Corporate Management Principles from Eric Schmidt and Jonathan Rosenberg’s ‘How Google Works’
I hadn’t been able to read ‘How Google Works’ by Eric Schmidt and Jonathan Rosenberg for a long time. This weekend, I started reading it on Saturday morning and finished it in one go around 03:00 on Monday morning. It was truly an amazing book. While reading, I took plenty of notes and occasionally shared important ones on my X account. Now that the information is still fresh, I’ve compiled these notes and wanted to share them with you all. If you’re ready, let’s get started!
Don’t Listen to the HiPPOs
In the first chapters of the book, the concept of HiPPO — which I had never heard before but was explained with a very sensible approach — was quite fascinating. HiPPO stands for ‘Highest Paid Person’s Opinion.’ The emphasis on not simply listening to them explains that decisions should not be based solely on the opinions of top-level executives. It also points out that when managers speak too frequently or introduce their opinions on important matters for the first time, teams tend to fall silent and accept the manager’s views. Instead, the decision-making process should rely on objective data and the expertise of team members. The team should be given the opportunity to speak up and be heard. Moreover, data and ideas should take precedence over hierarchical status. The book argues that within a company, a meritocratic structure should be implemented — one where influence is allocated not based on experience or position, but on ideas that are best supported by data.
“… For a meritocracy to function properly, it is necessary to create a culture that includes a ‘duty to dissent.’ If someone believes an idea is wrong or flawed, they should be able to express their concerns freely. If they remain silent and a subpar idea prevails, the fault lies with them. Our experiences have taught us that most productive minds have very strong ideas and are eager to share them. For these productive minds, the obligation to dissent is simply a way to ease that eagerness. Still, others might feel uncomfortable expressing opposing views in public settings. That is exactly why dissent should not be seen as optional, but as a necessity.”
Structure the Company Around the Most Impactful People
I consider this mindset one of the most beautiful aspects of the book: it suggests that the organization should be built with the most competent and effective employees — in Googlers’ terms, the smart creatives. These individuals typically possess a combination of technical expertise, business acumen, and creativity. It emphasizes that rather than relying on the hierarchical approach common in many companies, an organization should be established where individuals are prioritized based on their competence and contributions. This brilliant idea not only highlights freedom of thought but also brings creativity to the forefront within the company. As a result, it enables those individuals who make the greatest impact to work freely, thereby contributing to the overall success of the company. So, place your most valuable employees at the center and create a structure that maximizes their potential.
“… David Packard took company culture very seriously. In a speech he delivered to the company’s managers in 1960, he stated: ‘Companies exist to do useful work. They contribute to society. When you look around, you can still see people whose only concern is money, but true power comes from the desire to create something different. It comes from those who are passionate about doing something else, like developing a new product or service. These people work to create something valuable.’”
Work Hard in a Good Way
Employees in a company can work a lot and intensely. However, as long as it is for a job in which they find passion and meaning, it is a positive experience. When working hard is not driven by passion and meaning, it is merely a way of grinding through tasks. What matters is bringing excellent results and ideas with passion to the work and implementing positive gains with meaning into the company. Therefore, it is a good idea to direct employees toward jobs in areas they are passionate about. Avoid static and other meaningless tasks that will drive them to burnout. Giving them the opportunity to work on projects that are valuable for both themselves and the company will also open the door to good opportunities and projects.
“Choose the people you want to have by your side carefully. Do not only include those who have been with you for a long time or those who graduated from the best schools with the highest degrees, those with the highest ratings. Instead, bring along the best productive minds you can find and people who can offer you different perspectives on the path to change.”
Default to Open, Don’t Shut Down
Openness — in other words, frequent communication — will greatly enhance information sharing within the company and communication among employees. Practices such as directing colleagues to the right people, offering support, and assisting one another create an open communication environment accessible to everyone. Rather than keeping information secret — except in cases where confidentiality or security is necessary — make it public by default. Sharing information, transparency, and open-source approaches boost the creativity of both internal teams and external partners.
Create a ‘Yes’ Culture
Viewing new ideas and risks as opportunities to try rather than reject significantly increases innovation. Saying “no” is always easier, but for growth and innovation, we must learn to say “yes.” This kind of environment and culture emboldens employees and fuels creativity. That said, not every idea will succeed, and failure should not be punished. Instead, failure should be viewed as a learning opportunity — a perspective that should be clearly communicated to employees. So when a suggestion arises within the team, let your first reaction be “Why not?”
Have an Idea!
Meetings within and between teams should be structured so that everyone has an idea and feels free to express it openly. Active contribution should be expected rather than passive participation. Staying silent or merely agreeing can diminish a team’s potential. When everyone shares their opinions, better decisions can be made. In these situations, be the one who breaks the silence! In meetings, ask participants to clearly state their views — frequently using the question, “What do you think about this?” — and encourage diverse perspectives. Reward those who share their ideas and create an environment that welcomes constructive criticism.
Decide with Data
In decision-making processes, we must always rely on data. In the absence of data, intuition or personal opinions inevitably come into play, greatly increasing the likelihood of making faulty decisions. Objectively prepared data not only reduces biases within the team but also leads to better outcomes. Therefore, data is not just a guide, but also a tool that increases the accuracy of decisions. At the same time, it is critical to avoid getting lost in unnecessary analysis when interpreting data.
