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Work Rules!: Insights from Inside Google That Will Transform How You Live and Lead Paperback – 2001
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- Operate on the belief that people are fundamentally good
- Use groups of peers or independent teams for: hiring, promotions, salary increases, awards, and firing (often excluding the direct manager)
- Managers exist to: (a) make tie-breaking decisions (b) coach/train to develop employees (c) care about people's well-being (d) set vision/strategy (e) provide technical advice (f) empower by clearing roadblocks
- Conduct 2x-per-year performance reviews on a 5-point scale and then calibrate (which are separate from continuous feedback); get 360 feedback on ‘do more of’ and ‘do differently’ 1x per year
- Make all goals (objectives and key results) public
- Design physical spaces to encourage interaction across departments
- Help employees meet the people they are helping
- Ensure transparency (in all matters unless unlawful)
- Only hire people who are better than you, who will be successful in the context of your organization, and who will make everyone around them more successful
- Referrals from existing employees are the best source of candidates
- Couple assessments of cognitive/problem-solving/learning ability, conscientiousness, and emergent leadership/fit with structured interviews that are job related: (a) Tell me about a time..? (b) What would you do if…? Note: 4 interviews are sufficient
- Eliminate status symbols
- Pay bonuses based on the median salary of all people in a job
- Have people who are the best at something train everyone else (share principles, role-play, discuss, review video of role-play)
- Make pay commensurate with contribution (following a power law rather than a normal distribution)
- Provide experiential rewards (as a complement to monetary awards)
- Celebrate accomplishment with public recognition
- Reward smart failure and make sure to conduct “what did we learn?” post-mortem sessions
- Provide nudges to influence, not dictate, choice
- Uphold the obligation to dissent (a McKinsey core value)
- Treasure the weird
- Put more wood behind fewer arrows
- Building a great culture requires constant experimentation and renewal
Various programs and processes:
- TGIF: weekly all company meeting to share updates plus 30 minutes of Q&A
- Dogfooding: Have employees test new products and provide feedback before piloting with customer
- Bureaucracy Busters: annual program to identify and fix biggest frustrations
- Upward Feedback Survey: 2x per year survey about manager quality
- 20 Percent time: time for people to engage in side-projects (often 120% time)
- Googlegeist: Annual survey focused heavily on innovation, execution, and retention
- Tech Advisor: network of experienced leaders offering confidential, one-on-one office hours
- Random Lunches: set people up with others they don’t yet know
- Tech Talks: Employees sharing work (and non-work) expertise
- Talks at Google: Outsider (ex: authors, business leaders, entertainers, etc.) sharing their wisdom
A key point made immediately - Google managers cannot unilaterally decide whom to hir or fire, how someone's performance is rated or rewarded, when software code is of sufficient quality to be incorporated into working systems, final product design and/or launch date, or who is promoted. Instead, each of those decisions is made by a group of peers, a committee, or a dedicated and independent team. Outcomes are thus calibrated across groups, and managers instead focus on clearing roadblocks and inspiring their teams. Google contends that giving non-managerial individuals and teams decision-making authority, providing learning opportunity outside what is needed to do one's job, and increasing reliance on teams works best. (See Kamal Birdi for related academic research.)
Block tells readers that Google relies on three cornerstones in its H.R. practices. The first is its Mission Statement - cornerstone of its culture, intended to convey a mission that matters, a moral rather than business goal. Why? Nothing is a more powerful motivator than knowing you are making a difference in the world. The second is transparency. Weekly, Larry and Sergey host the entire company (live and Internet video) for updates from the prior week, product demonstrations, welcoming new hires, and fielding 30-minutes of questions from anyone on any topic. (Staffers submit questions, discuss, and vote on their priority - 'Hangout On Air Q&A' is the software utilized for this; also utilized by Obama to handle and prioritize questions from audience members when he speaks.) Transparency is valued because it promotes information-sharing, encourages improvement (eg. New York's posting CABG mortality rates for each hospital brought an overall death rate reduction of 41%). Bridgewater Associates (world's largest hedge fund) goes further - recording every meeting and making the available to employees - shows how decisions are made, encourages more precise thinking and communications, reduces politicking/backstabbing, stops the 'I never said that.' Complaints about someone within an email are forwarded to that individual. The third is employee voice. Google has an annual Bureaucracy Busters program where staffers identify their greatest frustrations, vote on them, and initiate actions.
