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

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

Summary: Google is entering its big management journey now and the odds are high that CEO Larry Page will have to continually tweak the company's structure. Welcome to scaling an organization.

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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.

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Topics: IT Employment, CXO, Google

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15 comments
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  • An engineer is managing

    without any management experience. That's the downside. The upside is that he is brilliant, and Google is an unusual company.
    kshatrea
    • RE: Engineers in management

      @kshatrea
      Engineers:free spirits = oil:water
      My guess is that Google attracts a lot of kinda idealistic "free spirits". Having engineers (try to) manage them is a recipe for disaster. It will indeed be interesting to see how this works out.
      Userama
      • RE: The perils of being big: Google's reorg sounds familiar

        @Userama

        Right, I'll remember how important management is next time my manager tells me to "engineer" a way to test flow control on 48 ports with only 2 ports for traffic generation.
        tkejlboom
  • Wait - only failing companies like MS do re-orgs!

    Google has proved it doesn't need to!
    Will Farrell
    • LOL!

      @Will Farrell
      I see you let loose your inner "DonnieBoy"! :)
      John Zern
  • "to 25,000 employees from 200"

    Dammit, I hate this journalism fad. The way you naturally read is from left to right, so it should be "from-->to". I always have to stop and re-read phrases like this. Just stop it. NOW.
    Geedavey
  • RE: The perils of being big: Google's reorg sounds familiar

    Oh I hope with this reorg that all of upper management can still get their massages and do their laundry on site. And please keep the office toys around for the mere mortals who are not in management. Without them the Google employees wouldn't know what to do all day.
    Loverock Davidson
    • Loverock has fantasies about what it is like to work in a office again.

      @Loverock Davidson, perhaps one day you can get a job in an office (rather than helping office people get their purchases to their cars).
      B.O.F.H.
  • What ZDNet has become:

    "Being a big company has drawbacks in addition to advantages."

    There, I just re-wrote your article for you and saved a ton on bandwidth costs.
    x I'm tc
  • Google: The perils of failure

    Its just shuffling of seats and than its back to business, ie sending the marketing team to see what Apple is up to.
    iPad-awan
  • RE: The perils of being big: Google's reorg sounds familiar

    Yep.
    james347
  • But another inexorable maze in the making

    [i]It?s much easier to mock bloated rivals than actually remain big and nimble.[/i]

    Much like how this nation morphed into an empire in every way but by name, one that is now dangerously top-heavy at the upper management (federal) level. At this point it resembles a redundant maze filled with bureaucratic rodents finding parasitic refuge in every imaginable nook and (costly) cranny.

    Sadly, it's the only aggrandizement schema that has outpaced all our wonderfully remade multinational corporations.

    [i]"We want the world and we want it now!"[/i] ~ Jim 'Lizard King' Morrison
    klumper
  • Well,

    I didn't read a whole lot about Google's reorg, but to me it sure seems the smart thing to do.
    To give autonomy to its branches is the only way to go. It's not merely a remedy for the company "bloatedness", it's the smartest possible move given the company's current size. I think companies don't fall because of lack of centralization, but on the contrary, because they fight for micro-managing everything and so become slow, and have difficulties adapting/reacting to the frequent changes in the environment.
    cameigons
    • RE: The perils of being big: Google's reorg sounds familiar

      @cameigons Well said!
      jagdogg1975@...
    • RE: The perils of being big: Google's reorg sounds familiar

      @cameigons I have never once seen a company reorg in this way with autonomy high on the list of needs that actually held to that ideal. Generally, the silo approach works great in the short-term but results in successful subgroups whose bickering can tear down morale and cause internal problems that hold things up. Time will tell, of course, but Google would need an exceptional CEO to pull off this arrangement. The one they have now is largely untested.
      Andre Richards