Contemporary Management 8th Edition by Gareth Jones,Jennifer George

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Larry Page's Google 3.0: The company co-founder and his star deputies are trying to root out bureaucracy and rediscover the nimble moves of youth.
Every Monday afternoon at the Googleplex in Mountain View, Calif., more than a dozen of Google's top executives gather in the company's boardroom. The weekly meeting, known as Execute, was launched last summer with a specific mission: to get the near-sovereign leaders of Google's far-flung product groups into a single room and harmonize their disparate initiatives. Google cofounder Sergey Brin runs the meeting, along with new Chief Executive Officer Larry Page and soonto-be-former CEO Eric Schmidt. The unstated goal is to save the search giant from the ossification that can paralyze large corporations.
It won't be easy, because Google is a tech conglomerate, an assemblage of parts that sometimes work at cross-purposes. Among the most important barons at the meeting: Andy Rubin, who oversees the Android operating system for mobile phones; Salar Kamangar, who runs the videosharing site YouTube; and Vic Gundotra, who heads up Google's secret project to combat the social network Facebook. "We needed to get these different product leaders together to find time to talk through all the integration points," says Page during a telephone interview with Bloomberg BusinessWeek minutes before a late-January Execute session. "Every time we increase the size of the company, we need to keep things going to make sure we keep our speed, pace, and passion."
The new weekly ritual-like the surprise announcement on Jan. 20 that Page will take over from Schmidt in April-marks a significant shift in strategy at the world's most famous Internet company. Welcome to Google 3.0. In the 1.0 era, which ran from 1996 to 2001, Page and Brin incubated the company at Stanford University and in a Menlo Park (Calif.) garage. In 2001 they ushered in the triumphant 2.0 era by hiring Schmidt, a tech industry grown-up who'd been CEO of Novell. Now comes the third phase, led by Page and dedicated to rooting out bureaucracy and rediscovering the nimble moves of youth.
Although Google recently reported that fourth-quarter profits jumped 29% over the previous year, its stock rose only 13.7% over the past 12 months and perhaps the most serious rap against the company: that its loosely organized structure is growing unwieldy and counterproductive. The creative chaos inside Google's halls-a decentralized jungle of innovation, as one prominent venture capitalist puts it-once empowered employees to make bold moves, such as creating Gmail, the search-based e-mail system. Other than Android, the culture has recently produced a string of flops, such as Google Buzz, a Twitter clone, and Google Wave, a wonky service that let people collaborate online. Page doesn't explicitly blame those missteps on the company's loosely knit management or the famous troika at the top. Yet he concedes, "We do pay a price for [shared decision making], in terms of speed and people not necessarily knowing where they go to ask questions." His elevation to CEO, he says, "is really a clarification of our roles. I think it will help with our speed."
Former Google employees are encouraged. "Larry is a visionary, the kind of person that inspires people to do more, be better, reach farther," says Douglas Merrill, Google's chief information officer until 2008. "He would walk around the engineering department and, with just a word or two, guide or redirect projects and leave the developers feeling great about the coaching." Page says one of his goals is to take the decisive leadership style they have shown within their product groups, spread it across the company, and apply it to major decisions. "We've been inspired by a lot of the people who have been operating with more autonomy and clear decision-making authority," he says.
For example, Andy Rubin is as adept at creating mechanical marvels in his home as he is writing the software that runs tablets and mobile phones. His latest invention, produced with several Google colleagues, is "Java the Bot," a wheeled two-armed robot that can roll up to an espresso machine and perform all the steps needed to make a decent cup of coffee. (It's still in development.) Since Google acquired his eight-person start-up, Android, in 2005, Rubin has expended most of his entrepreneurial energy within the Googleplex. His Android platform has pulled off arguably the fastest land grab in tech history, jumping from also-ran to market leader with 26% of the smartphone market, vs. 25% for iPhone (BlackBerry was first, with 33%, but is losing ground). Android's success has made Rubin a model inside Google for how executives can run units autonomously. "We need even more of those," Page says of Android.
Because Rubin's mission to create a mobile operating system was so distinct from the rest of Google's goals, he was given unique leeway in managing his division. He can hire his own team and even controls the landscaping around his office building, which he decorates with supersized ornaments of the desserts (éclair, cupcake) that give versions of Android their name. Google "did a very good job of giving us autonomy," Rubin says. "We can move really, really quickly." Page, Brin, and Schmidt deserve much of the credit for Google's success-but not all of it. "The key to making Google viable was the people they hired in the early days, many of whom are still there and are super-rich," says Steven Levy, author of the forthcoming book In the Plex: How Google Thinks, Works, and Shapes Our Lives. "They are part of the inner circle that makes the big decisions."
Over the past few years, Google has lost a stream of executives to startups, venture capital firms, and, most embarrassingly, Facebook. Sundar Pichai bucked the trend. A vice president for product management in charge of the Chrome browser, Pichai, 38, was recently courted by Twitter, the hot microblogging startup. Pichai won't say whether Google sweetened his compensation, but he confirms that he's not leaving. "I'm staying. I'm happy here," he says. "I look at this as a life journey that I've been on for a long time."
How social media will and won't change Google's world is an ongoing conversation at Google's weekly Execute meetings-and it underscores Larry Page's biggest problem as Google's new CEO. Page values strong, idiosyncratic leaders who know their domains and have their own aggressive agendas. All these rising stars have to work together. The mobile team has to coordinate with the nascent local and e-commerce groups. Rubin's app-based Android vision of the future has to square with Pichai's push for the wide-open Web of Chrome OS; and Singhal's search division has to find common ground with Vic Gundotra and the new czars of social. Can they integrate their plans while satisfying Larry Page's need for speed? At some point, Page may have to dispense with the philosophical discussions, put some limits on the open atmosphere of geeky experimentation, and make some tough decisions. It's not very "Googley." But it's the central challenge of Google 3.0.
What are some of the problems that Google has run into recently as a result of its organizational structure?