Work Rules!

Preface: A Guidance Counselor's Nightmare

Building the perfect Google resume, in retrospect

My first paycheck came in the summer of 1987, when I was fourteen years old. My best friend, Jason Corley, and I had been invited by our high school to enroll in a summer-school debate class the year before ninth grade. By the next year, we were teaching it. We earned $420 each.

Over the next twenty-eight years, I amassed a random walk resume that could best be described as a guidance counselor's nightmare: I worked in a deli, a restaurant, and a library. I tutored high school students in California and taught elementary school students English in Japan. I was first a lifeguard in real life at my college pool, and then I played one on TV, appearing on Baywatch as a 1960s lifeguard in a flashback and as that old acting standby, "Man walking across background." I helped start a nonprofit that supported troubled teens, and worked at a manufacturer that built construction products. I stumbled into consulting on executive pay, and with all the wisdom a twenty-four-year-old can muster, observed that human resources was a stagnant field and fled to get an MBA. Two years later I joined McKinsey & Company, the management consulting firm, where I focused as little on people issues as I could. During the dot-com boom years up until early 2000, I advised technology companies on how to grow sales, users, and organizations. And when the bubble popped, I advised technology companies on how to slash costs, run efficiently, and pivot into new businesses.

But by 2003 I was frustrated.

Frustrated because even the best-designed business plans fell apart when people didn't believe in them. Frustrated because leaders always spoke of putting people first, and then treated them like replaceable gears. (Low point on my first project: I asked my manager for career advice and he told me, "You guys are all like arrows in a quiver. Every one of you is the same.")

I'd held blue-collar jobs and white-collar jobs, been paid minimum wage and a six-figure salary, toiled alongside—and been managed by—people who didn't finish high school and people with PhDs from the poshest universities in the world. I had worked in an environment where our sole purpose was to change the world, and another where it was all about profits for the owner. It just didn't make sense to me that no matter where I turned, people weren't treated better in their jobs. You spend more time working than doing anything else in life.¹ It's not right that the experience of work, even at some of the best employers, should be so demotivating and dehumanizing.

I determined that I had two paths to choose from. The first was to treat my teams better, improve their output, and hope that over time others would follow my example. The second was to find a way to influence how entire companies treat people. I chose the latter path because I believed it would give me the greatest chance of affecting the most people, and decided to find a job in human resources (HR). My colleagues in consulting thought I was committing professional suicide, but I'd done my homework. At the time, there were more than five thousand people in McKinsey's database of alumni, but only a hundred of them were in human resources, virtually all working as consultants for other firms or recruiters. I reasoned that my training and background would make me stand out in the HR talent pool and help me come up with novel solutions. And maybe, just maybe, that would help me have a faster career trajectory than waiting twenty or thirty years to creep up the corporate ladder. I might get to a place where I could impact more people, faster.

I wanted to work at the places where I could learn as much as possible about HR, and Pepsi and General Electric were the best-regarded HR shops at the time. I cold-called eight HR executives from the two companies, but only one, Anne Abaya at GE, returned my call. Anne, a fluent Japanese speaker from Hawaii who somehow was always able to carve out a few minutes here and there to help people, found my background intriguing and introduced me to others at GE.

Six weeks later, I was hired. I was now the Vice President of Compensation and Benefits of the Commercial Equipment Financing division of the GE Capital division of the General Electric Company. I was thrilled to be there, though my friends took one look at my business card and thought I was nuts. My first boss, Michael Evans, gave me tremendous latitude to explore the company and helped me understand GE's approach to talent.

People mattered to Jack Welch, GE's chairman and CEO from 1981 to 2001. He spent more than 50 percent of his time on people issues,² and together with Bill Conaty, his chief human resources officer, built an acclaimed people management system by stringently ranking employees based on performance, choreographing job changes for top talent every twelve to eighteen months, and building a global training center in Crotonville, New York. Jack had handed over the reins to a new CEO, Jeff Immelt, two years before I joined, which allowed me to see what had been built and how it changed as Immelt's focus shifted to other areas.

