Howzit!!

For an added extra – staying with us through the wiki strategy story – we decided to throw in the penultimate Strategy session’s lecture notes.  The group painstakingly prepared the Google Innovation and culture causal loop diagram for the class.  It was presented by “The General” aka Gavin, to a bewildered audience – we are informed that Jon was the only attendee who actually copied our presentation down.  Royalties from future use can be forwarded to our bank account # 68i7y434rdn, ABSA Current Account J.

Enjoy the ride!

(Refer to causal loop diagram at bottom of the document)

The Google Story.  In order to determine the reasons behind the innovative and extremely ‘happy’ environment at the Google Corporation, Group 8 made use of the Systems Thinking tool – as taught by Dr Julian Day.  The initial process was started by identifying the variables through the Harvard Business Review article, pooling the variables on a white board, and identifying the drivers, links and outcomes through the use of an Interrelationship Diagraph (ID).  Once the drivers, links and outcomes had been identified, the variables were placed in a Causal Loop Diagram (CLD) – see attached diagram.

As a starting point, it was decided that investment would be the most pertinent starting point.  This is due to the fact that it is, invariably, investment that is needed for organisations to move forward.  The investment follows a circular flow in two directions, firstly; towards the actual product loop of Google, and secondly; towards the cultural loop of the organisation.  At a point in the diagram, the cultural side of the CLD links in with the R&D side of the product loop (to be discussed at a later point).

Product Loop

Starting with the product loop, the flow moves from investment to proprietary technology – which is developed as a result of the investment.  Out of the proprietary technology variable comes the design and application control, which is basically detailing the fact that Google, by virtue of the fact that they host all 3^rd party applications on their platform, can call the shots in terms of design and use.  From design and application control, there are two avenues that can be followed, namely; accelerated growth and dominance/centrality.

Moving within the primary circle of the product loop, one sees that accelerated growth is achieved in Google through investing in proprietary technology, and having design and functional control over the software being applied to their platform.  The accelerated growth is able to be done in (virtually) real time, whereby immediate and continual feedback and improvement can be effected.  This has added benefits, outside of the product loop in that the human capital – designers – are able to get immediate feedback on their developments.  This provides insight to the development team, as well as stimulates drive to perfect the application.

Off of the design and application control variable, the alternative route to accelerated growth is the dominance/centrality.  Google’s dominance in the market, which is driven by its investment in proprietary technologies, paves the way for leading edge evolution to take place in the company.  This is the point where the two overriding loops, product and culture meet.  Leading edge evolution and open source policy of Google, lend itself to one of the strongest variables in Google’s armour; collaborative attitude.  Collaborative attitude of Google allows for – or rather ‘embraces’ – 3^rd party inputs.  In addition to creating a platform off which others may benefit, Google also has the advantage of adding to the accelerated growth that fits into the primary circle of the product loop.  Google’s collaborative attitude feeds into the next loop associated with the product loop side of the CLD, namely; the revenue loop.

Possibly stating the obvious, but the revenue loop is directly involved in generating the revenues that Google does.  The starting point of this loop is the fact that the profits generated link the revenue loop back to the starting point of our analysis, namely investment.  In order to achieve the profits that it does, Google takes a very, very long term approach – which we have defined as strategic patience.  The fact that Google subscribes to a very long term approach lends itself to the ability to get an absolutely accurate picture based on the extensive data that is gathered from millions and millions of searches.  A sub-ordinate loop – the dataloop – records information based on customers’ searches, builds up a statistical database, which then feeds into the customer intentions.  This extensive data allows for accurate statistical analysis.  The statistical analysis is relevant due to the fact that the data generally confirms what the customers’ intentions were, collated over a number of years.  The collation of customer intentions allows for Google to place, with pin point accuracy, the placement of adverts.  This is the company’s main revenue source, which in turn lead to its profits.

The Cultural Loop

The Google culture has earned the company top awards for being the “best employer to work for in America” – possibly a few years running.  Google prides itself in creating an environment that is conducive to allowing the staff to make the most out of their working hours.  The environment stimulates personal interaction in the form of chill-out lounges, sport and game halls, top class restaurants – where the staff dines free of charge.  As a result of this stimulatory environment, Google is able to attract the top talent, not only from within the country, but from around the globe.  The environment that has been created allows for the top brains in the field of IT to interact with each other. This exposure to diverse intellectual capital has a stimulatory effect on each employees intellect.  It is argued, albeit by Group 8 only, that this is in fact the source of creativity in the organisation.

Complementary to the creation of creativity in the organisation is the fact that Google support continued learning for all staff.  The continued learning is driven by the underlying factor that a safe environment has been created within which the staff can develop, make mistakes and re-develop, add to or improve on products, services and capabilities.  It is at this stage that the culture loop moves off to stimulate another loop, driving iterative development which in turn fuels leading edge evolution.  Through a process of tracking performance, failure and chaos become par for the course, rather than an abnormality.  Moving through the processes of failure and chaos one needs to have a system that is in place to ensure each edition of any development is pushed through a configuration process, but, in Google terms, this happens to be a smooth configuration process.  Conversely, configuration processes are normally time consuming and irritating to the developers.  The smooth configuration process feeds into the iterative development, which feeds back into leading edge evolution.  In concluding this paragraph, the concept of failure and chaos can only happen in a safe environment which feeds back into the culture loop to continued learning.

Finding ourselves back in the culture loop, the process of identifying what makes Google the employee of choice continues.  It is at this stage that, according to the CLD provided, continued learning feeds into the fact that each and every employee is treated with respect and sincerity.  Complementing the whole cultural process is the fact that the managers at Google value employee interaction and opinion.  Whilst this is certainly a driving factor, it is seen in the CLD as an input to the cultural loop that is fed from an external source (undefined).  The ambiance of sincerity, valued input and opinions, and intellectual stimulation, provides huge incentive for employees to remain in the company.  This lends itself to explaining why Google has such a magnificent history of staff retention – which in turn feeds back into the culture of the organisation.

Therefore, focusing on the complementary nature of the two loops, culture and product, one can pick up on the trends within the organisation.  In brief, the dominant yet collaborative nature of Google supports its ability to grow exponentially, whilst being able to develop leading edge technologies.  It is through a process of embracing the creative side of people, that the organisation ensures both exceptional product development, and superb staff retention.  The staff retention in itself leads to longevity.