CASE 2 for Groups 2 and 7: Triumvirate Leadership at Google In 1998, while they were doctoral students at Stanford University,

Sergey Brin and Larry Page founded Google. In 2001, Brin and Page recruited Eric Schmidt to be Googles chief executive officer. Schmidt was charged with providing the organizational and operational expertise and leadership for Google, while Brin and Page provided the engineering, technological, and product development leadership.i As some pundits have said, Page and Brin knew they werent professional managers or marketers or masters of strategy, so they brought in a grown-up, Eric Schmidt, to operate the company. ii Googles success can be attributed to its triumvirate leadership of Brin, Page, and Schmidt, who have managed to beat back rivals from Yahoo! to Microsoft.iii However, one of the Googles biggest mysteries is its leadership triumvirate and how it functions.iv Page is president for products and is acknowledged as the companys thought leader and someone who gets involved in projects to make sure things get done. Brin is president of technology and assumes responsibility for advertising initiatives, which is the money-making part of Google.v Conventional wisdom is that Schmidts job is to break ties between Page and Brin and to communicate with Wall Street and the news media. Insiders say that underplays his role. He sets the companys overall agenda, gives direction on workaday issues the founders dont care to address, and more than occasionally reminds Page and Brin to behave themselves.vi Schmidt is a skilled big-company executive, having had substantial experience at Novell and Sun Microsystems before being recruited to Google. He is a seasoned marketer and a renowned technology expert as well.vii In April 2007, Schmidt was elected board chairman in addition to being CEO. Google had not had a chairman since it went public in 2004 although Schmidt effectively served in that role.viii In commenting on the role Schmidt has played in Googles success, David Nadler, a renowned business consultant, says, Page and Brins handoff to Schmidt can be seen as a classic case of redesigning the management structure to complement the strengths of the top people.ix Nonetheless, Brin and Page seem to be the dominant forces in the company because their stock shares carry ten times as many votes as the ordinary stock shares. Moreover, Brin and Page give themselves carte blanche to do what they like, buy what they like, diversify wherever they like and pay no dividends.x The leadership triumvirate also has high expectations for Google employees. Google hires only class-A talent because Brin, Page, and Schmidt believe that hiring just one B-level person initiates a slide into mediocrity. The company has generous reward and award programs in order to ensure that employees with great ideas dont launch their own entrepreneurial ventures.xi Moreover, Google essentially lets engineers run the show. Every Google employee divides his or her work time into three parts: 70% is devoted to Googles core businesses of search and advertising; 20% is targeted toward off-budget projects related to the core businesses; and 10% is allocated to the pursuit of far-out ideas.xii The time allocation for off-budget projects and far-out ideas is more than a perk; its Googles seed corn for the future.xiii Brin and Page do not see themselves as infallible seers with a divine right to dictate Googles next strategy and the one after that. Instead, they have created a Darwinian environment in which every idea must compete on its merits, not on the grandeur of its sponsors title.xiv Encouraging creativity and innovation is a Google hallmark, and the company has implemented many policies, processes, and procedures to foster creativity and innovation. For instance, mechanisms are in place to share ideas, get input from peers, recruit people to work on project ideas, and generate support for change. As such, Google is a highly transparent organization for insiders.xv But Google is not highly transparent for outsiders! Google seems to relish being secretive and opaque and confusing the competition.xvi Perhaps this is no more apparent than in the leadership triumvirates apparently deliberately confusing comments on transparency and corporate strategy. In commenting on the need for transparency in business, Schmidt

