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A Management Tip Sheet


Google has succeeded by writing its own rules. Here are some lessons that managers in other industries may be able to apply

MANAGE ABUNDANCE, NOT SCARCITY

Businesses like airlines and Broadway theaters profit from controlling the scarcity of their product. But the Internet kills scarcity. Google understands how to benefit from abundance. The more content for it to organize and the more sites where it can place ads, the better. Amazon has a similar approach, offering customers more books and CDs than could ever fit in one physical store.

MAKE MISTAKES WELL

Mistakes can be valuable, if you can learn from them. Google releases most products in "beta," meaning they're not quite finished. Then it incorporates feedback to come up with improvements. Procter & Gamble CEO A.G. Lafley says he wants to keep the company's rate of failure with new product launches at about 40% to 50%. He thinks it encourages employees to think ambitiously and take risks.

GIVE UP CONTROL

Companies need to give up control to outsiders to reap the benefits of their input. Google does this through beta launches and other user feedback. Dell tried a similar tack in 2007, after a flood of criticism over poor customer service. CEO Michael Dell launched a Web site to get customers' ideas, and Dell executives reached out online to bloggers. The openness led to a customer service overhaul; the negative buzz declined.

GET OUT OF THE WAY

Google doesn't tell people how to use its search engine or what to look for. It lets people take control of its technology. Craig Newmark, founder of Craigslist, has done similar things with his Web site. He lets people use the classifieds service in any way they can imagine. Many service providers—in telecom, cable, media, education—could do well to make something useful and then get out of the way.

LOW PRICES ARE GOOD (FREE IS BETTER)

Google doesn't charge people to use its search engine. In fact, the fastest-growing Net companies—from Google and Skype to Amazon and eBay—don't charge what the market will bear. They charge as little as they can bear. With networks of people, the more users you get, the stronger your competitive position. Scale can trump short-term profits.

DON'T BE EVIL

Google's most famous rule may seem the height of hubris. But founders Larry Page and Sergey Brin say the rule really exists to allow employees to challenge managers on decisions to make sure they are true to the company's mission. It provides a simple guiding principle for everyone. If only that rule had been etched over every door on Wall Street, perhaps the U.S. wouldn't be in the mess it's in now.

Jeff Jarvis, author of What Would Google Do? (Collins, January 2009), teaches at the City University of New York Graduate School of Journalism and blogs at Buzzmachine.com.

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