Category: Management

Google Evolves

Gary Hamel has recently penned some thoughtful observations about what practices of Google have led to its success.  An excerpt from that analysis appears below.  (Hamel earlier wrote a popular book in which he makes extensive use of Schumpeter’s process of creative destruction.)

Only time will tell whether Google has succeeded in building an evolutionary advantage.  But consider:  Since it’s founding, it has repeatedly morphed its business model.  Google 1.0 was a search engine that crawled the Web but generated little revenue; which led to Google 2.0, a company that sold its search capacity to AOL/Netscape, Yahoo and other major portals; which gave way to Google 3.0, an Internet contrarian that rejected banner ads and instead sold simple text ads linked to search results; which spawned Google 4.0, an increasingly global entity that found a way to insert relevant ads into any and all Web content, dramatically enlarging the online ad business; which mutated into Google 5.0, an innovation factory that produces a torrent of new Web-based services, including Gmail, Google Desktop, and Google Base.  More than likely, 6.0 is around the corner.

Of course Google may ultimately fall victim to hubris and imperial overstretch as it takes on Microsoft, Yahoo, eBay, the occasional telecom giant and pretty much everyone else in cyberspace.  Or like Microsoft, it may simply become like every other big company as it grows.  But that’s not the way I’d bet.  Google seems to have grasped the new century’s most important business lesson:  The capacity to evolve is the most important advantage of all.

 

For the full commentary, see:

Hamel, Gary.  "Management à la Google."  The Wall Street Journal  (Weds., April 26, 2006):  A16.

 

 

 

And here is the information on Hamel’s most recent book:

 

Hamel, Gary. Leading the Revolution: How to Thrive in Turbulent Times by Making Innovation a Way of Life. Revised & Updated ed.  Harvard Business School Press, 2002.

 

 Source of image: http://www.amazon.com/gp/product/B000EPFVBE/sr=8-1/qid=1146333251/ref=pd_bbs_1/104-5668094-9083929?%5Fencoding=UTF8

Welch: Importance of Taking and Spreading Best Employee Ideas

Sam Walton may have been the grand master of absorbing good ideas of others and then spreading the ideas across the company. Another master was Jack Welch:

 

(p. 383) Getting every employee’s mind into the game is a huge part of what the CEO job is all about. Taking everyone’s best ideas and transferring them to others is the secret. There’s nothing more important. I tried to be a sponge, absorbing and questioning every good idea. The first step is being open to the best of what everyone , everywhere, has to offer. The second is transferring that learning across the organization.

 

Source:

Welch, Jack. Jack: Straight from the Gut. New York: Warner Business Books, 2001.

See also pp. 197-198 for Welch’s description of the specifics of how Wal-Mart got this job done.

For even more details, see: Walton, Sam. Made in America: Doubleday, 1992.

 

Peter Drucker Saw the Importance of Creative Destruction

12drucker_184.jpg1999 photo of Drucker from NYT online article cited below.

Peter F. Drucker, the political economist and author, whose view that big business and nonprofit enterprises were the defining innovation of the 20th century led him to pioneering social and management theories, died yesterday at his home in Claremont, Calif. He was 95.

For the full obituary, see:
BARNABY J. FEDER. “Peter F. Drucker, a Pioneer in Social and Management Theory, Is Dead at 95.” The New York Times ( November 12, 2005) online version dowloaded from http://www.nytimes.com/2005/11/12/business/12drucker.html?pagewanted=1

Peter Drucker is sometimes given credit for helping keep the ideas of Schumpeter alive, and helping spur their revival in the 1980s. See Drucker’s article:
Drucker, Peter F. “Modern Prophets: Schumpeter or Keynes?” Reprinted as Ch. 12 in The Frontiers of Management. New York: Penguin Putnam, Inc., 1986, pp. 104-115 (originally published as: “Schumpeter and Keynes.” Forbes (May 23, 1983): 124-128).