Google Case Study

• Introduction

• Google sets the standard for successful and innovative internet based companies (in 2008 when this article was written)
• Has grown an exceptional rate in the 10 years since its inception
• Excels at:

• IT and business architecture
• Experimentation
• Improvisation
• Analytical decision making
• Participative product development
• General innovation

• Is an extremely data driven business
• Attracts the best and brightest (>100 applicants for every Google job opening)
• While its roots are in its legendary IT infrastructure, technology is inseparable from strategy at Google
• Google embodies the decades-old, rarely fulfilled vision of IT pundits that technology should do more than just support business, it should engender strategic opportunity
• While the massive infrastructure it has managed to build would be difficult to replicate, there are many other aspects of the business that should be considered for emulation:

• Technology coupled with a well-considered organizational and cultural strategy

• Practice Strategic Patience

• Google's mission "to organize the world's information and make it universally accessible and useful"

• Very broad and yet taken very seriously

• Google has expanded well beyond search into other areas
• If it hasn't been able to build the product itself, Google has gone out and bought the business that did

• Youtube, Keyhole (Google Earth), DoubleClick

• Now expanding beyond even technology into energy, internet infrastructure, medical applications etc.
• Says it will take 300 years to achieve the mission
• The company certainly cares about accumulating customers, but its executives believe that over time the business model and the money will take care of themselves
• "Ubiquity first, revenues later … if you can build a sustainable eyeball business, you can always find clever ways to monetize them"
• This clarity and attention to detail is what makes their patience work. Despite the fact that many of their decisions can seem random, they all work to extend the core business purpose
• Companies aiming to learn from Google must first understand that clear, simple directives underlie the vast infrastructure and ostensible chaos described in the article

• Exploit an infrastructure "Built to Build"

• Google's entire infrastructure is built around these key principles that enable all of their other success

• Scalability

• Google owns a network infrastructure consisting of approximately one million computers
• System is built on the back of a custom operating system that is built to scale

• An accelerated product development life cycle

• Google encourages taking products from concept to test phases very quickly and happily involves their customers in the development and testing phases of product development
• Customers are an essential part of the development team
• Google launches lots of new products and the one that are accepted and taken up by the customers are the ones folded into the wider Google portfolio. All other projects are discarded

• Support for third part development and mashups

• By creating their own custom infrastructure, Google can ensure a better user experience and higher quality of service
• Google pays close attention to how an application will fit into the infrastructure
• Google's flexible infrastructure acts as an innovation hub where third parties can share access and create new applications that incorporate elements of Google functionality
• This benefits the third parties and Google themselves

• Products are widely adopted
• Partners don't waste time replicating existing products

• This is known as mashups
• The notion of allowing useful services to be mixed and matched with relative ease across organisational boundaries has interesting implications for the competitive environment and for organisational efficiency, engendering a "just try it" class of lean innovation
• The model provides continuous feedback, allowing for the improvement of products over time

• Rule your own ecosystem

• Google can control the evolution of its ecosystem and claim a disproportionate percentage of the value created within it
• Scale has become one of Google's strongest assets

• Its still possible to emulate part of the google model built expressly to foster innovation

• Example about Chinese textiles brand

• Exercise Architectural Control

• Google has demonstrated the feasibility of tracking the performance of mashups
• Amazon has also been successful in this space with the ease it can track web behavior and closely monitor the performance of those services
• Amazon's ownership of the infrastructure behind the internet gives it incredible leverage over its innovation partners
• This level of leverage may motivate third parties to innovate and test new products without first engaging in contract and revenue sharing negotiations with internet power houses
• These advantages are not necessarily things to flaunt though. It is important to look like you are here to help everyone
• "It is quite possible that what Google learns across various media as it solves problems for the ecosystem partners may position it to become the competitor that it now claims not to be"

• Build Innovation into Organisational Design

• Budget innovation into job descriptions

• Talking about the 80/20 rule at Google
• Has a "Director of Other" to help guide this activity
• Permeates all levels of the business
• This explicit investment in innovation - supported by the management strategy - has produced streams of new products and features
• More than 50 new products resulted from Google's 20% time (massively outdated stat)

• Eliminate friction at every turn

• Google builds its entire business around being able to react rapidly
• Google's approach to innovation is highly improvisational, which helps to attract the top talent
• Ex Microsoft engineer: "For guys like me, who have a love affair with software, being able to ship a product in weeks - that's an irresistible draw"

• Let the market choose

• Google effectively crowdsources its product strategy
• If the product is good, people will buy it, otherwise, let it fail
• "ubiquity first, revenues later" and "usefulness first, usability later"

• Cultivate a taste for failure and chaos

• Don't be afraid to chase after a crazy idea and then fall flat on your face
• "Please fail very quickly - so that you can try again"
• Larry Page told Fortune that he had praised an executive who made a several million dollar blunder: "I'm so glad you made this mistaake. Because I want to run a company where we are moving too quickly and doing too much, not being too cautious and doing too little. If we don't have any of these mistakes, we're just not taking enough risk"
• This level of risk tolerance is rare
• Google's commitment to budgeted innovation and a frenzied, low friction product development process is already worthy of emulation by firms that simply need more new products and services to offer the marketplace

• Support inspiration with data

• Any new innovation at Google will not be accepted without plenty of supporting data
• Google takes an analytical, fact based approach not only to its core business of page rank algorithms but also to making any change in its web pages and deciding what new services to offer
• Google also makes use of prediction markets consisting of panels of employees
• If you are going to use prediction markets you need to be ready to hear the real truth from your employees and not just yes man answers
• "We're smart, but we're not smart enough to ignore data. Nor are we smarter than thousands of our bright, motivated employees"
• What truly sets Google apart from most businesses is its culture

• Create a Culture Built to Build

• The culture at Google is one where people prosper based on the quality of their ideas
• Google supports this by providing plenty of intellectual stimulation
• If a company actually embraced - rather than merely paid lip service to  - the idea that the right employees are truly a business' greatest asset, it would treat its employees the way Google does
• This support does not come without costs though. Google expects hard, almost obsessive commitment from its employees

• There are now many companies successfully and unsuccessfully replicating the Google model, and the pool of top talent is becoming more and more competitive
• At the moment, (in 2008) Google sets the standard for 21st century productivity and growth. If your company employs knowledge workers and needs to innovate, can you afford to wait and see whether Google's approaches pay off over the long term? No

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