Google's Greatest Innovation May Be Its Management Practice

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The announcement of Eric Schmidt moving aside as Google CEO to let cofounder Larry Page take over is a "teaching moment" for CEOs of all kinds of companies. For a crucial decade in its growth, Google was led not by a single CEO, but by a team that gave it immense strategic and management strength. Google has taught us all a lot about search, maps, apps, and lots of other things, but it may be that the most important and overlooked lesson is in innovation management. Why? Google is a pioneer in what I call B-I Leadership--Bi-Generational, Boomer, Gen-X, Gen-Y management.

We all know by now that we live in an age of sharp technological and cultural bifurcation. There has been so much change so quickly that Boomers are immigrants to a world that Gen X and Yers are born into. The way people in their teens and 20s go about their lives--their platforms, their interactions, their values, their aspirations--are vastly different from their parents and grandparents. In addition, the acceleration and multiplicity of change is producing a world of extraordinary complexity. We know this.

Big established corporations have been struggling with these new developments for over a decade and many have made big strides in changing their business models to accommodate them. Open sourcing, social media platforms, new products and services, even new HR practices for new hires are examples. We know this too.

What has not changed, however, has been business leadership practices. Corporations still hew to the concept of a single, mature CEO leading a vast, global enterprise. It is an outdated, inefficient, and destructive mode of leadership. CEOs have simply not delivered value over the past decade to shareholders, employees, or the nation as a whole. Let's look at a few key measures of the past 10 years: the S&P 500 is no higher; middle class income has stagnated; and the trade deficit has soared as the national debt exploded. CEO compensation is the single financial variable that has boomed over the last 20 years. Clearly, this generation of CEOs needs help.

Google can provide some managerial guidance. Eric Schmidt was brought in a decade ago to provide "adult supervision" to the young cofounders Larry Page and Sergey Brin. He had long experience at Sun Microsystems and other companies in the tech space as CEO, spoke the tech language and provided the big business experience the techie-centric founders didn't have. It was a brilliant bi-generational leadership model which worked for a crucial period of scaling and evolution for the startup Google. Indeed, bi-generational management is the norm for most successful high tech startups in the U.S.

Established corporations should consider a variation on this startup model--create a bi-generational CEO team that integrates Gen Xers younger Gen Y with older Boomer managers. The benefits could be significant. They include a much deeper understanding of the values and aspirations of the youngest and largest demographic cohort in the U.S. (not to mention India, Brazil, etc.); better and quicker shifting of business practices to social media platforms; and faster evolution of internal corporate compensation, work organization, and promotion to "fit" Gen Y life. For example, the partner model of service companies doesn't work for most Gen Yers. The hierarchy that still exists in most businesses won't generate their best work. And the closed, centralized technology systems inside big corporations are anathema to the open source generation.

Bringing Gen Yers into top management teams may provide the knowledge and energy to speed up the renewal of American business leadership and American business. For startups, we already bring in "adult supervision" to complement the skills and knowledge of entrepreneurial "kid techies." For the thousands of big companies lumbering along the 21st century, it's time to bring the "little fockers" into shared power. At the moment, the world is just too complex for Boomer CEOs. We need B-Y team leadership. We need to follow Google.

Bruce Nussbaum blogs, tweets, and writes on innovation, design thinking, and creativity. The former assistant managing editor for BusinessWeek is a Professor of Innovation and Design at Parsons The New School of Design. He is founder of the Innovation & Design online channel; founder of IN: Inside Innovation, a quarterly innovation supplement.

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11 Comments

  • Illysa Izenberg

    I've been reading a lot about shared leadership but most of what I've found seems to focus on virtual work teams, rather than large organizations. You mention the leadership model, and I wondered if you would share a little more information: were the 3 men's roles strictly delineated or did they share decision-making?

    Also, I wonder if Google's situation -- Gen X or Gen Y leaders who then hired a Boomer to come in at the top -- is so different from other major corporations, which generally are led by Boomers, that it would be difficult to copy? What would it take for a Boomer to bring in a Gen X or Y'er to co-lead?

