Companies & Industries

Google: A Druckerian Ideal?

Sergey Brin and Larry Page may never have read The New Society, but the corporate culture they've created is quite close to its author's vision

Google (GOOG) turned out quite a dazzling display of data recently when it released its third-quarter results: Profit jumped 46%. Revenue soared 57%. The company's shares shot up $6.14, to more than $639 each, on the news. But it's another set of figures that most impresses me: 17, $0, and 20%.

These refer, respectively, to the number of cafés at Google's Mountain View (Calif.) campus; what it charges employees for all the meals and snacks eaten there; and the amount of time it encourages its engineers to carve out each week to tackle company-related projects that interest them personally but aren't part of their core assignments.

More than any enterprise I know of, Google has built a working environment that can only be described as Druckerian—early Druckerian, to be precise.

Beginning with some of his first major writings in the 1940s, Peter Drucker wanted "work to reflect social values like opportunity, community, solidarity, and individual fulfillment, not just business values like cost and efficiency," explained the late management philosopher's biographer, Jack Beatty.

Of course, plenty of companies (as well as other types of organizations) espouse these tenets, and many observe them to varying degrees.

The difference is that Google applies them to the fullest, and not simply through its much-vaunted list of perks, which includes—in addition to free gourmet food and the encouragement to dream—on-site haircuts and oil changes (which aren't gratis); medical checkups; subsidized exercise classes; film series and lectures; gatherings for all sorts of hobbyists; shuttle-bus service throughout the Bay Area; parties and family events; weekly TGIF "town halls" and schmooze-fests where top executives Larry Page, Sergey Brin, and Eric Schmidt are regularly present; and hefty cash rewards for referring someone to work for the company or when buying a hybrid car.

A Self-Governing "Village"

Indeed, more than any one of these things, it's the overall atmosphere that the Internet company has cultivated—Google's gestalt—that puts it in step with Drucker's early belief that "the corporation is not only an economic tool but a social institution."

More specifically, his industrial-age vision called for the establishment of a "plant community" in which line workers would govern many of their own affairs and, in doing so, reap rewards that went well beyond their paychecks. Drucker, in his 1949 book The New Society, wrote of workers' demand "for good and close group relationships with their fellow workers, for good relations with their supervisors, for advancement, and above all, for recognition as human beings, for social and prestige satisfactions, for status and functions."

At Google, there is no "plant" per se. But employees use language strikingly similar to Drucker's when describing their high-tech home. "It's like a village," says Dan Ratner, a mechanical engineer who joined the company about two years ago.

The lunches and dinners served at Café Pintxo, a tapas joint, the pan-Asian Pacific Café, and any of the other eateries around Googleplex (as headquarters is known) are supposed to be pretty terrific. But what most whets Ratner's appetite is the camaraderie and brainstorming that occur between bites.

It is not uncommon, he says, for a mealtime conversation to develop into a serious collaboration, often involving fellow employees he may never have met before. Once that happens, Ratner is likely to be off and running, using his 20% time to zip to Home Depot (HD) (where he can charge Google, without managerial approval, for basic supplies), build a prototype of his idea with some of his colleagues, and begin measuring its effectiveness.

A Dividend-Yielding Culture

The best innovations find their way in front of a supervisor and, if they make the cut, can ultimately win formal project status and funding. The ones that aren't so hot fade away—usually very quickly. "It's a real competitive place," Ratner says. "It's not all touchy-feely."

Google won't disclose what it spends on its myriad employee benefits, and a spokeswoman says that, in spite of the company's computational prowess, it can't quantify their effect on productivity. Clearly, however, the culture yields dividends. Among the projects that have emerged from 20% time are Gmail, Google News, and the Sky feature on Google Earth.

For Ratner, though, even the ideas that flame out have a tremendous value. The mere act of pursuing them, he says, speaks to "the entrepreneur, the artist" that tends to reside in many of Google's 15,000-plus employees. It fulfills the "need in every human to create," he adds.

What If the Going Gets Tough?

It must be noted that all of these offerings are relatively easy to provide when almost everything seems to be going without a glitch and the financial picture is so bright. Should Google's swagger give way to a big enough stumble—as has happened with countless other firms that once seemed invincible—its commitment in all these areas will surely be tested.

Over time, Drucker himself gave up on the notion of a "plant community," convinced, sadly, that most companies were consumed with the bottom line and little else. It also became more difficult to promote the corporate-community paradigm with job security in the U.S. and elsewhere growing ever more elusive. By the late 1980s, he had begun to look toward the nonprofit sector as the one that "gives people a sense of community, gives purpose, gives direction."

Perhaps he abandoned the model of workplace-as-social-institution too soon. Then again, who could have guessed that the world's most forward-thinking company in 2007 would have so boldly adopted a concept that Drucker framed more than half a century ago?

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