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Now that Google has reached its 10-year-mark, the company is facing the cultural complexities and challenges that come with the transition from hip startup to corporate giant.

In the early days of Google, the company was able to take Silicon Valley by storm because it was a tiny company with a big idea. Unencumbered by the corporate bureaucracy of larger companies like Microsoft, Google was able to build grassroots support around its search engine and online advertising business model to grow quickly and nimbly into the multibillion-dollar company it is today.

However, with that kind of fast growth and mega-success comes a down side. The excitement of Google's game-changing technology and the collegiate culture that the company founders fostered at corporate headquarters in Mountain View, California, made the company for many years the hot place to work. But in the past year, the image of the Silicon Valley nirvana Google has created has begun to show some cracks, with key members of the brain trust leaving for other companies and stories of employee dissatisfaction with the corporate culture beginning to travel up and down the valley.

As it turns 10, one of Google's main challenges is to continue to foster technology innovation and draw the caliber of talent that startups can attract even as the company, in both size and culture, begins to look more like a Microsoft or an IBM -- behemoths over which Google once had an edge because it was different.

"Gravity affects all organizations and will inevitably affect Google," said Charles O'Reilly, Frank E. Buck professor of management at Stanford University's Graduate School of Business. "The question is whether they will deal with this in a productive way, or do something foolish."

A little more than a year ago, Google began to experience the brain drain that comes when a startup becomes a corporation and many of the early intelligentsia cash out and go on to bigger and better things -- or leave to start their own ventures.

Key Googlers such as former Chief Information Officer Doug Merrill and former Vice President of Global Online Sales & Operations Sheryl Sandberg left the company in the last year -- the latter for Facebook, where other key Google employees also defected.

Then there was the child-care fiasco that made Google's executives question the sense of entitlement the company had created among employees, and how long they could sustain it. At a TGIF (thank God it's Friday) meeting -- a weekly forum where Google's leaders meet with employees in a question-and-answer session to address any concerns or thoughts they have about the company -- employees expressed concern that the costs of company-provided child care were going to nearly double. In response, according to published reports, Google co-founder and co-President Sergey Brin bristled about employees feeling a little too entitled to perks like bottled water and candy, which the company gives out for free.

The meeting left some at the company thinking that their executives were beginning to feel the pressures about the culture they created, insiders said privately.

Indeed, "the management challenges of running a 15,000-person organization are completely different from a 1,000-person firm," Stanford's O'Reilly said.

People who have left the company recently said they felt disposable and easily replaced, and that the Google culture of long days and hard work -- where many employees feel frowned upon if they leave at a reasonable hour -- was not fully appreciated by their managers or Google executives.

To be fair, Google's woes aren't unique to the company. Many of them are the growing pains any startup experiences when it expands as fast as Google does, especially one that prides itself on creating an atmosphere that lures the best and the brightest with freebies and a laid-back vibe.

Cesar Mascaraque, European managing director for Ask.com, left Google after four years early this year, and was there as the company transitioned from having 1,000 employees to tens of thousands.


Comments

This some well-researched analysis! The next few years will present some interesting challenges for Google. Ten years ago, Microsoft was the dominating force in software and technology after its ten-year run-up culminating with the release of Windows 2000. The ensuing years have been filled with anti-trust lawsuits and constant "heel-nipping" more recently from Firefox and now Google. Microsoft also faced the brain drain problem, and have been hard-pressed to develop the types of new technology perceived as altering the market in the way Google has done with search.

I've written a couple of articles about Google's employee retention for those that are interested. One related to the brain drain challenge:
http://scottsambucci.blogspot.com/2007/06/innovation-google-employee-ret...

And another more recently on retention:
http://scottsambucci.blogspot.com/2008/06/googles-employee-retention.htm...


A very interesting article indeed.

I work in the Human Resources space and we always talk about corporate culture with regards to employer branding. The A1 global standard for a succesful employer brand has (for the last decade) been Google - how interesting to see that some of the shine has come off.

It is really not surprising at all - all good things come to an end, especially as the company grows. We will no doubt hear in years to come the same criticism levelled at Google as was once levelled at Microsoft.

I think the key to successful corporate culture is a strict adherance to core values and behaviours. I guess the trick is to define them early and to ensure that they are scaleable and make good business sense. I admire the work of Naomi Simson, founder of RedBalloon Days - www.redballoondays.com.au - an Australian online business (and one of the fastest growing in Australia).

You can check out her blog here: http://naomisimson.com/


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