Bock believes that most assessments of potential hies occurs in the first 3 - 5 minutes, if not sooner. Further, most interviews are subconsciously biased towards people like the interviewer. Finally, most interview techniques are worthless. (These assertions are backed by research cited in the end-notes.) In addition, other research has concluded that about 90% of training doesn't bring sustained performance improvement or behavior change. Thus, Google spends considerably more on recruiting than the average firm, with less emphasis on training.
Even the best-intentioned managers compromise their standards as searches drag on.
Side Notes: 1)As late as 2010, most new Googlers took significant salary cuts when joining - some as much as 50% or more. Hints at the value of adding Google to one's resume. 2)Google now prefers to take a bright, hardworking student who graduated at the top of his class at a state school over an average or above-average Ivy League graduate. It also looks for humility and conscientiousness. Google only hires about 0.25% of those considered. 3)As of 2008, Google continuously crawls the Web and reprocesses its findings several times/day.
Continuing, Bock states that only 10% of an organization's applicants (at best) will be top performers - this creates a need for more interviews. Moreover, most top performers aren't currently looking for work. Two teams of senior leaders (one for product management and engineering roles, another for sales, finance, and all else), plus a final reviewer (Larry Page) enforce Google's high hiring standards. A major rationale - this avoids declining standards over time, as well as hiring preference for friends. 3)Google no longer uses case interviews and brainteasers - researchers have found them useless.
Google analyses have found that academic performance didn't predict job performance beyond the first 2 - 3 years after college, so they've stopped requiring grades and transcripts - except from recent graduates. At one point, over half of new hires came from employee referrals, and then dropped off. The reason - they'd exhausted their networks. Google helps boost recollection by having events at which staffers go through their Facebook, LinkedIn, etc. networks, with H.R. individuals standing by. Another reason - Google was taking too long to contact those referred and not providing feedback to the referrer. That too has changed - an initial call is made within 48 hours and the referring Googler is given weekly updates. Since so many of the best potential applicants don't apply, Google has developed an in-house recruiting staff (using 'gHire') that now brings in over half of its new hires. It stopped using job boards (eg. Monster.com) in 2012.
Researchers Schmidt/Hunter in published (1998) a meta-analysis of 85 years of research on how well assessments predict performance. Unstructured job interviews 'explained' 14% of performance variation, reference checks - 7%, experience (3%). Work-sample tests (29%) were best (Google uses); general cognitive ability (26%), when combined with assessment of conscientiousness brought the level to 36%.
Google now uses 'qDroid' - one chooses the attributes they want to test for and supply the job needing to be filled - the system provides questions appropriate for the interview. Bock also commends the sample questions available on the U.S. Dept. of V.A. website.
In 2007, Google started looking for themes across the 10,000 or so individuals it had hired, and the millions it had not hired. Four predictive attributes were identified - 1)General Cognitive Ability, 2)(Emergent) Leadership, 3)'Googleyness' - enjoying fun, having humility, conscientiousness, comfortable with ambiguity, and 4)Role-Related Knowledge. The latter was least important, and Bock sort of waffles around about it. Google now requires all interview feedback to comment on each attribute. Subsequent reviewers may disagree with the conclusions reached by those previously involved, and the system rates interviewers on their longer-term accuracy.
Google became infamous for its long, drawn-out hiring and interview processes. Analysis found that four interviews were enough (provided 86% confidence), and that each additional interview beyond those four only added another 1% confidence in the decisions made. Acting upon this information has cut the median hire time to 47 days, down from 90 - 180. The process begins with resume screening by someone familiar with all Google jobs (Bock omitted the initial computer screening and key words/phrases utilized), a phone or Google+ 'Hangout' interview to assess general cognitive ability, then in-person interviews with hiring manager, peers, subordinates, and a cross-functional representative, followed by summarization of the formal structured prior interviews, along with 'backdoor references' (eg. information from current Googlers who knew the individual before, perhaps in college), an interview with a senior leader, then the CEO. The average Googler spent 1.5 hours each week on hiring in 2013.
