The 7 ways Google does decisions

 In Business decisions, Decision-making, Insights

Most of us know the rough outline of the Google story, from garage to world beater. But do you know how they made the key decisions in their business? It turns out that they have 7 key factors which aid them in making decisions.

1. Vision & Values

They have a clear vision, to make the world’s information accessible and useful. And they have one overarching value, Don’t Be Evil. These strong sentiments informed one of their biggest decisions: to pull out of China because they didn’t want to submit to the Chinese governments conditions around privacy and censorship.


2. Diversity

Whilst they have a very strong culture and recruit people based on how “Googly” they are, Google make a huge effort to recruit a diverse bunch of people with interesting and varied backgrounds. This brings diverse points of view to the table.


3. Candour

At Google, anyone can say anything – pretty much. Employees are all allowed to comment on ideas, send thoughts in, and disagree with the senior people. In the first few years they would have all-of-company meetings to review products and people would bag out products – if they had good reason.


4. Dogfooding

A peculiar term used in Silicon Valley – it means trying your own products. All Google products are released company-wide and everyone can try them and feedback. This goes hand in hand with their build-test-learn approach of releasing beta products which has more in common with the lean start up philosophy than a typical major corporation’s approach.


5. Being clear who’s in charge

In the first few years at Google, and even now, it is very clear who is making the decision. And it was clear how they would make the decision most of the time: based on evidence, and with an engineering slant. Having a clear and fair process creates much more buy in from employees who need to execute on decisions.


6. Having different teams working on the same issue.

When Google had to decide the initial valuation for their float, they had 3 teams work on estimates independently and then Eric Schmidt averaged their valuations and went with that. This is a highly effective but unusual technique which I recommend to people for high impact decisions.


7. Mistakes are ok

Many Google products get released every month, and even some of the big ones don’t make it. It’s ok to make mistakes at Google, they churn out enough innovations that they don’t all have to work. Orkut, their first stab at social networking did not take off. Except in Brazil where it’s number 1 strangely.


These 7 approaches are actually well researched fundamentals of decision-making. I don’t know if they designed them into the business knowing it would make for better decisions, but I suspect they did.

When they famously nearly accepted $1m bid for their company in the early days, their ultimate refusal to sell was an awesome decision. What you see at Google is a focus on evidence, testing, diversity, values. And not so much of the gut feel, Groupthink, bow-down-to-the-leader, only-listen-to-the-loudest-people issues that we commonly find in other companies.

So, if you want to be more like Google than Dunder Mifflin, start thinking about how your company makes decisions. You don’t need to be the next Google…you just need to make better decisions. Because McKinsey showed that companies in the top quartile of decision-making generate 7 percentage points more return on capital than those in the bottom quartile.

Posted by Rob Pyne