When walking around Google's offices in Silicon Valley or New York, it's easy to mistake the $38 billion company for a cool-looking, experimental-education university.
There are art installations hanging from the ceilings, murals on the walls, and people who look a lot smarter than you having deep conversations on leather couches. In glass conference rooms, there are even smarter looking people engaged in more intense conversations and you can't help but think they're talking about advancements in artificial intelligence, debating the existential meaning of evil, or considering whether the average consumer is ready to buy a car that drives itself.
In short, Google is a lot like the milieu from where Chief Executive Larry Page and co-founder Sergey Brin started the company while Ph.D. students at Stanford University. Google's culture, as author Steven Levy noted in his book on the company, is also informed by its founders attendance at Montessori schools, which promote independent learning and encourage students to challenge conventional wisdom.
"It's really, really ingrained in their personalities," Google Vice President Marissa Mayer told Levy. "To ask their own questions, do their own things. To disrespect authority. Do something because it makes sense, not because some authority figure told you."
Google's culture belies a money-making machine that generated $10.65 billion in revenue in its most recent quarter and plays an overarching role in our daily lives. Google runs not just Internet search, but smartphones and mapping tools, and even has a hand in telecommunications access and solar energy.
Yet the Web allows competitive threats to emerge from seemingly nowhere. So to keep Google relevant, Page is bringing a renewed sense of urgency and focus to the company. In the past year, the CEO has shut down or combined over 30 products in service of what he calls "putting more wood behind fewer arrows." Unlike an elite university with private endowments, Google must fight every day to keep its money machine rolling.
So how does Google sustain a culture that promotes what Page calls "a healthy disregard for the impossible," while implementing the discipline and focus necessary to combat challenges from Facebook, Apple and Amazon? A big part of the answer is making Google even more like a university than it already is with GoogleEDU, its in-house leadership development and education program.
Do something because it makes sense, not because some authority figure told you”
With GoogleEDU, the company has sought to formalize and intensify learning at the company in a completely new way. The company offered 186 different classes last year, which were taken by about 12,000 employees, or about a third of its global workforce, a marked jump from previous years. The frequency with which those classes were offered jumped 295% between 2008 and 2001, the company says.
The subject matter ranges from presentation skills to marketing to advanced negotiations. In addition, the company has also discontinued or revised "programs that don't meet our high quality bar or drive desired behavior changes, as well as those that we find are just less applicable to evolving Google priorities," says spokesman Jordan Newman.
Companies have long spent time and money training their workforces. U.S. businesses spent $171.5 billion on learning and development in 2010, the most recent year for which data is available, according to the American Society for Training and Development. General Electric, for example, spends $1 billion annually on training and education programs for its employees, according to its website. To make the investment truly worth it, companies have to get employees to apply the lessons they've learn to their day-to-day work lives, says Professor David Bradford, director of the executive program in leadership at Stanford University.
Employees often take a class and "say, 'Gee, this is great,' and go back to their jobs and do the same old thing," Bradford says.
Google thinks it has found a way to make its learning stick. It's become more exacting about when it offers classes and to whom. It uses employee reviews of managers -- similar to the instructor reviews that college students fill out at the end of a semester -- to suggest courses to managers. Ever data-obsessed, Google uses statistics gathered from current and former employees to recommend certain courses to managers at different points in their career, say after a move to a new city or joining a new team.
All this has one purpose in mind: to keep the money machine cranking smoothly.
"People ask, 'Are you doing this just because you're nice?' What's important is that it aligns with our overall business strategy," says Karen May, Google's vice president of leadership and talent, who has led the revamping of GoogleEDU.
Fuzzy Khosrowshahi manages 100 employees on the Google Docs team in New York. He's learned firsthand how important management is to success at Google. Because Google engineers are allowed to switch product teams essentially at will, Khosrowshahi, 45 years old, must become a leader who can inspire direct reports to choose to work for his team.
"You really have this Google bazaar where I have to make sure my projects make people want to come to my team and not want to leave my team," he says.
Khosrowshahi has an easygoing, unpretentious personality that helped him win a Great Manager Award at Google, but he has his faults. The annual Googlegeist survey, a questionnaire that gauges employee opinions of their managers, showed that his team members thought they were working too hard.
