Growing Pains for Google

At the 10-year mark, the company struggles to balance youthful anarchy with practical process.

Now that Google Inc. has reached its 10-year mark, the company is facing the cultural complexities and challenges that come with the transition from hip start-up to corporate giant.

In Google's early days, it was able to take Silicon Valley by storm because it was a tiny company with a big idea. Unencumbered by the corporate bureaucracy of larger businesses like Microsoft Corp., Google was able to build grass-roots support around its search engine and online advertising business model to grow quickly and nimbly into the multibillion-dollar company it is today.

That kind of fast growth and megasuccess has a downside, however. The excitement of Google's game-changing technology and the almost collegiate culture that the founders fostered at corporate headquarters in Mountain View, Calif., made the company for many years the hot place to work. But in the past year, the image of Google's Silicon Valley nirvana has begun to show some cracks. Key members of its brain trust have left for other companies, and stories of employee dissatisfaction with the corporate culture are beginning to travel throughout the industry.

More Like Microsoft

As Google ages, one of its main challenges is to continue to foster technology innovation and draw the caliber of talent that start-ups can attract. This will be increasingly difficult as the company, in both size and culture, begins to look more like a Microsoft or an IBM -- behemoths over which Google once had an edge because it was different.

"Gravity affects all organizations and will inevitably affect Google," says Charles O'Reilly, the Frank E. Buck professor of management at Stanford University's Graduate School of Business.

The company is clearly feeling that downward pull. A little more than a year ago, Google began to experience the brain drain that comes when a start-up becomes an institution and many of its early stars cash out.

Key Googlers such as former CIO Doug Merrill and Sheryl Sandberg, former vice president of global online sales and operations, have left the company in the past year -- the latter for Facebook Inc., to which some other key Google employees have also defected.

Then there was the child-care fiasco that made Google's executives question the sense of entitlement the company had created among employees, and how long Google could sustain it. Things got hot at a TGIF meeting -- a weekly forum where Google's leaders present company news and answer employees' questions -- when workers expressed concern that the cost of company-provided child care was going to nearly double.

In response, according to published reports, Google co-founder and co-President Sergey Brin bristled about employees feeling a little too entitled to perks such as free bottled water and candy.

The meeting left some at the company thinking that their executives were beginning to feel the pressures of maintaining the culture they had created, insiders said privately.

Indeed, "the management challenges of running a 15,000-person organization are completely different from a 1,000-person firm," O'Reilly says. (Google has more than 20,000 employees worldwide now.)

People who have left the company recently say that they felt disposable and easily replaced. They also say that the long days and hard work -- part of a culture in which many employees feel frowned upon if they leave at a reasonable hour -- were not fully appreciated by their managers or Google executives.

To be fair, Google's woes aren't unique to the company. Many of them are the growing pains any start-up experiences when it expands as fast as Google has. And an atmosphere that has lured the best and the brightest with freebies and a laid-back vibe only complicates things.

Bailing Out

Cesar Mascaraque spent four years at the company as it transitioned from having 1,000 employees to thousands. He left early this year and is now European managing director at Ask.com.

Mascaraque says it was the expansion of the company that prompted him to leave. He prefers to work for a business as it transitions from start-up to growth company rather than working for a large corporation.

"Once the business is 20,000 people, I don't enjoy it," he says. "I like the day-to-day flexibility of being in a smaller company."

Mascaraque says he was part of a team that worked on developing the processes and policies that would help Google run its business as a corporation rather than as a small company. While a business must set such policies in order to grow successfully, "the downside is you take away a lot of the creativity and the flexibility that a smaller company has," he says.

"There's nothing wrong or right about it; that's the nature of the beast," Mascaraque adds.

Rob Kniaz, who was a product manager on Google's AdSense advertising platform team, cited a similar reason for leaving Google in July, after having been at the company for four years. He says he missed the camaraderie of the early days, when "you'd walk into the cafeteria and know more than 85% of the people."

As the company grew and the people he had worked with in the beginning became more geographically dispersed, it became "harder to keep that same level of excitement you had when it's you and your friends working late at night," Kniaz says. He is now a venture capitalist at Fidelity Ventures.

The Autonomy Angle

Google is aware of the challenges to its culture as it grows, and it is doing its best to meet them, says engineering director Craig Neville-Manning.

"As companies grow larger, it's more difficult to allow people to be creative," acknowledges Neville-Manning, who was hired in 2000 when Google had only about 200 employees.

The key, he says, is to "give people autonomy" even as the company adopts more of a corporate structure and culture.

Google tries to do this by allowing teams working on certain projects the same creative and development freedom they might have if they were still working for a start-up, he says.

Neville-Manning cites Google's recently released Chrome Web browser beta and the Android mobile platform as examples of these types of projects. Those teams have "a pretty clear mission and have been given more or less carte blanche" to do what they need to do to achieve that mission, he says.

There are downsides to this attempt to emulate the start-up culture. Some former Googlers say that this kind of autonomy left them feeling directionless. Although they appreciated the ability to create their own projects and duties for their appointed positions, it was difficult to gauge their performance without specific direction or feedback from managers, they say.

This experimental approach will remain in place at Google, however, and the company plans to continue to tweak its organizational structure as it grows, Neville-Manning says. This inevitably will require a lot of trial and error, he acknowledges.

"Since we are growing so quickly," says Neville-Manning, "we've had to sit back every six months and redesign processes as they've become too unwieldy."

For example, when he was given the task of opening the first Google engineering site in New York in April 2003, the company let the engineers at the new site figure out what they would work on; they simply communicated with other engineers to ensure that they weren't stepping on anyone's toes.

As the company grew, however, "we had to rethink this," Neville-Manning says. Eventually, Google had to set up a global database of projects that gave engineering teams a view of what all the other teams were working on.

"It's really important to leave people with some degree of autonomy," says Neville-Manning, "but at the same time, you don't want duplication of effort, and you want to make sure people are communicating effectively."

So Google continues to struggle through its adolescent transformation. "The question," says Stanford's O'Reilly, "is whether they will deal with this in a productive way or do something foolish."

Montalbano writes for the IDG News Service.

This version of the story originally appeared in Computerworld's print edition.

Copyright © 2008 IDG Communications, Inc.

  
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