Welch and Conaty had implemented a 20-70-10 performance ranking system, where GE employees were sorted into three groups: the top 20 percent, the middle 70 percent, and the bottom 10 percent. The top workers were lionized and rewarded with choice assignments, leadership training programs, and stock options. The bottom 10 percent were fired. Under Immelt, the forced distribution was softened and the crisp labels of "top 20 percent," "middle 70 percent," and "bottom 10 percent" were replaced with euphemisms: "top talent," "highly valued," and "needs improvement." Colleagues told me that the vaunted Session C process, a yearlong review of talent across the 300,000-person-strong company, had "lost its teeth" and "just wasn't the same without Jack's focus."³

I didn't have the benefit of having worked under both CEOs, but it dawned on me how deeply a CEO's persona and focus can shape an institution. Most CEOs are very good at many things, but they become CEOs for being superbly distinctive at one or two, which tend to be matched to a company's needs at that time. Even CEOs need to declare a major. Welch is best known for Six Sigma—a set of tools to improve quality and efficiency—and his focus on people. Immelt instead emphasized sales and marketing, most visibly through GE's branded "ecomagination" efforts to make and be perceived as a maker of greener products.

In 2006, after three years at GE, I was recruited to join Google as head of People Operations. I remember the recruiter, Martha Josephson, trying to convince me not to wear a suit to the interview. "No one wears suits," she assured me, "and they'll think you don't understand their culture if you show up in one." I took her advice, but was skeptical enough that I carried a necktie stuffed into my jacket pocket in case I needed it. Years later, I'd interview a candidate who had clearly purchased a beautiful pinstripe suit just for the interview, but who was still so exceptional that I could tell we'd hire him. I closed the interview with, "Brian, I have good news and bad news. The good news is that, while you still have more interviews to go, I can tell that you're going to get an offer. The bad news is that you're never going to get to wear that suit again."

When I joined, it was two years after Google's initial public offering: Revenues were growing 73 percent a year; Gmail had just launched with an unheard-of free gigabyte of storage (five hundred times more than prior webmail services—this was so crazy that people thought Gmail was an April Fool's joke)⁴; there were six thousand Google employees and the company wanted to double in size every year; and they had this wildly ambitious mission to organize the world's information—all of it!—and make it universally accessible and useful.

This mission for me was by far the most exciting part. I was born in 1972 in Communist Romania, a country ruled by the dictator Nicolae Ceausescu and permeated by secrecy, lies, and fear. It's hard to conceive of today, but Romania at the time was much like North Korea today. Friends and family members would disappear for criticizing the government. Members of the Communist Party had access to fine clothes, consumer goods, and fruit and vegetables from the West, while my parents didn't taste their first banana until they were in their thirties. Children were encouraged to spy on their parents. And the newspapers and radio disseminated little but lies about how great the government was and how evil and oppressive the United States was. My family fled Romania seeking freedom, the right to go where they wanted, say and think what they wanted, associate with whomever they wanted.

The idea of joining a company founded with a goal of making information available to everyone was thrilling, because the state of freedom is predicated on free expression, which in turn relies on access to information and truth. I'd lived and worked in all kinds of environments and seen lots of examples of what didn't work. If this place is for real, I thought, this is going to be the best job in the world.

Since I joined, Google has grown from six thousand employees to almost sixty thousand, with seventy-plus offices across more than forty countries. Fortune has named Google the "Best Company to Work For" an unprecedented five times in the United States, as well as numerous times in countries as diverse as Argentina, Australia, Brazil, Canada, France, India, Ireland, Italy, Japan, Korea, the Netherlands, Poland, Russia, Switzerland, and the UK. Google is the most sought-after place to work on the planet according to LinkedIn,⁵ and we receive more than two million applications every year, representing individuals from every background and part of the world. Of these, Google hires only several thousand per year,⁶ making Google twenty-five times more selective than Harvard,⁷ Yale,⁸ or Princeton.⁹

Far from being professional suicide, my time at Google has been a white-water ride of experimentation and creation. Sometimes exhausting, sometimes frustrating, but always surging forward to create an environment of purpose, freedom, and creativity. This book is the story of how we think about our people, what we've learned over the past fifteen years, and what you can do to put people first and transform how you live and lead.

