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Lets read that bombshell of a post again by the departing CEO of Google, Eric Schmidt. He says “We (Larry, Sergey and Eric) have also agreed to clarify our individual roles so there’s clear responsibility and accountability at the top of the company”. I am bewildered that in 10 years of what Eric calls ‘working exceptionally closely together’ it took a 2010 holiday season for him to realize the lack of efficiency in decision making at the helm of affairs of one of the colossal enterprises of our times.
While at Google, I have had numerous opportunities to listen to Eric over VC, and though I have never thought of him as an exceptional leader, I always believed in his analytical and perceptive skills.
Lets face it, he is seasoned and accomplished, and if it was a governance issue he would have figured it out years ago. So its clear that this is clearly a fissure in the so called ‘triumvirate’ at Google, a possible crack that deepened after the China exit. As I look back and then forward, there are some points I ponder upon.
• Enterprise: The disproportionate dependency in ad revenues is a problem Google grappled with over years with no solution even in the latest Q4 earnings where it is still at 97%. The only ‘Other revenues’ listed in the income statement is from Google Enterprise Apps, a space which brought in a meagre, but critical, $1.1 Billion of the total of $28 Billion yearly revenue. Schmidt is a veteran of this game having extensive experience while heading companies like Novell. It is extremely critical for Google to escape the clump that it created for itself. Furthermore, with marketers shifting their focus to Social, than search we will see the core revenue channel thinning.
• Social: The burning, bitter pain point for Google which in a matter of months changed the dynamics of the digital space is still a losing battle for Google. Many of Google’s attempts at creating social ecosystems failed miserably and Google fell flat on its face. Orkut – bombed in India, Google Buzz – dumped worldwide, Google Wave – defunct, Google Me – a rip off of Facebook, still in the womb. Search is fast moving from algorithmic page rank to social graphs based on experience and word-of-mouth. This continued failure could well have been a prompt for the change of leadership. Their latest Google offers (Which got leaked on the 20th of Jan is another sign of lack of innovation and an easy replica of Groupon)
• Leadership: Now a look at the future. Page takes on April the 4th. From folks who have interviewed Page, he is observed to come across as an extremely private, shy and elusive personality who is not a comfortable public speaker. He reportedly thinks of interviews & meetings as not the best investments. Now that’s exactly the opposite of the kind of person Google needs. Google is a vibrant brand, it needs a dazzling, colourful, bombastic, charismatic, flamboyant leader who is outspoken and articulate.
That brings my mind to the 4th ace at Google – Nikesh Arora, the Senior Vice President and Chief Business Officer who grew swiftly through the ranks largely due to some stupendous success in the EMEA region which he managed previously. I have had the opportunity to meet with him and listen to him speak and I know that when he speaks Googlers listen.
• Internal Culture: Google fosters a culture which they describe as ‘managed chaos’. It is credited with bringing start-up culture into the mainstream. On one side it wants to superficially maintain this culture internally (With its own shadows) and on the flipside it has its face pressed against the window to perform and keep shareholders satiated.
So managed chaos? No! Its more chaos than managed! A highly inefficient setup combined with bloated up egos from academically top notch (But practically very often disastrous!) workforce is what best describes this ‘chaos’. Almost steadily, every new release and internal communication gets leaked to the press by employees themselves in a matter of minutes indicating poor integrity. The Google offers communication (mentioned above) got leaked to Mashable (on 20th Jan) in a matter of minutes straight from the Google Headquarters (Googleplex) including a presentation marked ‘Confidential’! Google as a company needs to introspect deeply about its internal culture and take corrective steps.
The bottom line is that this rift has happened at a time when Google’s going is smooth financially but the impending threats are fatal. When Larry takes over in April, I sincerely hope he has these points taken care of so that billions around the world can scream vociferously ‘I’m feelin lucky’ about the company which changed the way we live.
Written by Arun Varma
Arun is a digital marketing professional who previously worked with Google in India before seeing snow for the first time as a current MBA student at HULT International Business School in Cambridge. He also is a business quiz enthusiast and has hosted and conceptualized several of them.