Case analysis paper(Subject: Leading Change)

Use the following questions to guide your analysis of the Google Project Oxygen case. Make sure to provide your positions AND evidence to support your positions:1.How would you describe Google’s culture? How were managers viewed before Project Oxygen?2.What kinds of people work at Google? What should be the role of HR in such a setting? What should be the role of managers?3.What is your evaluation of the steps that the PiLab took to:a.Identify the characteristics of effective managers at Google?b.Roll out Project Oxygen to the organization?c.Ensure that the Oxygen 8 attributes were widely adopted and practiced?4.What is your assessment of the Oxygen 8 attributes? What value (if any) do they provide? How generalizable are they?5.What should Setty’s priorities be going forward? Which of the proposed initiatives should he pursue? In particular, should he and his team take on the challenge of trying to create “truly amazing managers”? If so, how?
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For the exclusive use of N. Seelam, 2018.
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REV: OCTOBER 15, 2013
DAVID A. GARVIN
ALISON BERKLEY WAGONFELD
LIZ KIND
Google’s Project Oxygen: Do Managers Matter?
In November 2012, Prasad Setty, Google’s vice president, people analytics and compensation, was
smiling as he stepped into Union Square in San Francisco. Google executives had organized a
celebratory dinner at one of San Francisco’s top restaurants to recognize a cross-section of Google
employees who had been working on manager-related initiatives over the past several years. Setty’s
people analytics team was well represented at the dinner, and he was particularly proud of the
team’s work on Project Oxygen. The initiative had contributed to what Laszlo Bock, senior vice
president, people operations, had deemed ‘‘a revolution in people management at Google.’’
The Oxygen initiative had started with a fundamental question that Google executives had raised
in the early 2000s: ‘‘Do managers matter?’’ The topic generated a multiyear research project that
ultimately led to a comprehensive program, including surveys, feedback, training, and rewards,
designed to help Google employees become better managers. By November 2012, the program, with
its focus on eight key management attributes, had been in place for several years, and the company
could point to statistically significant improvements across managers overall.
Buoyed by the success of Project Oxygen, Setty was already thinking ahead. As he stepped into
the Google bus that would take the group back to Google’s Mountain View headquarters that
evening, his attention turned to his goals for 2013. He wondered how the people analytics group, and
the broader people operations group, could build on the success of this project. Now that they knew
what made a good manager, what other types of training could they create? Should they focus more
on senior managers who might require greater attention to leadership skills? Would it make sense to
hire differently? Should they invest more in helping managers get up to speed? These questions
flashed through Setty’s mind as he settled into his seat. He was tempted to start talking to his team
about plans for 2013, but then reminded himself that there would be plenty of time for those
discussions back at the office.
________________________________________________________________________________________________________________
Professor David A. Garvin, Alison Berkley Wagonfeld, Executive Director of the HBS California Research Center, and Senior Researcher Liz Kind
prepared this case. It was reviewed and approved before publication by a company designate. Funding for the development of this case was
provided by Harvard Business School, and not by the company. HBS cases are developed solely as the basis for class discussion. Cases are not
intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management.
Copyright © 2013 President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-545-7685,
write Harvard Business School Publishing, Boston, MA 02163, or go to www.hbsp.harvard.edu/educators. This publication may not be digitized,
photocopied, or otherwise reproduced, posted, or transmitted, without the permission of Harvard Business School.
This document is authorized for use only by Nikhileswar Reddy Seelam in MNGT733 Leading Change Spring 2018 taught by Dr. Wei Zheng, University of Wisconsin – River Falls from March
2018 to September 2018.
For the exclusive use of N. Seelam, 2018.
313-110
Google’s Project Oxygen: Do Managers Matter?
Company Background
Google was founded in 1998 by Sergey Brin and Larry Page, two computer science doctoral
students at Stanford University who developed an algorithm that ranked Internet search results
based on which sites had the most links directed at them. Within a year, Page and Brin raised $26
million from investors to turn the idea into a company, and in late 1999, Google moved into new
headquarters in Mountain View, California, dubbed the Googleplex. Page and Brin established an
informal culture from the very beginning: exercise balls were repurposed as moveable office chairs;
desks were made from wooden doors; and dogs were permitted at work. In addition, the founders
hired top chefs to provide free meals for all employees. The culture was designed to encourage
collegiality and to break down barriers to the rapid development of ideas.
