Google's CFO
I have seen a lot of bureaucracy in large companies. And I have seen people getting immensely frustrated by it. Billions of dollars have been spent on consultants in order to imbibe a "small company entrepreneurial" spirit in employees of large corporations.
It is extremely difficult to do so because the dynamics in the two kinds of organizations are so different. In large, well-established corporations, everything revolves around the share price, budget and demonstrated benefits. There is no incentive for speed, innovation and radicalism.
In small start-ups, outrageous thinking and fantastic leaps of faith are de rigeur. People are in start ups because they believe in an idea, an abstraction of what it could become.
The ideal situation, of course is to create an organization that is large and profitable with a good amount of systems/logic/processes without losing the ability to innovate and do crazy things.
This is difficult. And very few organizations have pulled it off. Some that come to mind are Virgin, Whole Foods and Apple.
For most startups though, the transition to being a larger, more responsible organization is fraught with growing pains and identity crises.
Take Google for example. A spectacular success, the most successful IPO (ever ?), no serious competition in sight, endless cash, a young, dynamic workforce.
Take Microsoft - A 50 Billion Dollar company where innovation is no longer the number one priority. The bottomline is. There is no excitement at Microsoft anymore. It's all grown up now. But it performs very well, delivers consistent results, employs a lot of people.
Will Google become like Microsoft in its organizational set-up ? They are resisting that with all of their might.
An example - Recently, Google invited several top Wall Street analysts to a meeting with their CFO. The analysts assumed that the company was going to give them some results guidance, as is the common case. However, they were shocked to see that their meeting was with the Chief Food Officer, and not the Chief Financial Officer. The meeting started with descriptions of Google's menus, their chefs etc ...
By no means am I a fan of the bloated egos on Wall St, and I believe that bringing them down a notch would do them a world of good - But a Chief Food Officer prank !! Thats just suicide.
5 years down the line, Google will inevitably lose out on its ability to innovate. And share price and Wall St analysts are going to be more important. I truly hope that this was just a one-off deal - Google cant be a geek kid forever :-)
It is extremely difficult to do so because the dynamics in the two kinds of organizations are so different. In large, well-established corporations, everything revolves around the share price, budget and demonstrated benefits. There is no incentive for speed, innovation and radicalism.
In small start-ups, outrageous thinking and fantastic leaps of faith are de rigeur. People are in start ups because they believe in an idea, an abstraction of what it could become.
The ideal situation, of course is to create an organization that is large and profitable with a good amount of systems/logic/processes without losing the ability to innovate and do crazy things.
This is difficult. And very few organizations have pulled it off. Some that come to mind are Virgin, Whole Foods and Apple.
For most startups though, the transition to being a larger, more responsible organization is fraught with growing pains and identity crises.
Take Google for example. A spectacular success, the most successful IPO (ever ?), no serious competition in sight, endless cash, a young, dynamic workforce.
Take Microsoft - A 50 Billion Dollar company where innovation is no longer the number one priority. The bottomline is. There is no excitement at Microsoft anymore. It's all grown up now. But it performs very well, delivers consistent results, employs a lot of people.
Will Google become like Microsoft in its organizational set-up ? They are resisting that with all of their might.
An example - Recently, Google invited several top Wall Street analysts to a meeting with their CFO. The analysts assumed that the company was going to give them some results guidance, as is the common case. However, they were shocked to see that their meeting was with the Chief Food Officer, and not the Chief Financial Officer. The meeting started with descriptions of Google's menus, their chefs etc ...
By no means am I a fan of the bloated egos on Wall St, and I believe that bringing them down a notch would do them a world of good - But a Chief Food Officer prank !! Thats just suicide.
5 years down the line, Google will inevitably lose out on its ability to innovate. And share price and Wall St analysts are going to be more important. I truly hope that this was just a one-off deal - Google cant be a geek kid forever :-)
Comments
Anyways - lets see if I can get all the spirit of the earlier comment into this new piece.
Google is being managed very well. The 2 founders have strived hard and succeeded in keeping that entrepreneurial spirit till now. They come up with innovative strategies for the same .. one of them being the personal innovative time -- or whatever, each developer gets. Google shares continue to rise because of 2 things -
1. because google has a distinctive aura around it.
2. because google consistently beats analyst expectations for earnings.
I doubt whether google is stagnating. Also, I wouldnt read much into the CFO thing.
I absolutely agree with you that Google isnt stagnating - In fact, they are at a point where it almost seems that they can do no wrong ! - They seem to make money in whatever they choose to do.
But, its inevitable that this situation changes and some other company takes over leadership in innovation.
I don't agree that the "innovative time" is actually a unique thing. As opposed to using 100% of your time on projects you love, Google gives you only about 20% time to do that!
Of course, that is a different way of looking at things ;)