Why Google's Rules Will Work for You

The surprising (and surprisingly successful) places that work just as we do

Google turned sixteen years old in 2014, but became part of the fabric of our lives long before. We don't search for something on the Internet, we "Google it." More than a hundred hours of video are uploaded to YouTube every minute. Most mobile phones and tablets rely on Google's free, open-sourceⁱ operating system, Android, which didn't exist in the market before 2007. More than fifty billion apps have been downloaded from the Google Play store. Chrome, launched as a safer, faster, and open-source Web browser in 2008, has over 750 million active users and has grown into an operating system powering "Chromebook" laptops.¹⁰

And Google is just beginning to explore what is possible, from self-driving cars to Project Loon, which aims to provide Internet access by balloon to the hardest-to-reach parts of the globe. From wearable computing products like Google Glass, which blends the Web and the world in a tiny lens that sits above your right eye (we're working on a version for lefties), to the Google Smart Contact Lens, a contact lens that doubles as a blood glucose monitor for people with diabetes.

Each year, tens of thousands of visitors come to our campuses around the world. They include social and business entrepreneurs, high school and college students, CEOs and celebrities, heads of state and kings and queens. And of course, our friends and families, who are always happy to stop by for a free lunch. They all ask about how we run this place, about how Google works. What is the culture all about? How do you actually get any work done with all the distractions? Where does the innovation come from? Do people really get 20 percent of their time to do whatever they want?

Even our employees, "Googlers" as they call themselves, sometimes wonder why we do things a certain way. Why do we spend so much time on recruiting? Why do we offer some perks and not others?

Work Rules! is my attempt to answer those questions.

Inside Google we don't have a lot of rule books and policy manuals, so this isn't the official corporate line. Instead, it's my interpretation of why and how Google works, viewed through the lens of what I believe to be true—and what the latest research in behavioral economics and psychology has revealed—about human nature. As the SVP of People Operations, it continues to be a privilege and delight to play a role, along with a cast of literally thousands of Googlers, in shaping how Googlers live and lead.

The first time Google was named the Best Company to Work For in the United States was a year after I joined (not thanks to me—but my timing was good). The sponsors of the award, Fortune magazine and the Great Place to Work Institute, invited me to sit on a panel with Jack DePeters, SVP of store operations at Wegmans, an eighty-four-store grocery chain in the northeastern United States that has earned a seventeen-year run on Fortune's list of best companies to work for, taking the top spot in 2005 and showing up in the top five almost every year since.¹¹

The point of having us both on stage was to showcase our distinctive management philosophies, to show that there was more than one path to becoming a superb employer. Wegmans is a privately held regional retailer that operates in an industry with an average 1 percent profit margin, and its largely local workforce has for the most part a high school education. They've been around since 1916 and have been family-run the whole time. Google at the time was a nine-year-old publicly held global technology company with a roughly 30 percent profit margin; its recruits, drawn from all over the world, collected PhDs like trading cards. The two companies could not have been more different.

I was stunned to learn that our companies had far more in common than not.

Jack explained that Wegmans adheres to virtually the same principles as Google: "Our CEO, Danny Wegman, says that 'leading with your heart can make a successful business.' Our employees are empowered around this vision to give their best and let no customer leave unhappy. And we use it to always make our decisions to do the right thing with our people, regardless of cost."

Wegmans gives employees full discretion to take care of customers, awarded $5.1 million in scholarships to employees in 2013,¹² and even encouraged an employee to start her own in-store bakery simply because her homemade cookies were so good.

