Welcome to the “CEO Series“. Here, we talk about how entrepreneurs learn to become great CEOs, as the greatest technology companies in history, most often than not, are led by people like them.
Day-to-day adult supervision no longer needed! http://goo.gl/zC89p
— Eric Schmidt (@ericschmidt) January 20, 2011
Early 2011, when Google gave the official announcement that Larry Page would be taking back the position of CEO from Eric Schmidt, Schmidt wrote this on Twitter. On the surface, Schmidt joined Google in 2001, which has been founded for four years and was growing rapidly, to take over the role of CEO from Larry Page who was the co-founder as well as the first CEO. This was so that Page, then a young man, could concentrate on managing the products. After ten years, when Page’s management skills and leadership skills were so good that he was able to handle a giant multinational enterprise that has a market share of 3000 hundred million, an annual turnover of 600 hundred million, and twenty thousand employees, Schmidt passed the torch back to the destined person.
But the truth is, these ten years of CEO Page’s development, was more like a rough journey on an uneven path. In order to recount the story, Nicolas Carlson from Business Insider interviewed a few dozen of Googles’ former and current employees, and referred to some important works on Google’s early phase like In the Plex and I’m Feeling Luck, and then came out with a very long article, “The Untold Story of Larry Page’s Incredible Comeback”, which I think is worth a careful read by every entrepreneur and CEO. What follows are some of my reflections after I read it.
Just like most of the entrepreneurs who take on the position of CEO for the first time, Page, in the beginning, was not a “world-class” CEO. His main problem lies in lacking empathy to “personalities that are different from his”. He expected everyone to be materialistic and rational like him and Sergey Brin, that even after a fierce debate, their friendship would still remain intact. He also expected them to treat their works in an objective manner and be willing to sacrifice for the interest of the company. Of course, not everyone is born with this ability.
The most obvious case happened in 2011 when Page decided that the project managers were to be blamed for Google’s slow production power, so he gathered all engineers and project managers, and announced that from then on the engineers were to report to the new vice president of engineering, and all the product managers were all fired immediately. Of course, many of the engineers and project managers did not think that they have committed any serious crime that deserved this kind of public humiliation. Among the project managers, many have joined Google when it was first founded, they had been through difficult times with the rest of the team. Their hard work should be valued, if not their achievement. Such an unemotional way of dismissing the employees also made those who stayed heartbroken with disappointment.
For a small, newly formed startup team that concentrated on perfecting product quality, Page’s management style might work well to bring the team to the next level. But as the company began to grow and formed its own management, structure and system, his style of leadership that was unkind and inconsistent, might actually be a great hindrance to the cultivation of healthy corporate culture as well as the well-being of the enterprise. It might spread disquiet among the employees, which in return cause the company to unable to retain their top talents. That is why, after Kleiner Perkins and Sequoia got involved with Google’s series A financing, their only request was for the company to hire a more experienced CEO.
Page was reluctant to the idea, until KP’s well-known partner John Doerr pulled some strings and got him to meet with some of the CEOs of technology companies who were already very successful at that time, including Intel’s Andy Grove, Apple’s Steve Jobs, and Amazon’s Jeff Bezos. Only then did Page realize the difference between him and them, and accepted the fact that for Google’s sake, they had to hire a more experienced CEO. Later they got Eric Schmidt to join them and at last, Google, under Schmidt’s lead, really began to grow.
Away From The Centre
Gradually, Schmidt built up his own assisting team, and managed Google very well. Over time, Page’s management responsibilities were also taken over. The only participation Page had was the review of the products, but even this was slowly reducing. By 2007, Page hardly attended any meetings at all. By 2008, he even noticed that the Public Relations team could only arrange for him a total of 8 hours of interviews a year. It seemed like Page was getting further and further away from Google’s core business, and if all things goes as expected he would retreat to the backstage and become just their spiritual leader instead. However, something changed and caused a turn of events.
In 2005, in order to prevent Microsoft to continue to dominate the operation system in the mobile world, Page made the decision of investing on Android, developed by former Apple senior executive Andy Rubin (for more information please refer to Dogfight: How Apple and Google Went to War and Started a Revolution). From 2005 to 2007, Android was a pet project of Page in Google. They had their own building, and most of the staffs in Google didn’t even know its existence.
In 2007, when Steve Jobs stood on the world stage and introduced iPhone to the world, they realized they could not just sit by and do nothing. They have to be more proactive in promoting Android to the mainstream public. With Page’s support (but objection from Schmidt), Google increased its investments in Android, which eventually became a huge success. This time Google really successfully defeated Microsoft and conquer the mainstream operating system in the post-PC generation.
The Keyword Advertising Tactic Getting Old
At the same time, Google AdWords, launched in 2000 and accounts for 70 percent of the revenues of the company, while still growing, seems to be entering the plateau stage. Under Schmidt’s lead, Google’s strategies for the past ten years, to a great extent, had been revolving around optimizing this existing curve. But upon arriving in the second half of 2010, Page saw the problem. In the rise of the social and mobile web, Google needed to find new accelerating curves, otherwise they would end up like its predecessors like AOL, Yahoo, and Microsoft, being completely overthrown by some new successor.
The Perfect Tone Down
And so, Page, having gone through the slow retreat, became more mature in the process; and having learnt an effective management style from his hands-on experiences such as leading the Android team, took back the lead from Schmidt at the right time. Just as expected, Adwords of Google in the present time of 2014 is indeed showing signs of weariness. Yet under Page’s lead, Google’s new projects like Android, self-driving cars, robots, Google fiber and other new investments, have a huge potential to take over the weight if Google search begins to go downhill in a few years.
After reading this story, the biggest impression it made on me is that leadership is truly a very, very difficult art, as CEOs who start up their own business not only have to learn from successful people; but more importantly, they also have to learn from their own failures. Even geniuses like Larry Page, who have such wonderful environments as Google and Silicon Valley, still had to spend ten years before he was up to the challenge. Then for people like us who are probably not as good as him, it is reasonable that we’ll need to take fifteen or twenty years before we are ready for it.
There are no shortcuts in starting an enterprise. We can only strive to be better than who we were yesterday.