Business Overview
By late 2000, Google had established partnerships with leading websites such as AOL and Yahoo!
and was responding to 100 million search queries each day. That same year, Google introduced a
keyword-targeted advertising program called AdWords. Advertisers could buy keywords, and
Google displayed the advertisers’ text ads when users entered those words in the search box. Google
found that its targeted advertising software provided click-through rates that were four times higher
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than the industry average at the time. Google’s advertising services enabled the company to start
making money, and by late 2001, Google was profitable. Page and Brin hired former Novell CEO,
Eric Schmidt, as Google’s CEO in 2001, and Page and Brin took the titles of president, products and
president, technology, respectively.
Google continued to attract paid advertising to its search services, generating $440 million of
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revenues and $100 million of profits in 2002. Headcount reached approximately 700, with nearly all
employees based in Mountain View. Google went public in 2004 (ticker: GOOG), raising $2 billion.
Revenues grew each subsequent year, and by 2011, Google had $37.9 billion of revenue and $9.7
billion of net income. (See Exhibit 1 for Google financials and headcount statistics.) New products
such as mobile advertising and productivity software were becoming increasingly popular,
complementing the core business of search and display advertising. After the IPO, Google made
several large acquisitions, including YouTube and Motorola Mobility. There was considerable global
expansion, and by 2012, approximately half of Google’s revenue came from outside the United States.
The company’s share price on November 30, 2012 was $698.37, resulting in a market capitalization of
approximately $250 billion.
Organization and Culture
At the time of Google’s IPO, the company had about 3,000 employees and was run as a
‘‘triumvirate’’ with Schmidt, Brin, and Page at the helm. By November 2012, Google’s headcount had
risen more than tenfold to approximately 35,000 employees; a year earlier Page had replaced Schmidt
as CEO. Employees were organized into three primary functional groups: engineering, global
business organization (sales), and general and administrative (G&A). Approximately one-half of its
employees were based in Mountain View, with the remainder spread throughout the world.
Google had an engineering-dominated culture. Eric Flatt, software engineer, commented, ‘‘We are
a company built by engineers for engineers.’’ Decision-making was described as ‘‘consensus driven,’’
and the organization was very flat. Many employees had similar titles, since Google had relatively
few managers (5,000), directors (1,000), and vice presidents (100), compared with other companies of
similar size. It was not uncommon to find engineering managers with 30 direct reports. Flatt
2
This document is authorized for use only by Nikhileswar Reddy Seelam in MNGT733 Leading Change Spring 2018 taught by Dr. Wei Zheng, University of Wisconsin – River Falls from March
2018 to September 2018.
For the exclusive use of N. Seelam, 2018.
Google’s Project Oxygen: Do Managers Matter?
313-110
observed, ‘‘Management in the engineering organization is highly constrained, by design. There is
only so much you can meddle when you have 30 people on your team, so you have to focus on
creating the best environment for engineers to make things happen.’’
For much of Google’s history, there were questions internally about the overall importance and
contribution of managers. Nadav Eiron, engineering director, explained: ‘‘Engineers generally want
to spend their time coding and debugging. Many think that talking to direct reports gets in the way
of getting that work done. And without training, some engineering managers have a hard time
striking a balance between providing direction and micromanaging.’’ Jennifer Kurkoski, people
analytics manager, commented, ‘‘There are many engineers—not just at Google——who tend to think
that managers are, at best, a necessary evil, and at worst, destructive.’’ In fact, Page and Brin once
asked Stacy Sullivan, director of people operations, if Google needed managers at all. Sullivan
recalled an early experiment:
Back in 2002, we had a few hundred engineers reporting to four managers. Seeking a
collegial culture similar to what they had experienced in grad school, Larry and Sergey
decided to create a totally flat organization—with no managers whatsoever. That experiment
lasted two or three months. Too many people went directly to Larry for things like approving
expense reports and resolving interpersonal conflicts.
