Case 3 - Groups 3 and 6

7/31/2019 Case 3 - Groups 3 and 6

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CASE 2 for Groups 2 and 7:

Triumvirate Leadership at Google

In 1998, while they were doctoral students at Stanford University, Sergey Brin and

Larry Page founded Google. In 2001, Brin and Page recruited Eric Schmidt to be Google’s

chief executive officer. Schmidt was charged with providing the organizational and

operational expertise and leadership for Google, while Brin and Page provided the

engineering, technological, and product development leadership.i As some pundits have said,Page and Brin knew they weren’t professional managers or marketers or masters of strategy,

so they brought in a “grown-up,” Eric Schmidt, to operate the company.ii

Google’s success can be attributed to its triumvirate leadership of Brin, Page, and

Schmidt, “who have managed to beat back rivals from Yahoo! to Microsoft.”iiiHowever, one

of the Google’s biggest mysteries is its leadership triumvirate and how it functions.iv

Page is

president for products and is acknowledged as the company’s thought leader and someone

who gets involved in projects to make sure things get done. Brin is president of technology

and assumes responsibility for advertising initiatives, which is the money-making part of

Google.v “Conventional wisdom is that Schmidt’s job is to break ties between Page and Brin

and to communicate with Wall Street and the news media. Insiders say that underplays his

role. He sets the company’s overall agenda, gives direction on workaday issues the founders

don’t care to address, and more than occasionally reminds Page and Brin to behave

themselves.”viSchmidt is a skilled big-company executive, having had substantial experience

at Novell and Sun Microsystems before being recruited to Google. He is a seasoned marketer

and a renowned technology expert as well.vii

In April 2007, Schmidt was elected board

chairman in addition to being CEO. Google had not had a chairman since it went public in

2004 although Schmidt effectively served in that role.viii

In commenting on the role Schmidt

has played in Google’s success, David Nadler, a renowned business consultant, says, “Page

and Brin’s handoff to Schmidt can be seen as a classic case of redesigning the management

structure to complement the strengths of the top people.” ix

Nonetheless, Brin and Page seem to be the dominant forces in the company becausetheir stock shares carry ten times as many votes as the ordinary stock shares. Moreover, Brin

and Page “give themselves carte blanche to do what they like, buy what they like, diversify

wherever they like and pay no dividends.”x

The leadership triumvirate also has high expectations for Google employees. Google

hires only class-A talent because Brin, Page, and Schmidt believe that hiring just one B-level

person initiates a slide into mediocrity. The company has generous reward and award

programs in order to ensure that employees with great ideas don’t launch their own

entrepreneurial ventures.xi

Moreover, Google essentially lets engineers run the show. Every

Google employee divides his or her work time into three parts: 70% is devoted to Google’s

core businesses of search and advertising; 20% is targeted toward off-budget projects related

to the core businesses; and 10% is allocated to the pursuit of far-out ideas.xii

The timeallocation for off-budget projects and far-out ideas is more than a perk; “it’s Google’s seed

corn for the future.”xiii

Brin and Page do not see themselves as “infallible seers with a divine right to dictate

Google’s next strategy and the one after that.” Instead, they have “created a Darwinian

environment in which every idea must compete on its merits, not on the grandeur of its

sponsor’s title.”xivEncouraging creativity and innovation is a Google hallmark, and the

company has implemented many policies, processes, and procedures to foster creativity and

innovation. For instance, mechanisms are in place to share ideas, get input from peers, recruit

people to work on project ideas, and generate support for change. As such, Google is a highly

transparent organization for insiders.xv

But Google is not highly transparent for outsiders! Google seems to relish beingsecretive and opaque and confusing the competition.

xviPerhaps this is no more apparent than

in the leadership triumvirate’s apparently deliberately confusing comments on transparency

and corporate strategy. In commenting on the need for transparency in business, Schmidt

7/31/2019 Case 3 - Groups 3 and 6


says, “[w]ith all the headlines we’re making, we don’t want our announcements to surprise or

confuse anyone. We don’t want our partners to think we’re competing against them.” Schmidt

continues, “[w]e try very hard to look like we’re out of control. But in fact the company is

very measured. And that’s part of our secret.” xvii Page adds, “[w]e don’t generally talk about

strategy because it’s strategic. I would rather have people think we’re confused than let our

competitors know what we’re going to do.”xviii

Schmidt also says that he “intentionally

propagated the perception of Google as a wacky place to allow the company to build up its

business under the radar.”xix

Along with not being transparent to outsiders, Google has created some disharmonywith them. By taking on Microsoft (desktop software), phone companies (a San Francisco wi-

fi plan for free wireless Internet service), eBay (classified advertising), and others, Google has

not been making friends.xx

Google even seems to be offending its paying customers, and in

some “parts of the business community, it is acquiring the image of a somewhat

sanctimonious bully.”xxi

This is an interesting anomaly; particularly given Google’s famous

slogan Don’t Be Evil and its pro-consumer stance. Rather than creating disharmony,

Google should have been winning friends.xxii

Discussion Questions

1.

