Fast Company

Why Google’s "20 Percent Time" Isn't Stemming Its Brain Drain

The time and space Google gives engineers to work on their own projects used to be the key to luring in PhDs and other brilliant minds. The recent talent exodus suggests it's no longer enough.

Google sandtrapFrom the beginning, Google’s “20 percent time” was the carrot the company used to lure the best and the brightest to the Googleplex. PhDs and other smarty pants agreed to hand over their brains to the search giant for four days of the week and, in return, they were given the fifth to work on any project of their fancy. The premise was that smart and creative people need the space and time to pursue the wacky thoughts pinballing through their heads and that, contrary to the industrial workplace model, you couldn’t tie a creative person to their desk banging out widgets and expect they’d stick around, much less produce greatness. If pay and benefits were the keys to keeping factory workers happy and productive, “20 percent time” was the golden handcuffs for the creative set.

But now comes word that Google is contemplating launching an in-house incubator, where some of the company’s smartest smarty pants will get to work on their own inspirations full-time. According to the New York Times, the idea is one of several the company is considering to combat the recent exodus that is seeing some employees leave to either join faster, nimbler startups, like Facebook, or to start their own companies.

Current and former Googlers told the Times that they both felt things didn’t move quickly enough at Google and that the projects they did work on--even those that did see the light of day--got buried in a company as large as Google. “There’s a lot of these cool features that are very hidden," said one, "and a lot of people worked very hard on them and they were kind of sad that they spent a year of their life on something that gets 0.1% usage."

All of which begs the question: Can a company get so large that innovative incentives, like 20 percent time, simply aren’t enough to hold on to the kinds of pioneering, entrepreneurial employees who are the key to helping companies remain on the cutting edge?

Google now has 23,000 employees, up from 5,000 just five years ago. It has 70 offices in 38 countries. And though it continues to place a premium on coming up with new features and offerings, it nevertheless has a basketful of products that need continual maintenance and upgrading. If you are young and energetic, chomping at the bit to build cool stuff, would you think a company of 23,000 people would be the place to do it?

Even Google CEO Eric Schmidt has conceded that things don’t move as quickly as they once did. “It’s absolutely harder to get things out the door,” he told the Times. “That’s probably our biggest strategic issue.”

An incubator is “20 percent time” on steroids. The thinking seems to be that giving your in-house entrepreneurs all the space in the world to work on their passions will keep them loyal to Mother Google. But even that might not be enough. Having a wolf at the door, as you do at startups, creates a force that propels you to take risks and get creative in ways that simply don’t emerge when you know your paychecks will keep coming irrespective of whether your project succeeds or fails. And those risks and bursts of creativity are what produce real innovation.

The wolf--the prospect of failure--also produces the adrenaline rush that pioneering souls feed on. You just can’t get that rush when the next paycheck is guaranteed. Even Facebook, to which Google has lost over 100 employees, has reasons to fear the wolf. Predictions that a Facebook IPO will bring in figures as high as $100 billion are all talk. There is no guarantee. And you can be sure that the uncertainty over the actual outcome drives the folks at Facebook to move quickly and take gambles that a larger, more established company would think twice about (or have endless series of meetings to discuss).

That, of course, combined with the fact that Facebook is still a fairly small company. When it launched its Messages features this month, company leaders touted the fact that the project had been produced by the company’s “largest engineering team yet.” What did that mean? Fifteen engineers.

Entrenched companies can only innovate so far, which is why Proctor & Gamble set up the Connect + Develop program to get outside companies to innovate on its behalf (earning it a position on Fast Company's Most Innovative Companies list). Similarly, Netflix created its $1 million prize as a means of leveraging outside talent to solve the difficult problem of improving its recommendation engine.

Google will have to get used to seeing its best and brightest--or at least its most entrepreneurial--continue walking out the door, incubator notwithstanding. Its best hope for groundbreaking innovation may lie for the most part in the place from which it has emerged in recent years--in acquisitions.

What do you think? Has Google’s 20 percent time reached its natural limit? Is there a point when, no matter how creative their incentives are, a large company simply won’t be able to keep smart, creative engineers on staff? Or is it in fact possible for large companies to keep entrepreneurs in-house--and keep them innovative?

[Photo by Andrew Hur]

 

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6 Comments

  • Rob Day

    Perhaps this is an all too simplistic approach, but I think a big company can win at this game if it can successfully replicate the environments in which innovation thrives. This means injecting an appropriate dose of risk and reward.

    The challenge to this is it requires a sophisticated level of decentralization that I do not believe anyone has mastered yet. Business units would have to act as mini start ups where the members have to go get funding and make things happen to get paid, but when they do make things happen the pay day has to be different. There has to be ownership as well as financial reward.

    At this point Google would be acting as almost a VC firm supporting smaller units within its umbrella. I think it would be clever to develop business units based on strategic goals and try finding the entrepreneurial people to fill those units and execute the plans.

    Furthermore, Google could enact basically a graduating program.

    Google hires individuals in programming, engineering, marketing, sales whatever.
    During the 20% time alloted these staffers create full business plans for their ideas
    Successful people/ideas are sent off to form one of the aforementioned business units
    Pay no longer comes from a Google bi-weekly, but rather the "VC" money Google throws their way
    If project fails they are out on their own like anyone else
    If project succeeds they have part ownership of the program (you can get the CFOs to figure this one out)

    This gives an unheard of level of initial security to entrepreneurs while also thrusting them into that true inspirational incubator when they are ready. I would love to write more on this, but my 5% time is up!

  • James E

    I recently read about Zingerman's Community of Businesses that is similar to what you are saying Rob. However, it's all bottom up. The entrepreneurial employees come up with the ideas that become the business units. They create the business and if chosen for company investment will become partners in that endeavor with ZCoB being the majority owner.

    However, their efforts are on their own time and they don't get paid for it. Zingerman's also gives these employees very long leashes and alot of time to develop thier ideas. Also, any employee can participate, dishwashers to managers.

  • Rob Day

    Wow... Thanks for sharing that. So there is hope?! I love that idea, but I guess I'm not too original :)

  • Richard Presley

    John Boyd's OODA Loop has already identified how this cycle works. The victor in any strategic environment is the one who can make observations, orient one's self in response to analysis and synthesis of the data, determine a course of action, and then act on that decision faster that one's competitors. The caveat being that any given situation is constantly changing and this loop must be repeated often and quickly in order to survive.

    The other caveat is that any organization of sufficient size must have several levels of OODA Loops all functioning independently but in coordination around shared objectives that are clearly articulated at every level of the organization. It sounds from the article that Google is the place where good ideas go to die because there is no clear execution. How else does one explain the "success" of such products as Google Wave or Buzz or any of the other products that never really got any traction in the face of competition?

  • Kathy Mast

    I don't think Google's 20% time reached its natural limit. There are still thousands of the "brightest and the best" people that would love to get jobs at Google and take advantage of 20% time. They are waiting in line for the opportunity.

    However, it may be time for additional incentives to retain the existing top talent within Google. Launching an in-house incubator is a great step. All companies must be "ambidextrous," equally adept at on-going improvements but also using incubators and innovation teams to grow the company and a culture of continuous innovation. Continue to build on 20% time that results in, according to Google, 50% of their new products. Use incubators, flex-time, learning, entrepreneurship and recognition to grow the 50% results even further and retain existing top talent.