Google tries to reduce 'distance' between layers - no executive dining rooms, parking spots, or pensions. Decision-making is based on data, as much as possible. ('Don't politic, use data.') H.R. practices are tested via surveys, test data, and sometimes double-blind experiments. Rejected candidates are sometimes hied to see how they perform. Purported biases are taken seriously and checked out via data - do those reporting to upper managers get more promotions and better ratings, what about those on the more important projects? (Analyses were conducted and the results posted. When the analyses uncover or bear out a problem, Google tries changes.) Engineers are allowed to spend 20% of their time on non-work-related projects (presumably related somehow to bettering Google - some projects have to do with H.R. changes), and a sizable proportion do so.
Sidebar: Bock states that part of the reason women are paid less than men is that they negotiate less - he backs this up with data. Google disseminates this finding to staffers in an effort to encourage them to be more assertive in requesting raises and promotions.
All supervisors receive structured feedback from their subordinates; those with 100 or more subordinates have summaries of that feedback posted for all to see. (These results are not factored into their performance ratings or pay decisions.) Google also regularly uses five questions that predict whether employees are likely to quit - action is triggered if favorable responses fall below 70%.
Google board member John Doerr introduced Intel's goal-setting practices (Objectives and Key Results - OKR) to Google in the early 2000s. Results must be specific, measurable, and verifiable. (Bock suggests having both quality and efficiency measures, and cites Edwin Locke and Gary Latham as guiding authorities.) The firm deliberately sets ambitious goals, believing that if they achieve all of them, the goals are not aggressive enough. ('If you set a crazy, ambitious goal and miss it, you'll still achieve something remarkable' - Larry Page) Larry sets OKRs for Google at the start of each quarter. Everyone's OKRs are visible on Google's internal website. Since research has shown that hours spent cascading goals up and down a firm doesn't improve performance, and those grossly out of alignment are quickly obvious, Google spends little time on that.
Google stopped doing quarterly ratings in 2013 (now every six months) and went to a 5 point scale (from 41). Managers assign a draft rating to each of their employees and then sit with about 5 other managers and review the outcomes to help standardize/calibrate them. This is seen as reducing the incentive/pressure to inflate ratings, and improving fairness. Prior to beginning the sessions (last about 3 hours), the group reviews the seven types of likely bias (eg. recency, central tendency). Not every individual is discussed, but they do look at the various ratings distributions.
Google separates the 'how you did' conversation from the 'how to do better' discussion by about a month. Managers are assisted in this by Google-provided guides.
Google believes that some individuals in technical jobs are worth far more than others at the same level - even after accounting for differences in project impact. Bock cites Bill Gates: 'A great writer of software code is worth 10,000 the price of an average software writer.' (When I wrote software the generally-accepted figure was a much more modest 20X - still quite impressive.) Unfortunately, this runs afoul of typical rewards systems. Google tries to account for these differences with varying stock grants, though these are infrequent (usually generate resentment); public recognition and less dramatic rewards (eg. trip to Hawaii) are more frequent.
Typical reward systems assume a normal-curve distribution of talent/contributions. Bock contends a 'power' (exponential) curve is more appropriate - if for no other reason than the fact that the worst performers don't get hired or, are fired if they were hired. He then documents that power-curve distribution of talent in a number of areas (academic publishing, professional sports, musicians, etc.) using data from O'Boyle/Aguinis and their study of 633,263 individuals. (Also why median incomes in the U.S. almost invariably are lower than mean incomes.) Those falling in the bottom 5% at Google are provided training, sometimes given a new position (usually they rise to average), or fired. The range of rewards within a level at Google can easily vary 300 - 500%; a consequence is that average performance is rewarded with less than average compensation. As for failures - they too are rewarded if seen as thoughtful and well-attempted.
Bock/Google are relatively dismissive of training - Bock references research concluding that most is a waste, primarily because of a lack of evaluation. Google tries to use fellow-workers as trainers (more credible and knowledgeable) and to assess behavior/practice/performance changes that result.
Bock ends by reporting that while Google does offer an excellent menu of benefits, many are free are very low cost to the company. Examples include allowing onsite provision of services for employees that help simplify their busy lives - cleaning, bicycle repair, etc. Employees pay for the services, though sometimes Google is also able to negotiate lower rates.
Overall - an excellent description of how Google recruits, retains, and motivates its staff.