So he created the "Docs Sabbatical" where employees are given two weeks each year when they can skip all meetings, log out of Google Mail instant messaging and work on whatever projects they see fit. Khosrowshahi calls it "4% time," a mini version of the company-wide policy that allows engineers to spend 20% of their work year on side projects.
Khosrowshahi has taken classes in negotiation, and "how to have tough conversations." The latter course taught him not to procrastinate about confronting an employee over poor performance because being "a good manager means that you care about the people in your group." He also took a widely offered class in public speaking, which he finds difficult. "I remember holding an apple on my head and pencil in my mouth and trying to talk and present," he says.
In 2011, Google hired 8,000 employees, the biggest annual headcount increase in its history. As part of revamping GoogleEDU, the company's people team (they don't call it human resources in Silicon Valley) also began thinking about how to better integrate the influx of new employees, made up of managers as well as rank-and-file staff.
Experienced managers who join Google from other companies can find it difficult to operate in a culture where power over subordinates is derived from one's ideas and powers of persuasion, not job titles, says May. Decisions on promotions and raises are often made by consensus among peers and superiors. An employee isn't necessarily going to obey a manager just because he or she is a manager. This is radically different from most traditional corporations, which have a top down, hierarchial style of management.
"There's a lot more persuasion involved because Googlers are really smart," says Scott Lederer, a former Google user experience designer who left the company in 2011. "They're not going to do something for you just because of your title. You really have to make your case."
That's why Google offers a special class designed for new managers and executives where they are taught how to exert influence in more subtle ways than threatening to fire someone, says May. "One of the practicalities of a less hierarchical company is that you aren't necessarily going to have the position power to decree something or dictate something," she says.
Just in Time Learning
In an effort to make its training and leadership development courses more effective, Google has begun offering specific classes based on an employee's work area (engineering versus sales) and career stage (junior developer versus senior manager). Such targeting makes these classes resonate with employees, say leadership development experts.
"One of the of the problems in leadership development is catching people at the right time... The more targeted it is the better, because it's specific and actionable," says John Baldoni, president of Baldoni Consulting LLC, a leadership coaching and development firm based in Ann Arbor, Mich. "The downside of leadership development is that it's too often amorphous and doesn't speak to people in the language that they need at a specific time."
Rather than train a new manager in how the Google performance evaluation process works as soon as they're hired, they'll instead receive the training just before performance reviews begin. If a manager is taking on a new team member who is transferring from a Google office in a different geography, he or she will receive an email reminding them that new employees have said it's helpful when managers introduce them to others in the office or review the team's goals with the new employee.
"More individualized, customized recommendations are part of how, as we grow, we're trying to individualize and personalize the learning experience here," May says.
Or a manager might receive an email from GoogleEDU recommending that they take a course that has been highly rated by Googlers who took the course while in a similar job. After managers receive feedback from peers and subordinates in a performance review, they'll also receive suggestions for classes based on that feedback. "The day that you get your results, you're motivated and you're more interested, so we want you to know that day what's available to you," says May.
Does it Work?
Google won't reveal its attrition rate or what impact the revamped GoogleEDU has had on retention or employee morale. What May will, say, though, is that "we do see in our overall satisfaction scores that it does make a difference when we invest in people."
The company's focus on learning has always been apparent to employees, some of whom say they were offered many more classes at Google than at any other company at which they've worked. Jason Morrow, who left Google in 2010, describes the GoogleEDU team as "very enthusiastic" and says that continuing education is "baked into the culture" of the company.
Even before the formation of GoogleEDU in 2010, Google would give exceptionally promising young product managers career and management coaches who would give lessons on how to negotiate better salaries, improve their presentation skills, or talk through the reasons why someone should or shouldn't leave to found a start-up, remembers one former employee who left the company in 2007. He says that such programs "engendered a lot of loyalty" among employees.
As Google builds out its formalized education program, the company hopes that it will continue to build bonds between it and its employees that will keep them there despite a multitude of opportunities at other tech firms. By developing managers and executives who can balance Google's culture of innovation with the laser-like focus it expects will be needed to remain a dominant company, Google is betting that making the company more like a university, not less, is the key to its long-term success.
"Find them, grow them, keep them is our mantra," says May. "We work really hard to get the right people, and we want them to reach their full potential."
Write to Joseph Walker at Joseph.Walker@dowjones.com