says, [w]ith all the headlines were making, we dont want our announcements to surprise or confuse anyone. We dont want our partners to think were competing against them. Schmidt continues, [w]e try very hard to look like were out of control. But in fact the company is very measured. And thats part of our secret. xvii Page adds, [w]e dont generally talk about strategy because its strategic. I would rather have people think were confused than let our competitors know what were going to do.xviii Schmidt also says that he intentionally propagated the perception of Google as a wacky place to allow the company to build up its business under the radar. xix Along with not being transparent to outsiders, Google has created some disharmony with them. By taking on Microsoft (desktop software), phone companies (a San Francisco wifi plan for free wireless Internet service), eBay (classified advertising), and others, Google has not been making friends.xx Google even seems to be offending its paying customers, and in some parts of the business community, it is acquiring the image of a somewhat sanctimonious bully.xxi This is an interesting anomaly; particularly given Googles famous slogan Dont Be Evil and its pro-consumer stance. Rather than creating disharmony, Google should have been winning friends.xxii Discussion Questions 1. In what ways are Sergey Brin, Larry Page, and Eric Schmidt managers? In what ways are Brin, Page, and Schmidt leaders? 2. Use the concepts of transactional, transformational, charismatic, and authentic leaders to describe the leadership of Brin, Page, and Schmidt. 3. What skills would you personally need to develop to become leaders like Brin, Page, and Schmidt? What could you do to develop or refine those skills? SOURCE: This case was written by Michael K. McCuddy, The Louis S. and Mary L. Morgal Chair of Christian Business Ethics and Professor of Management, College of Business Administration, Valparaiso University.
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Company Overview. Google. http://www.google.com/intl/en/corporate/index.html (accessed October 11, 2007); Google Management. http://www.google.com/intl/en/corporate/execs.html (accessed October 11, 2007). Nadler, D.A. (2007) The CEOs 2nd Act. Harvard Business Review (January), Vol. 85, No. 1, pp. 66-72. Berfield, S. (Ed.) (2006) The Best of 2006: Leaders. Business Week (December 18), No. 4014, p. 58+. Berfield, S. (Ed.) (2006) The Best of 2006: Leaders. Business Week (December 18), No. 4014, p. 58+. Lashinsky, A. (2006) Whos the Boss? Fortune (October 2), Vol. 154, No. 7, p. 93. Lashinsky, A. (2006) Whos the Boss? Fortune (October 2), Vol. 154, No. 7, p. 93. Nadler, D.A. (2007) The CEOs 2nd Act. Harvard Business Review (January), Vol. 85, No. 1, pp. 66-72. Delaney, K.J. (2007) Google Displays Core Strength; As Product Line Expands, Search Business Drives Surges in Profit, Revenue. The Wall Street Journal, Eastern edition (April 20), p. A3. Nadler, D.A. (2007) The CEOs 2nd Act. Harvard Business Review (January), Vol. 85, No. 1, pp. 66-72. Hosking, P. (2006) For Those Searching for Value, You Must Look Beyond Google. The Times (United Kingdom) (February 18), from Newspaper Source database (accessed October 6, 2007). Hamel, G. (2006) Management a la Google. The Wall Street Journal, Eastern edition (April 26), p. A16. Ignatius, A. (2006) In Search of the Real Google. Time (February 20), Vol. 167, No. 8, p. 36 (9 pages). Hamel, G. (2006) Management a la Google. The Wall Street Journal, Eastern edition (April 26), p. A16.

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Hamel, G. (2006) Management a la Google. The Wall Street Journal, Eastern edition (April 26), p. A16. Hamel, G. (2006) Management a la Google. The Wall Street Journal, Eastern edition (April 26), p. A16. Berfield, S. (Ed.) (2006) The Best of 2006: Leaders. Business Week (December 18), No. 4014, p. 58+. Ignatius, A. (2006) Meet the Google Guys. Time (February 20), Vol. 167, No. 2, p. 40 (2 pages).

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Ignatius, A. (2006) In Search of the Real Google. Time (February 20), Vol. 167, No. 8, p. 36 (9 pages); Ignatius, A. (2006) Meet the Google Guys. Time (February 20), Vol. 167, No. 2, p. 40 (2 pages). Ignatius, A. (2006) In Search of the Real Google. Time (February 20), Vol. 167, No. 8, p. 36 (9 pages). Ignatius, A. (2006) In Search of the Real Google. Time (February 20), Vol. 167, No. 8, p. 36 (9 pages). Hosking, P. (2006) For Those Searching for Value, You Must Look Beyond Google. The Times (United Kingdom) (February 18), from Newspaper Source database (accessed October 6, 2007). Hosking, P. (2006) For Those Searching for Value, You Must Look Beyond Google. The Times (United Kingdom) (February 18), from Newspaper Source database (accessed October 6, 2007).

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