How Google can generate 8,5 billion of dollars of profit in 2010 by offering free services ?
What corporate culture enables Google to be an innovative company that cultivates its differences?
What kind of products Google should focus on and why?
Jean-Marc Tassetto, Director of Google France invited by INSEAD, presents the specificities of Google: the user is the major concern! « Users first, brand second » – Fred Wilson
Product Managers sum up in few points the management specificities that makes Google successful.
Created in 1998, Google generates a turnover of 29,3 billion dollars in 2010 and employs 25 000 people including 14 000 engineers.
- « Focus on user and all else will follow » is Eric Schmitt, executive director of Google, philosophy and taken up by Larry Page the co-founder and actual CEO of Google.
- Users and applications are at the major concern of the 14 000 engineers : this is Google’s specificity.
- Engineers focus on the user-friendliness: simplicity and fastness, before filling in intern goals or expected results.
Google’s business : building platforms
Each developped product answers to a specific user need. The evolution of users’ behaviors leads to new services.
- Finding information on the web – It is Google core business, with objectives of relevance, sufficiency, fastness and accuracy.
- Communicating and collaborating online – Gmail, Google Calendar, Google Docs… With 20% of the search requests concerning proximity search, they created geolocation services : Google Earth, Google Maps…
- Producing and spreading content to friends, readers or fans : Blogger, Youtuben Google+…
- Accessing to the Web from every device : Chrome, Android, Google TV…
- Extending the boundaries of the web in the interest of the user.
Chrome highlights its fastness for the display and the relevance of the results. Google’s new algorithm Panda improves the relevance of the results by hindering websites that duplicate content without any added value (12% of search impacted).
Release the energies to innovate and create!
« It’s easier to ask for forgiveness than it is to get permission » (attributed to Grace Hopper-Informatic engineer, creator of Cobol and Fortran languages).
Saying « YES » creates a general empathy favorable to innovation. But it is easier to say no and use thousands of excuse to get away. And this is often the case in big companies, with a strict hierarchy.
Google created a management environment base on a global ecosystem that release the energies and promote creation:
- 80% of engineers work is imposed by the direction,
- 20% is devoted to personal projects, autonomous and without any restriction
Work becomes a real challenge !
The results are there :
- 70% of the products are corporate products
- 20% are emerging products
- 10% are projects without limits
« Google Art Project » was born from the passion of one of the engineers for museums. Thanks to the technology “Street View”, this website enables to visit 17 museums in 9 countries in the world and admire their pieces.
The equilibrium between users and advertisers
Google’s revenues come from ads placed on the browsers (Adwords) and on the websites (Adsense).
On Google’s results webpages, ads are always identified as « commercial links » (11 results maximum) :
- 3 results maximum at the top of the page
- 8 results maximum, on the rights column.
The advertiser only pays when the user clicks on the link (Pay-per-click). No pop-up advertising, too disturbing.
The order of appearance of commercial links is determined by the relevance :
Relevance x cost/click = ranking of the ad
A synergetic and opened innovation process
- At Google, the ideas come from everywhere and are shared!
Hierarchy is not too important or too strict and it changes everything: only 8 levels between the CEO and the newly hired employee.
Much more complicated to manage daily, this organization encourages the emergence of new ideas. It fits particularly well to the Generation Y, which wants more engagement and less hierarchy.
- Restraints make people more creative.
Ex : during the Egyptian revolution, Internet was cut ; Google engineers developed in one day a platform using the telephone network to deliver messages to the internet users.
- Everything has to be measurable. This is US culture.
- Innovation implies to accept to not achieve instant perfection : this is the advantage of the versionning culture with products launched in alpha and bêta version, proposed to internet users for improvement.
- Working on projects that matters.
- Following your dreams !
You always need to make a « Big Bet », a courageous and visionary project (ex : a car with automatic pilot for a world without accidents).
With its dynamic management system, opened and stimulating, Google lean on its experiences to take up new challenges.
And it is always by placing the user friendliness at the center of their process that Google’s engineers develop new platforms and services.