  • Michael Musgrove

    Great idea, in theory. It's not as easy for established corporations to locate and then recruit a bunch of Pages and Brins as it seems, though. Until GenX and Yers that are capable of building and co-running a multi-billion dollar, market-leading company start becoming more commonplace, it's still nurturing potential via mentoring.

  • Andre Hess Brenes

    Bruce,

    I think you got a really interesting point when you say its important for companies to get Y-Gen into top managment; as a Y-Gen business person there are a lot of arguments against un-experienced (or not-so-experienced) youngsters. Do you have any advice on how to address this? Because there are lots to do when proofing that Y-Gen managment can boost up a business but not many companies risk to it.

  • Bruce Nussbaum

    Rob,
    You are absolutely correct in saying that Brin and Page are Xers, not Yers and I changed the copy to reflect that. The key thought here is bi-generational leadership--Boomers collaborating with younger generations more in tune with the cultures of social media.
    Thanks for pointing this out.
    Bruce

  • Rob Underwood

    I'm encouraged by this article and the leadership of Google. Clearly bringing the best of Boomer, Gen-X, and Gen-Y thinking, experiences, passion, and skills is the right call and a sign of a mature, sophisticated leadership team.

    But the author's conclusion is that "We need B-Y leadership" (which I assume means "We need Boomer - Gen Y Leadership.") The author barely touches on the point that Larry Page and Sergey Brin, like many leaders of internet companies presently, are Gen-X (not Gen-Y). One could argue that the key to the Google story is that Larry and Sergey had the humility to know when they needed a more experienced Boomer to help them lead their company to the next level. Subsequently, they've had the vision to start growing the next generation of Gen-Y leaders who will be the future leaders of Google. I don't see this as an example of Boomer / Gen-Y leadership (who are the key Gen-Y players in this story?), so much as it is an example of Gen-X pragmatism.

    I'd like to think this isn't another cheap shot at the expense of the Xers (along the lines of Bruce's column from the summer - http://www.fastcodesign.com/16..., but it's hard not to notice that the author is using Google as an example of Gen-Y leadership when the principals in the story - Larry and Sergey - are Xers.

    The authors assertion at the start of this piece - that we need leadership alignment and leverage across all 3 generations - is more powerful than trying to use Google to extol the virtues of Gen-Y and Boomers working more closely together. Ignoring those who are in their 30s and early 40s – the prime of their careers – seems a bit silly, and perhaps a bit callous and careless. Generational archetypes such as those of Strauss and Howe are interesting, but ultimately it’s all about bringing great teams together regardless of age. Page and Brin get that.

    Rob Underwood
    http://twitter.com/brooklynrob

  • David Molden

    This is a breath of fresh air. I have for some time wondered how we never arrived at this conclusion before - co-operative relationships have worked elsewhere, so why not in corporates. Maverick (Ricardo Semler 1993) was perhaps an idea before its time.

    David Molden
    www.quadrant1.com

  • Dee

    It is true that the baby boomers must learn to listen and work with G-Y and G-X generation to take advantage of the fast-moving times we are in now. It is not just giving orders and instructions, management needs to listen and see things from different perspectives from their employees. Time has changed and the way things are to be done need to change too.

    - Dee
    http://www.lithospark.com

  • David Kaiser

    I like this idea. Boomers, Xers and Ys all bring different skills and perspectives to the table, this is particularly crucial in fast-changing industries (which is most, granted, but especially tech, design and other innovation-based sectors). This would require a lot of conversation and role-setting, but then, the best things always do.

    David Kaiser, Ph.D.
    Executive Coach and CEO
    www.DarkMatterConsulting.com

  • Jym Allyn

    Brilliant observation in that almost all of our national and international political and financial problems have been from "the curse of the CEO" in which corporate structures have mistaken position of authority for competence. One of the numerous reasons why many European companies are not financially over-extended is that the European tradition is that the Chief Financial Officer reports to the Board of Directors rather than to the Chief Executive Officer as traditional in the US. And the tradition of governance by lobby funding in the US has replace the "good-old-boy" system of back-room governance of many European countries, however, having our Congress sell its vote to the highest bidder seems to have made us MORE prone to irrational Ponzi financial schemes like Hedge-funds.

    As Pogo said, "We have met the enemy and he is us."

    Or to paraphrase Shakespeare, "First thing we do is kill all the bankers."