By Laszlo Bock
(12 Books, 406 pages, $33)
Move over GE. Google has taken your spot.
General Electric remains a powerful company. But there was a time when it was even more: The model for modern leadership, with a profusion of books offering lessons from within its walls. These days, Google reigns. Communications consultant Jeff Jarvis treated us a few years ago to What Would Google Do? Insiders Eric Schmidt's and Jonathan Rosenberg's superb How Google Works was published last year and colleague Laszlo Bock's Work Rules! recently hit the bookshelves.
It may seem a bit much, particularly for a young company that we view primarily as a search engine – what could it offer us in our business, particularly if we're not tech-based? But Mr. Bock is senior vice-president of people operations for the company, and if you have more than just a few employees in your firm, he has some insights you might borrow. Even better, Google is data obsessed, and a lot of his ideas are not based on hunches or personal preference (although they may have started that way) but invariably researched through experiments to see the impact of the policies on Google's staff.
Let's start with your training budget. If you are spending big bucks on training, you're probably patting yourself on the back for investing in people. He says a large training budget is usually a sign that you failed to hire the right individuals to begin with. "At Google, we front-load our people investment. This means the majority of our time and money spent on people is invested in attracting, assessing, and cultivating new hires. We spend more than twice as much on recruiting, as a percentage of our people budget, as an average company. If we are better able to select up front, that means we have less work to do with them once they are hired," he writes.
That means hiring more slowly. You want to consider more applicants – don't narrow the field too quickly; keep looking – and have a lot of interview stages. In fact, that may be even jumping the gun since the best people probably aren't looking for a job. So you need to find them and, over time, sell your company and possible openings to them, until they take the bait. Karen May, Google's vice-president of people development, turned him down for four years until he brought her on board. "It takes longer to find these exceptional people but it's always worth the wait," he insists.
Only hire people who are better than you are. And make sure managers give up power in the hiring process. They are biased and shouldn't be offered that much authority over individuals on their teams. Indeed, hiring committee members recuse themselves if the person would be on their team, leaving it for more disinterested souls to make the selection.
The best predictor of how someone will perform on a job is a sample test, so wherever possible that is done. Next best are tests of cognitive ability and carefully structured interviews. Interviewers not only score candidates but also are scored themselves – they're told how many of their preferred candidates made the final cut, as a nudge to improve. (Google believes in nudging people toward better behaviour, and he devotes a chapter to the effort.)
He urges you to set a high bar for quality. Before you start recruiting, decide what great would look like for this position. "Do not compromise. Ever," he says.
Some other tips:
Calibrate employee assessments. After the manager provides a draft rating, he or she sits down with colleagues and they review their employees together to check that the assessments are fair. Before they start, they are reminded of the kinds of cognitive biases common to assessments – such as the tendency to remember the last few things someone did and weight those disproportionately – to nudge people to be more open-minded . "Calibration adds a step. But it is critical to ensure fairness," he says.
Find out who your best and worst people are. Then put your top people under a microscope, to learn what makes them exceptional, and figure out how to inject those factors into laggards. Google talks to each of its lowest 5 per cent of performers, not in "shape up or ship out" discussions but to collaboratively develop skills further or find a more appropriate role.
Pay unfairly. Your best people are better than you think and worth much more than you pay them.
Give your employees lots of benefits, like on-site haircuts, car washes, and dry cleaning. But in most cases, keep the cost to the company minimal by having employees pay. The company arranges, say, to have a hair cutter on site and employees are content to pay the cost. (Where Google spends big: Free meals on site and very generous benefits to survivors of a staffer who dies, including 50 per cent of salary for 10 years.)
There's more. So much more. The book is like a handbook on HR practices, with many provocative ideas and lots of eye-opening research through experiments the company has run.
Marketing consultants Adam Morgan and Mark Barden sing the praises of limitations for sparking innovation in A Beautiful Constraint (Wiley, 277 pages, $36).
In The Open Organization (Harvard Business Review Press, 227 pages, $37.50) Red Hat CEO Jim Whitehurst explains how open principles of management based on transparency, participation and community can reinvent your organization for our fast-paced world.
The Head Game (Liveright, 266 pages, $31) by Philip Mudd, former deputy director of the CIA Counterterrorist Center, uses his experiences to explain how to be more effective with your analytics and decision-making.
Harvey Schachter is a Battersea, Ont.-based writer specializing in management issues. He writes Monday Morning Manager and management book reviews for the print edition of Report on Business and an online work-life column, Balance. E-mail Harvey Schachter