Peter Kafka

Recent Posts by Peter Kafka

Google Says Google’s Perks Are Overrated, and Belt-Tightening Is Underrated

google danceHey Googlers! All those perks the company is famous for: The great food, the high-end daycare, the fancy bathrooms? Overrated, your bosses say. So is the dream of getting insanely wealthy at your job.

Instead, Google CEO Eric Schmidt said today, you ought to be happy to work at Google…because it’s Google. In that sense, Schmidt said, the recession of the past year has been good for the company since it has highlighted the difference between working at his company and other options–including not working at all.

Schmidt’s comments came during a press conference he and Sergey Brin held today, which was wide-ranging and went down several interesting avenues. I’m reproducing a long chunk of it here from my recording of the chat, because I think it addresses one of the core challenges Google (GOOG) has: How to keep the innovative energy and intelligence the company had from its garage start-up days now that it’s a 20,000-person monster.

Google has been grappling with this for quite some time, but the challenge became more evident in the last year or so as the company began cutting back on perks like free food and low-cost child care, and even made its first-ever layoffs. (The photo at the top of this post is from the 2008 version of the company’s annual “Google Dance,” which was canceled this year).

Those moves were made in response to the economy, but they also did double duty by helping the company “reset the culture,” Brin said.

The exchange kicked off when a reporter asked the duo about a sense of entitlement among Google staff, in reference to a passage in Ken Auletta’s new book about the company.

Brin: I do think there was a period of time where the culture, as it were, was misinterpreted. I certainly remember when we would start, when there were a  few of us working in the garage, and occasionally [co-founder] Larry [Page] would rollerblade in with a few sandwiches for food. And that grew up into everybody’s expectation: “Oh, they should have all the gourmet food they want, at any time.”

I think it’s important to reset the culture from time to time. And I think several years ago we did that. Clearly, people had extrapolated from our past practices what the vision might be. And having actually been there, and knowing the rationale…we decided to, for example, we significantly cut down all the snacks that had been available. [laughter]

[The question is reframed: Isn’t the real perk at Google supposed to be stock options, and aren’t those much less valuable, now that the company’s go-go growth days are over?]

Brin: Well, I don’t know. it depends on where in the graph you look. Certainly it has fluctuated ever since we’ve gone public. Up and down, so…

Schmidt: Let’s say this: It is axiomatic that the best thing to do is to found a multibillion-dollar corporation with free stock, take it public and have the difference between zero and the stock price….That would be the maximum gain possible. For most people, they don’t have the wherewithal and the skills to do that.

Brin: Or the luck.

Schmidt: And luck. Yes, I suppose. In your case, I think, skill and brilliance. People make decisions….The way to state this is that Google pays very well. Google is clearly a growth company, by any metric. And people at Google don’t work for those reasons at Google. We don’t want them to come to Google for those reasons. We want them to come to Google to change the world.

Life is short. And everybody here understands that. Life is short; you should work on the things that are most important. If you want to work on what Google is working on–cloud computing, search, all the things that we talk about all the time–then come to Google and we will pay you well.

That works. We don’t want a different workforce than the one that I just described.

And I would also answer the entitlement question, as I understood your question, as to say that the last year has been very good at solving that problem.

The tightening that [CFO] Patrick [Pichette] in particular did, who I think is the current Google hero, really did change the culture in a much more pragmatic way: “We’re happy to work here. We’re happy to be employed. We love what we’re doing. Our friends, you know, have been laid off.” It’s been a maturing process. And I think a generally good one.

[Image credit: permanently scatterbrained]

Latest Video

View all videos »

Search »

I think the NSA has a job to do and we need the NSA. But as (physicist) Robert Oppenheimer said, “When you see something that is technically sweet, you go ahead and do it and argue about what to do about it only after you’ve had your technical success. That is the way it was with the atomic bomb.”

— Phil Zimmerman, PGP inventor and Silent Circle co-founder, in an interview with Om Malik