How Google Manages Its PeopleTuesday 18 August 2015
The New York Times article criticising e-commerce giant Amazon’s alleged mishandling of its employees in a “bruising workplace” has once again brought people management into focus at the world’s leading corporations.
Conversely, recent research has commended fellow tech behemoth Google on its range of employee initiatives that have led to a 37% rise in staff satisfaction, but how can small and medium-sized businesses follow in Google’s path?
As discussed earlier this month by Insights, Google is one of the leading proponents of the Objective and Key Results system of employee review. Commonly referred to as OKRs, the process asks employees to set their own measurable goals and make them public to colleagues via an internal network. In practice, an employee will set an objective, such as aiming to increase website engagement by 20%, then identify three or four key results that are quantifiable and help individuals hit their target.
Google claims the process is a much more adaptable and realistic method of evaluating employee performance and showing where they need to improve, rather than the traditional bell curve appraisal that ranks employee performance as low, medium or high.
Small business analytics company Swipely are one of many smaller companies to have effectively introduced OKRs to their business. Despite the firm’s implementation of the OKR system differing slightly from Google’s, chief executive Angus Davis argues that its key tenets have proved vital in developing its growing workforce.
“Key results are not general or subjective actions you plan to take,” Davis explained. “They should always include numbers to make it clear how much has been achieved. For example, if Mary’s objective is to improve her sales prospecting skills, one key result might be to spend two hours a week shadowing Jennifer, the team member who demonstrates the most prospecting success.
“This consistency turns goal-setting into a habit and changes how people think about their work and approach their everyday to-dos. It puts in place natural milestones that make you think about what you need to do next and aim high.”
He added: “Most people wouldn’t consider 70% to be a good grade, but for OKRs that’s just about perfect. You want your objectives to be ambitious enough to push you beyond your limits. When everyone does this, it forces the tough conversations about what's truly needed to beat expectations.”
Leadership That Empowers Staff
Bosses considering adopting the OKR system must also evaluate how Google’s method of using the process in a collaborative way between line managers and personnel would translate into their business. Google requires each employee to devise his/her targets with their manager and dictates that there is no top-down dictation.
This requires a good manager, and the corporation specifically seeks to recruit and develop leaders who are clear, consistent and fair when making decisions – even to the point where they may be considered somewhat predictable.
Google argues that consistent leadership from managers actually provides a secure working environment for staff to express themselves, as they know that, within certain parameters, they can do whatever they want.
And for a company that has changed rapidly since its establishment in 1998, most recently folding itself into a new conglomerate called Alphabet incorporating its different businesses from health through energy to transport, its reliable and dependable management principles provide a recognisable and unifying basis for staff to innovate and contribute consistently to the corporation’s growth.
According to Laszlo Bock, Google’s innovative senior vice-president for human resources, the teams working under the best managers perform better, are happier, and stay longer with the company.
Based on data analytics, the executive identified the eight key qualities of such managers (listed in the order of importance):
- Be a good coach
- Empower your team and don’t micromanage
- Express interest in your team members’ success and well-being
- Be productive and results-oriented
- Be a good communicator and listen to your team
- Help your employees with career development
- Have a clear vision and strategy for the team
- Have technical skills so you can advise the team
70-20-10 Work Split
Independence is clearly an on-running theme throughout Google’s working philosophy, possibly stemming from its founder’s Larry Page and Sergey Brin’s research background as PhD students at Stanford University, before leaving their studies to concentrate solely on the search engine-turned-conglomerate.
One of its most famous management policies is to give staff the freedom to spend up 20% of their work time on off-budget projects related to the core-business, and 10% to pursue ideas based on one’s own interest and competencies.
Through this policy of intrapreneurship, Google encourages employees to implement their own ideas within the company, and stamp their own unique print on the firm’s operations. With Google providing numerous perks, including office space and software, to support entrepreneurial staff, the ‘free time’ policy has been useful in retaining key staff and developing an estimated half of Google’s new products.
In an interview with MIT technology Review, Google executive Jonathan Rosenberg argues that the “free time” policy is equally applicable to smaller companies with much slimmer profit margins and tighter budgets.
Suggesting that bosses at now extinct video retailer Blockbuster could have survived if it had sought innovation from within, Rosenberg said: “Most companies think that the set of stuff that needs to be done is much more onerous than it really is today, and that’s because they’re not thinking in terms of information, reach, and computing power. They’re thinking in terms of the inputs that go into the old 20th-century manufacturing world.
“If you look at software today, much software is built on open standards. We have much more powerful APIs. It’s very easy to do things, like the guys at Waze did or the guys at Uber did, to put information together and accomplish something very significant with a very small number of people.”
It Starts With Recruitment
In a different approach to large companies in other sectors, Google’s people management starts from its hiring process. The OKR system, leader-managers and “free time” principle all rely on having high quality committed staff who are able to manage their own time and responsibilities effectively.
Mathew J. Manimala, professor of organization behaviour at the Indian Institute of Management, said Google have a policy of recruiting only class-A employees who have all the qualities to do their job well, uplift their colleagues and drive the company forward.
In return, the search giant, communicates its vision and gives staff the freedom to implement it, while also attempting to strip away everything that gets in the employees’ way with a hassle-free working environment laced with benefits – from dry cleaning services to leather seats.
So while your company might not have the global reach or financial muscle of Google, there is nothing to say you can’t follow in its path and reinvent the way you manage your people.
Need any more evidence your people management could need a refresh? Google it.