“When you find yourself at the helm of a company led by two highly active, respected, and intelligent founders like Eric’s situation, this trait becomes even more important. For example, there was an occasion when Eric, Sergey, and Larry disagreed on an important feature of a new product. While 20 people in the meeting sat silently watching, the three engaged in a heated debate. After several minutes, Eric ended the meeting and, later that same afternoon, scheduled a meeting exclusively for the three leaders. Through this meeting, Eric realized that not only were the two founders opposing his opinion, but they were also opposing each other. With a decisive “enough is enough,” Eric allowed the two founders to make the decision; however, they had to reach a final decision within the next two days. The following day, when Eric visited Larry and Sergey to ask who had prevailed, the answer was as usual: “actually, we came up with a new idea.” This new idea turned out to be the best solution and was accepted as the decision.”
Make Fewer Decisions
I believe one of the toughest challenges in the corporate world is working within a hierarchy that micromanages. When leaders try to control every minute detail, it not only slows down and frustrates the team, but also hinders the leaders themselves, trapping them in a bottleneck. Therefore, leaders should focus only on the most critical decisions and delegate the rest to their teams. Trust your employees and allow them to make their own decisions. This will not only lighten the leader’s burden but also increase the teams’ sense of responsibility and confidence. So, if you are a leader, delegate trivial decisions and focus solely on matters of strategic importance, thereby gaining time to set the vision and focus on the big picture.
Develop Your Successor
It is important to remember that a good leader secures the company’s long-term success by preparing those who will follow. Identify people early who can fill your role and mentor them. This approach not only prepares someone to take your place but also fosters the development of the team.
Know the Details!
First of all, I must emphasize that the book stresses the importance of mastering the details. However, this does not mean “micromanage!” The point is to underline the importance of leaders understanding the essence of their team’s work and being able to provide guidance when necessary. This will foster very good dynamics within the team. When you are in control of the details, you gain credibility and earn the respect of your teams. However, be careful not to get bogged down in minutiae — focus only on the strategic details.
“A great example of internal transparency in our company is OKRs. An employee’s OKRs include their goals and the key results achieved. Every quarter, all Google employees share their OKRs on our internal network, Moma, so that everyone in the company can see what others are working on and what their priorities are. When you meet someone at Google and want to learn more about them, you log into Moma and read their OKRs. In these OKRs, the individual does not just list their title and job description; they write about what they have been working on, what they truly care about, and what they love. Reading OKRs is the fastest way to understand how to motivate a team.”
Repetition Doesn’t Spoil the Prayer
Just as in everyday life, repetition in corporate communication is a critical tool for embedding the message and ensuring it is properly understood. It’s important to remember that employees, especially those in large organizations, may not fully grasp the message the first time around. Therefore, repeating or reminding teams of important and critical messages multiple times is the right approach. Additionally, when introducing an important strategy or goal, reiterate it in meetings, emails, and technical chats.
Build Relationships, Not Hierarchy
Building strong relationships among employees increases innovation and efficiency, whereas rigid and hierarchical approaches lead to negative, traditional mindsets and a stifling atmosphere within teams. Leaders should serve as a unifying indicator rather than using hierarchy as a tool of pressure. They should cultivate one-on-one relationships with team members and encourage them to connect with each other. As the book emphasizes with events like Google’s TGIF meetings, we should organize activities that allow people from different departments to meet and boost interaction. Moreover, we should do everything possible to create an environment where ideas are discussed irrespective of hierarchy.
“At the same time, taking on big challenges can be easier because big challenges attract great talent. There is a symbiotic relationship between big challenges and highly intelligent, talented people: challenges get solved, and people feel happy. If you burden the wrong people with big challenges, you trigger anxiety. However, if you assign those challenges to the right people, it becomes enjoyable. Those people derive great pleasure from rising to challenges, and these challenges come with very real benefits, as emphasized by sociologist and management guru Rosabeth Moss Kanter: new capabilities, new connections with other brilliant individuals in the field, and an enhanced reputation. In short, when you assign the right challenges to the right people, you make the most important investment — what economists call an investment in human capital.”
Focus on the User
One of Google’s fundamental principles is always to put the user at the center. In the book, Larry Page and Sergey Brin’s emphasis that “if we do great things for users, the money will follow” is frequently highlighted in every successful project. For example, this approach has led to success stories across all of Google’s products — from the search engine to Gmail. “User satisfaction is the key to long-term success.”
Ideas Come From Everywhere
Innovation should not come solely from top management or a specific team. Ideas can emerge and develop from every level of the organization — even from external sources. The book offers a great example by noting that Gmail actually began as a 20% time project by an engineer and achieved success.
“… If you want to encourage innovation, the worst thing you can do is invest too heavily. As Frank Lloyd Wright once said, ‘Man builds his greatest buildings when he is most restricted.’”
Not About the Money
Your strategy should always focus on creating long-term value rather than short-term profit goals. The book emphasizes — with numerous examples of successful projects — that while user-focused innovation ultimately leads to financial success, money should not be the primary motivation. When evaluating projects, ask “How valuable is this for users?” rather than “How much profit will this bring?” One of the projects highlighted is Google Maps. Although Google Maps was not a profitable model in its early years, its evolution into an indispensable tool for users eventually paved the way for long-term success.
And finally, my two favorite core topics are the 70/20/10 Rule and the 20% Time Rule. I will discuss them separately later. Thank you very much for reading. See you later!
