The perils of being big: Google's reorg sounds familiar

Google CEO Larry Page has reorganized the company so he's ultimately accountable for performance. In a nutshell, he's giving his lieutenants more autonomy to innovate without a decision-making committee.

Sound familiar? Of course it does. Google is doing what every other company on the planet does. Companies reorganize executives and reporting structures to keep some of the spark they had as startups. The problem is this: The more you grow the more complicated these structures become.

First, here's Google's line-up via the LA Times:

• Andy Rubin, head of the Android effort, leads mobile;
• Vic Gundotra will now lead social;
• Sundar Pichai becomes senior VP of Chrome;
• Salar Kamangar is senior VP of YouTube and video;
• Alan Eustace is the lead for search;
• And Susan Wojcicki leads ads.

Many of these names are familiar. What's changed? According to the LA Times and other reports, Page is giving these executives autonomy. After all, Android and YouTube did fine operating independently.

If you've been following corporate structures you've seen this movie before. Company rockets to the top. Company gets big. Company tries to be innovative as it swells to 25,000 employees from 200. Company rearranges structure to be more decentralized to have a portfolio of mini-startups.

That series of events explains Google's status today. Rest assured that in a few years Google will find these autonomous units create the dreaded "silo-ed" organization. These units operate independently and then don't leverage being part of a larger parent. These silos are why a company like Apple can kick the snot out of companies like Sony and Samsung. How can startups sneak up on giants every time? Being big sucks in many ways.

So what happens next? Google will collapse these silos down the road. A few units will become less independent. Some things will be centralized. Others won't. Not all executives are created equal.

In other words, Google looks like your average company these days. How many times has Microsoft rejiggered reporting structures to recapture the golden years? Cisco is trying to get more focus today. Name any company and you find various pendulum swings in management structures. Management at scale is difficult. Any large company will tell you that. GE and IBM seem to have the scale drill down, but honing that structure took decades.

Google is entering its big management journey now and the odds are high that Page will have to continually tweak. Welcome to scaling an organization. It's much easier to mock bloated rivals than actually remain big and nimble.

Related:

• New Google CEO Larry Page: Here are your top two priorities
• Google kicks off the Larry Page era: 5 challenges ahead

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