Over time I learned that Wegmans and Google weren't alone in their approach. The Brandix Group is a Sri Lankan clothing manufacturer, with more than forty plants in Sri Lanka and substantial operations in India and Bangladesh. Ishan Dantanarayana, their chief people officer, told me that their goal is "inspiring a large female workforce" by telling employees to "come as you are and harness your full potential." In addition to making their CEO and board accessible to all employees, they provide pregnant women with supplemental food and medicine; offer a diploma program that allows employees to learn as they work and even trains them to be entrepreneurs and start their own businesses; appoint worker councils in all plants to help every employee influence the business; offer scholarships for children of employees; and more. They also give back to the community, for example through their Water & Women program, which builds wells in employees' villages. "This elevates the stature of our employees in the community, and they are then privy to clean water, which is scarce."

All these efforts have made them Sri Lanka's second-largest exporter and the recipient of numerous awards for their employment conditions, community involvement, and environmental practices. Ishan elaborated how this happens: "When employees trust the leadership, they become brand ambassadors and in turn cause progressive change in their families, society, and environment. The return on investment to business is automatic, with greater productivity, business growth, and inspired customers."

Contrast Brandix's approach with the collapse of the Rana Plaza building in Bangladesh on April 24, 2013. Five apparel manufacturers, a bank, and several shops filled the eight-floor building. The day before, Rana Plaza was evacuated as cracks appeared in the walls. The next day, the bank and shops told their employees to stay away. The apparel companies ordered their workers back in. More than 1,100 people lost their lives, including children who were in a company nursery in the building.¹³

Closer to home, the 1999 film Office Space, which deadpanned the meaningless rituals and bureaucracy of a fictional technology company, became a cult hit because it was instantly recognizable. In the movie, programmer Peter Gibbons describes his job to a hypnotherapist:

I thought of these vastly different examples when a reporter from CNN International called for an article about the future of work. She argued that the model exemplified by places like Google—what I'll call a "high-freedom" approach where employees are given great latitude—was the way of the future. Top-down, hierarchical, command-and-control models of management—"low-freedom" environments—would soon fade away.

Someday, perhaps. But soon? I wasn't so sure. Command-oriented, low-freedom management is common because it's profitable, it requires less effort, and most managers are terrified of the alternative. It's easy to run a team that does what they are told. But to have to explain to them why they're doing something? And then debate whether it's the right thing to do? What if they disagree with me? What if my team doesn't want to do what I tell them to? And won't I look like an idiot if I'm wrong? It's faster and more efficient to just tell the team what to do and then make sure they deliver. Right?

Wrong. The most talented people on the planet are increasingly physically mobile, increasingly connected through technology, and—importantly—increasingly discoverable by employers. This global cadre want to be in high-freedom companies, and talent will flow to those companies. And leaders who build the right kind of environments will be magnets for the most talented people on the planet.

But it's hard building such a place, because the power dynamic at the heart of management pulls against freedom. Employees are dependent on their managers and want to please them. A focus on pleasing your manager, however, means it can be perilous to have a frank discussion with her. And if you don't please her, you can become fearful or resentful. At the same time, she's accountable for you delivering certain results. Nobody produces their best work entangled in this Gordian knot of spoken and unspoken agendas and emotions.

Google's approach is to cleave the knot. We deliberately take power and authority over employees away from managers. Here is a sample of the decisions managers at Google cannot make unilaterally:

• Whom to hire
• Whom to fire
• How someone's performance is rated
• How much of a salary increase, bonus, or stock grant to give someone
• Who is selected to win an award for great management
• Whom to promote
• When code is of sufficient quality to be incorporated into our software code base
• The final design of a product and when to launch it

Each of these decisions is instead made either by a group of peers, a committee, or a dedicated, independent team. Many newly hired managers hate this! Even once they get their heads around the way hiring works, promotion time comes around and they are dumbfounded that they can't unilaterally promote those whom they believe to be their best people. The problem is that you and I might define our "best people" differently. Or it might be possible that your worst person is better than my best person, in which case you should promote everyone and I should promote no one. If you're solving for what is most fair across the entire organization, which in turn helps employees have greater trust in the company and makes rewards more meaningful, managers must give up this power and allow outcomes to be calibrated across groups.

