We do not intend to become one.” The letter demonstrates to me that Google is not a conventional company. It is not a stuffy, formal letter written by lawyers or a PR firm designed to be as inoffensive as possible while still raising the share price of Google. It is a real letter, written by real person, expressing their real feelings, in natural language. He says things like “Sergey and I have been super excited about his progress and dedication to the company” and “Susan is doing a great job as CEO” and “We are still trying to do things other people think are crazy but we are super excited about.” Apparently if Larry Page is one thing, he’s super excited!
2. They demonstrate servant leadership
Servant leadership is the concept that the leader of an organization is there to ensure that their people have the tools, empowerment, and opportunities under which to perform their best.
Robert Greenleaf, the guy that coined the phrase, describes it this way
A servant-leader focuses primarily on the growth and well-being of people and the communities to which they belong. While traditional leadership generally involves the accumulation and exercise of power by one at the “top of the pyramid,” servant leadership is different. The servant-leader shares power, puts the needs of others first and helps people develop and perform as highly as possible.
Larry Page demonstrates his dedication to this type of philosophy in the section of the letter where he describes Sundar Pichai, the new CEO of Google. He says “I have been spending quite a bit of time with Sundar, helping him and the company in any way I can, and I will of course continue to do that.” Then later when describing all the CEOs of their business lines “In general, our model is to have a strong CEO who runs each business, with Sergey and me in service to them as needed.” It must be a powerful feeling to know that the CEO of one of the largest companies in history is “in service” to you!
3. Flexible and innovative
We work with companies every day that are small or medium sized (<500 people) that have the speed and bureaucracy of a large company. It’s almost as if they adopt bureaucracy and rigid multi-layered org structures as way to to demonstrate that they are a “real’ company. This recent article by Sam Altman (of Y Combinator) really highlights the benefits of staying nimble and being a “project” instead of a “company”. While I would never call a multi-billion dollar enterprise a “project” Google does have the spirit of flexibility and adaptability that many companies lack.
Overall I’m really impressed by Google’s switch, by the subtle messages they convey in their letter to investors and I hope that they can hold on to their core values in the long run. The real test will come when Larry Page, Sergey Brin, and Eric Schmidt are no longer leading the charge.