is better than big serves its strategic aims and will continue to drive the success of the company for the foreseeable future.
There’s good logic behind that mindset. Google creates products that are highly valued by users and customers, but those products can also be duplicated by rivals and new upstarts. So Google works to sustain product excellence through constant improvement and innovation as a way of fending off the competition. In other words, the same product can’t be produced in the same way over and over again at scale and still be successful. Note that Google relies very little on marketing or advertising to make its case with customers and users. It lets the product speak for itself.
Google encourages people to come up with ideas, innovations, and improvements beyond the task at hand because it believes those unplanned outcomes could potentially be bigger and more profitable than anything Google is devoted to doing currently.
Google also understands, better than most companies, that markets can change overnight. Accordingly, it maintains a looseness around assigned responsibilities that allows employees to do work beyond their job description. Instead of forcing people to keep their heads down and “stick to their knitting,” Google encourages people to come up with ideas, innovations, and improvements beyond the task at hand because it believes those unplanned outcomes could potentially be bigger and more profitable than anything Google is devoted to doing currently.
Fundamentally, this mindset is rooted in a profound understanding of the modern dynamics of markets, of what organizations are capable of doing well versus what they don’t do well, and of how employees are best motivated and empowered to contribute to organizational goals. Google’s founders, Page and Brin, did not come from management or business backgrounds and they saw this as a virtue, not a defect. As creative engineers themselves, they knew what conditions fostered good work from such people. In fact, they looked to academia and the college campus, of all things, as ideal models for the type of organizational looseness they wanted to instill in Google. They believed that Google would only thrive and grow if they were able to “hire as many talented software engineers as possible and give them freedom.”3 So they set out to make Google an attractive center for world-class thinkers who then had the time and space to collaborate in an appealing environment, where interactions could occur frequently and in unplanned ways.
To make this possible, they believed it necessary to “reinvent the rules of management”4 and remove the barriers of hierarchy, budgeting, and industrial-era management and oversight. They were contemptuous of formal planning because they believed it does not promote high-quality outcomes but a kind of stubborn, institutional adherence to an inflexible path. They also abhorred the status that gives workers with seniority and tenure more say than others. In their new hires, Google looked for people who were smarter and more capable than current employees and leaders. Anyone could win an argument as long as the reasoning was persuasive. Management levels were flattened. Top executives were never pandered to, and did not get the distinctively better office with the great view. Instead, space was used in a pragmatic way according to the needs of various projects or teams. Meetings were kept small, spontaneous, and fun. Leaders made as few decisions and exercised as little power as possible. Information was allowed to be free-flowing rather than restricted and directed up the food chain.
Brin and Page wanted a culture of Yes at Google, and they disrupted any force within the company inclined to say No. For example, many of us in corporate America have experienced disappointment when bold ideas and inspiring plans get thwarted, watered down, or made pointless by another division or level of management within the organization. The guiltiest department is typically legal, with finance trailing in a close second. Google saw the typical legal department as too risk-averse and negative to fit within the Google culture, so it hired lawyers who were willing to be creative contributors on business and product teams rather than gatekeepers blocking great ideas.5
The results have been extraordinary. Google has experienced unprecedented growth in a short time. But that growth arc does not resemble the slow and methodical approach of traditional companies. Rather Google is able to embrace a “grow big fast” strategy by identifying and seizing opportunities quickly, mobilizing with agility to take advantage, and achieving scale rapidly. This approach to innovation and growth occurs in an atmosphere characterized by a certain degree of chaos, disorganization, and spontaneity—a complaint or criticism that Schmidt and Rosenberg respond to by quoting race-car driver Mario Andretti: “If everything seems under control, you’re just not going fast enough.”6
MINDSET #2: POSSIBILITY OVER PROFITABILITY
“As a private company,” Brin and Page continued in their founders’ letter, “we have concentrated on the long term, and this has served us well. As a public company, we will do the same. In our opinion, outside pressures too often tempt companies to sacrifice long-term opportunities to meet quarterly and market expectations . . . If opportunities arise that might cause us to sacrifice short term results but are in the best long term interest of our shareholders, we will take those opportunities. We will have the fortitude to do this. We would request that our shareholders take the long term view.”
I’d like to think the world is full of CEOs who wish they could act this way, if only Wall Street would let them. But part of me fears that, by the time they’ve scaled the heights of a Fortune 500 organization to become CEO, the pressure to meet quarterly expectations has already thoroughly beaten this spirit out of them. Perhaps that’s why new-economy startup founders, with a touch of naïveté in their tone and bolstered with capital from eager investors, are still plucky enough to think that they will be rewarded and not crushed when they voice such a possibility-over-profitability mindset out loud.
There’s a lingering suspicion about such an attitude. It’s probably inherent in any skeptic from Wall Street or from the managerial profession, but it was certainly exacerbated by the excess idealism of the dot-com boom. Remember when Pets.com was said to be worth more than something like GE and GM combined? Despite generating no revenues, having few customers, and offering little more than an idea, pioneering e-commerce companies were valued many multiples over traditional product and manufacturing companies. No one could really explain why—except to point to the vast untapped potential such companies represented. But no one looked too closely below the surface, either, to see if a viable company existed beneath the hype.
A sickening stock-market collapse provided a correction to such thinking but obscured an important point as a result. The pursuit of possibility over profitability provides distinct advantages when it comes to building an enduring and successful enterprise today. This mindset is key to the focused culture of organizations that are now clearly outpacing traditional companies in terms of real growth.
It is not to say that new-era companies abhor profits. They believe in profitability. But they do not pander to the common shareholder mindset of eking all possible gains in the short term at the expense of long-term growth while in the process short-changing and alienating customers. Instead, companies that believe in possibility over profitability trust that if they make customers extremely happy—indeed, if they exceed their expectations, and not just please them but delight them—this will result in far greater returns in the long run. Accordingly, instead of disbursing short-term profits to shareholders, they reinvest in their own business to foster the incremental and disruptive innovations that will tighten the bond with customers for the long haul. As Mark Zuckerberg wrote in his own founder’s letter: “We don’t build services to make money; we make money to build better services.”7
Companies that believe in possibility over profitability trust that if they make customers extremely happy—indeed, if they exceed their expectations, and not just please them but delight them—this will result in far greater returns in the long run.
Amazon is another powerful example of this mindset. Founder and CEO Jeff Bezos is known as the Prophet of No Profits for his obsessive