What's a manager to do without these traditional sticks and carrots? The only thing that's left. "Managers serve the team," according to our executive chairman, Eric Schmidt. Like any place, we of course have exceptions and failures, but the default leadership style at Google is one where a manager focuses not on punishments or rewards but on clearing roadblocks and inspiring her team. One of our lawyers described his manager, Terri Chen, this way: "You know that killer line from As Good As It Gets where Jack Nicholson says to Helen Hunt: 'You make me want to be a better man'? That is how I feel about Terri as a manager. She makes me want to—and helps me try to be—a better Googler and trademark lawyer and person!" The irony is that the best way to arrive at the beating heart of great management is to strip away all the tools on which managers most rely.

The good news is that any team can be built around the principles that Google has used. Even in the garment industry, MIT's Richard Locke found that this kind of approach works.¹⁵ He compared two Nike T-shirt factories in Mexico. Plant A gave workers more freedom, asking them to help set production targets, organize themselves into teams, and decide how work would be broken up, and granting them authority to stop production when they saw problems. Plant B tightly controlled the shop floor, requiring workers to stick to their assigned tasks and adding strict rules about when and how work happened. Locke found that workers at Plant A were almost twice as productive (150 T-shirts per day vs. 80), earned higher wages, and had 40 percent lower costs per T-shirt ($0.11/shirt vs. $0.18/shirt).

Dr. Kamal Birdi of the University of Sheffield and six other researchers studied the productivity of 308 companies across twenty-two years and came to a similar conclusion. These companies had all launched traditional operations programs like "total quality management" and "just-in-time inventory control." Birdi found that these programs sometimes improved productivity in one company or another, but "we found no overall performance effect" when the companies were looked at in aggregate. In other words, there was no evidence suggesting that any of these operations initiatives would reliably and consistently improve performance.

So what did? Performance improved only when companies implemented programs to empower employees (for example, by taking decision-making authority away from managers and giving it to individuals or teams), provided learning opportunities that were outside what people needed to do their jobs, increased their reliance on teamwork (by giving teams more autonomy and allowing them to self-organize), or a combination of these. These factors "accounted for a 9% increase in value added per employee in our study." In short, only when companies took steps to give their people more freedom did performance improve.¹⁶

That's not to say that Google's approach is perfect or that we don't make our fair share of mistakes. We've taken some bruises along the way, as you'll see in chapter 13. I expect my examples and arguments will be greeted with a healthy helping of skepticism in some quarters. All I can say in my defense is that this is really how it works at Google, and this is really why we run the company this way. And a kindred approach works for Brandix, Wegmans, and dozens of other organizations and teams, both large and small.

I once gave a talk in Chicago to a group of local chief human resources officers (CHROs) about Google's culture. After the presentation, one CHRO stood up and sneered, "This is all well and good for Google. You have huge profit margins and can afford to treat your people so well. We can't all do that."

I was going to explain that most of what we did cost us little to nothing. And that even in a time of flat wages you can still make work better, make people happier. Indeed, it's when the economy is at its worst that treating people well matters most.

Before I could muster a response, another CHRO argued back, "What do you mean? Freedom is free. Any of us can do this."

He was right.

All it takes is a belief that people are fundamentally good—and enough courage to treat your people like owners instead of machines. Machines do their jobs; owners do whatever is needed to make their companies and teams successful.

People spend most of their lives at work, but work is a grinding experience for most—a means to an end. It doesn't have to be.

We don't have all the answers, but we have made some fascinating discoveries about how best to find, grow, and keep people in an environment of freedom, creativity, and play.

The secrets of Google's people success can be replicated in organizations large and small, by individuals and CEOs. Not every company will be able to duplicate perks like free meals, but everyone can duplicate what makes Google great.