Principled Leadership

I like thinking about how to scale a company without making it feel like a big company. The standard way to scale a company is to use hierarchy and process to manage the larger scale – big decisions get passed up the chain to an appropriate decision maker, and little decisions are handled by a process that has been standardized.

But I have always disliked this approach, as it removes the initiative of smart and independent thinkers at all levels of the organization. Why hire smart people if you won’t let them think for themselves? I have long been fascinated by different management structures or bossless companies that trust their employees to make the right decisions. None of these organizations have been proven to scale past a few hundred people, though.

So how can we build companies that give autonomy to small teams while scaling up to thousands of people? Or to put a finer point on it, how can Google really be run like a startup?

As I watch the leaders at Google, I’ve realized that part of the answer is that the leaders tend to be consistent and principled. I work in the finance department, and Patrick Pichette, our CFO, is a master of this. He tends to ask the same set of questions:

  • How much investment will you need?

  • What does Google get out of that investment? (Is it revenue, cost savings, user growth?)
  • What do I have to believe? (what assumptions are you making to model the returns on the investment?)
  • How will you measure success? (what metrics will you show me in three months to demonstrate you’re on the right track?)

That’s it. He’s so consistent that I feel like I can project his voice into a meeting, and so I have become an extension of him within the org. I understand the principles he uses to make decisions and can therefore give others a good sense of how he’ll react before they go into a meeting. I can also anticipate the questions he is likely to ask, and make sure that my team has good answers beforehand so we’re not scrambling afterwards.

What’s interesting about this to me from an organizational design perspective is that Google is not depending on process or hierarchy to guide me. The thing that keeps the finance org aligned is a consistent set of principles modeled by the CFO, who then trusts employees to use their judgment in applying those principles. That is an organizational model that can scale.

And when I thought about the rest of Google, I realized that’s a lot of what makes it work – each of us Googlers has an internal model of key decision makers (Larry Page, Patrick Pichette, Nikesh Arora, Susan Wojcicki, Jeff Huber, etc.) and has a good idea of how each of them would react to a proposal. That enables us to make decisions without having to pass them up the hierarchy and without having an explicit process, and still be confident that the decisions will be consistent with the corporate direction.

I think this is how a lot of other great companies have worked. Whether it’s Walt Disney or Steve Jobs or Herb Kelleher at Southwest, their people knew how their leaders would react and could act more independently because of that knowledge. It’s not quite a cult of personality, because that would imply that the followers have no independent thought and are only doing what they’re told. It’s more like teaching a team a playbook and letting them figure out how to apply it in their particular situation. I also read once that the military does a good job of this, making sure that everybody knows the overall strategic goals for an engagement, such that if the situation changes, they don’t blindly follow their orders to “Take that hill!” if it doesn’t help with the overall strategic goal (some Googling reveals this is called Commander’s Intent).

I like this idea of scaling by trusting your people to do the right thing while not hog-tying them with a process. It lets them adapt the leaders’ guiding principles to their individual situations such that they have autonomy, but without having the organization dissolve into chaos. It does have the challenge that it won’t work if you have bad people in the org, but my guess is that pretty much no management tactics work if you have bad people – they will circumvent your process.

Anyway. I’ve been mulling this over for a while, and figured it’d be a good topic for my first blog post in nearly a year. Work has actually been calm for a couple weeks, so I have finally overcome my activation energy to post. I need to make the time to do it more often, as I have dozens of post ideas floating around, and I like myself better when I’m writing regularly.

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