Organizing for Innovation at Google
Google was founded in 1998 by two Stanford Ph.D. students, Sergey Brin and
Larry Page, who had developed a formula for rank ordering random search
results by relevancy. Their formula gave rise to an incredibly powerful Internet
search engine that rapidly attracted a loyal following. The search engine enabled
users to quickly find information through a simple and intuitive user interface.
It also enabled Google to sell highly targeted advertising space.
The company grew rapidly. In 2001, Brin and Page hired Eric Schmidt, former
CTO of Sun Microsystems and former CEO of Novell, to be Google’s CEO. In
2004, the company went public, raising $1.6 billion in one of the most highly
anticipated IPOs ever. Under Schmidt, the company adhered to a broad yet disciplined mission: “To organize the world’s information and make it universally
accessible and useful.” This led the company to leverage its core search and
advertising capabilities into blogging, online payments, social networks, and
other information-driven businesses.
By 2014, Google had sales of over $66 billion, and employed more than
57,000 people. Despite this size, however, the company eschewed hierarchy
and bureaucracy and sought to maintain a small-company feel. As noted by
Schmidt during an interview, “Innovation always has been driven by a person or
a small team that has the luxury of thinking of a new idea and pursuing it. There
are no counter examples. It was true 100 years ago and it’ll be true for the next
100 years. Innovation is something that comes when you’re not under the gun.
So it’s important that, even if you don’t have balance in your life, you have some
time for reflection. So that you could say, ‘Well, maybe I’m not working on the
right thing.’ Or, ‘maybe I should have this new idea.’ The creative parts of one’s
mind are not on schedule.”a
In accordance with this belief, Google’s engineers were organized into small
technology teams with considerable decision-making authority. Every aspect of
the headquarters, from the shared offices with couches, to the recreation facilities
and the large communal cafe known as “Charlie’s Place,” was designed to foster