In what ways are Sergey Brin, Larry Page, and Eric Schmidt managers? In what ways areBrin, Page, and Schmidt leaders?

2. Use the concepts of transactional, transformational, charismatic, and authentic leaders to

describe the leadership of Brin, Page, and Schmidt.

3. What skills would you personally need to develop to become leaders like Brin, Page, and

Schmidt? What could you do to develop or refine those skills?

SOURCE: This case was written by Michael K. McCuddy, The Louis S. and Mary L. Morgal

Chair of Christian Business Ethics and Professor of Management, College of Business

Administration, Valparaiso University.

i Company Overview. Google. http://www.google.com/intl/en/corporate/index.html (accessed October 11,

2007); Google Management. http://www.google.com/intl/en/corporate/execs.html (accessed October 11,

2007).

ii Nadler, D.A. (2007) The CEO’s 2nd Act. Harvard Business Review (January), Vol. 85, No. 1, pp. 66-72.

iiiBerfield, S. (Ed.) (2006) The Best of 2006: Leaders. Business Week (December 18), No. 4014, p. 58+.

iv Berfield, S. (Ed.) (2006) The Best of 2006: Leaders. Business Week (December 18), No. 4014, p. 58+.

v Lashinsky, A. (2006) Who’s the Boss? Fortune (October 2), Vol. 154, No. 7, p. 93.

vi Lashinsky, A. (2006) Who’s the Boss? Fortune (October 2), Vol. 154, No. 7, p. 93.

vii Nadler, D.A. (2007) The CEO’s 2nd Act. Harvard Business Review (January), Vol. 85, No. 1, pp. 66-72.

viiiDelaney, K.J. (2007) Google Displays Core Strength; As Product Line Expands, Search Business Drives

Surges in Profit, Revenue. The Wall Street Journal, Eastern edition (April 20), p. A3.

ix Nadler, D.A. (2007) The CEO’s 2

ndAct. Harvard Business Review (January), Vol. 85, No. 1, pp. 66-72.

x Hosking, P. (2006) For Those Searching for Value, You Must Look Beyond Google. The Times (United

Kingdom) (February 18), from Newspaper Source database (accessed October 6, 2007).

xi Hamel, G. (2006) Management a la Google. The Wall Street Journal, Eastern edition (April 26), p. A16.

xiiIgnatius, A. (2006) In Search of the Real Google. Time (February 20), Vol. 167, No. 8, p. 36 (9 pages).

xiii Hamel, G. (2006) Management a la Google. The Wall Street Journal, Eastern edition (April 26), p. A16.

7/31/2019 Case 3 - Groups 3 and 6


xiv Hamel, G. (2006) Management a la Google. The Wall Street Journal, Eastern edition (April 26), p. A16.

xvHamel, G. (2006) Management a la Google. The Wall Street Journal, Eastern edition (April 26), p. A16.

xviBerfield, S. (Ed.) (2006) The Best of 2006: Leaders. Business Week (December 18), No. 4014, p. 58+.

xvii Ignatius, A. (2006) Meet the Google Guys. Time (February 20), Vol. 167, No. 2, p. 40 (2 pages).

xviii

Ignatius, A. (2006) In Search of the Real Google.Time

(February 20), Vol. 167, No. 8, p. 36 (9 pages);Ignatius, A. (2006) Meet the Google Guys. Time (February 20), Vol. 167, No. 2, p. 40 (2 pages).

xixIgnatius, A. (2006) In Search of the Real Google. Time (February 20), Vol. 167, No. 8, p. 36 (9 pages).

xx Ignatius, A. (2006) In Search of the Real Google. Time (February 20), Vol. 167, No. 8, p. 36 (9 pages).

xxiHosking, P. (2006) For Those Searching for Value, You Must Look Beyond Google. The Times (UnitedKingdom) (February 18), from Newspaper Source database (accessed October 6, 2007).

xxiiHosking, P. (2006) For Those Searching for Value, You Must Look Beyond Google. The Times (United

Kingdom) (February 18), from Newspaper Source database (accessed October 6, 2007).

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Case 3 - Groups 3 and 6