Google supported its rapid growth in headcount with a rigorous, data-driven hiring process. The
company dedicated substantial resources to ensure that every person hired was top-level talent.
Resumes were screened for markers that Google had identified as key success factors for doing well
at the company, including extremely high levels of cognitive ability. Candidates who passed the
resume screen were then assessed for other attributes such as initiative, flexibility, collaborative
spirit, and ‘‘evidence of being well-rounded’’——all components of what made a candidate ‘‘Googley.’’
Executives believed that Google’s hiring filter was a critical component of the company’s success,
helping to create a cadre of extremely high achievers. Kurkoski described her group: ‘‘We are
hardworking, ambitious people. We are unrelenting perfectionists. We enjoy working together, and
we never want to let each other down.’’ Google had a culture in which good ideas were celebrated,
and authority was derived from peer respect. Chris Loux, head of global enterprise renewals, noted,
‘‘Managers here fail if they rely only on the authority of their position. Google has many young, high
achievers who crave autonomy.’’
Google had a relatively fluid organizational structure in which groups were created and modified
in response to product innovation and market needs. Sebastien Marotte, vice president, enterprise
EMEA, commented, ‘‘Everything at Google moves so fast. It is a highly disruptive, unpredictable
environment.’’ This dynamic led to frequent shifts in reporting relationships. Michelle Donovan,
director, people development, noted, ‘‘People move all the time within Google. It is not uncommon to
have three different managers over a two-year period.’’
Google offered generous compensation packages, including base salary, bonus, stock options, and
an extensive set of benefits and perks. In addition to providing free breakfast, lunch, and dinner, the
company offered free use of workout facilities. Office hallways were lined with video games and
foosball tables, and free courses were offered to all employees. Many employees likened the company
environment to a college campus. Comfortable Wi-Fi—enabled buses were provided to help
employees commute from the city of San Francisco to Mountain View. Google’s compensation
packages, perks, and retention levels were considered among the highest in Silicon Valley. Page
commented:
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This document is authorized for use only by Nikhileswar Reddy Seelam in MNGT733 Leading Change Spring 2018 taught by Dr. Wei Zheng, University of Wisconsin – River Falls from March
2018 to September 2018.
For the exclusive use of N. Seelam, 2018.
313-110
Google’s Project Oxygen: Do Managers Matter?
My job as a leader is to make sure everybody in the company has great opportunities, and
that they feel they’re having a meaningful impact and are contributing to the good of
society. . . . I don’t think it’s any of [the individual lifestyle perks]. It’s important that the
company be a family . . . We should continue to innovate in our relationship with our
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employees and figure out the best things we can do for them.
People Operations
Page and Brin envisioned a human resources function at Google that would extend well beyond
administering benefits and overseeing performance reviews. Laszlo Bock was hired to head up the
function in 2006 and named it ‘‘people operations,’’ or ‘‘people ops.’’ One reporter noted, ‘‘At the
heart of [people ops] is a sophisticated employee-data tracking program, and an effort to gain
empirical certainty about every aspect of Google’s workers’ lives—not just the right level of pay and
benefits but also such trivial-sounding details as the optimal size and shape of the cafeteria tables and
4
the length of the lunch lines.’’ A substantial portion of the group worked closely with engineering
and global business organization teams throughout the company in a role called ‘‘HR business
partners.’’
People operations helped manage the performance review process, which included regular
feedback to managers as well as annual 360-degree reviews. The group also helped manage and
interpret the Googlegeist survey, a comprehensive assessment that was completed by over 90% of
employees and evaluated how they felt about career development, perks, and benefits, as well as
company culture.
In 2007, Bock hired Setty from Capital One to head up a group within the people operations called
‘‘people analytics.’’ Bock challenged him to ‘‘apply the same discipline and rigor to people operations
that we use to manage Google’s business operations.’’ Setty recalled, ‘‘I didn’t want our group to be
simply a reporting house. Organizations can get bogged down in all that data. Instead, I wanted us to
be hypothesis-driven and help solve company problems and questions with data.’’ The group’s
mission evolved over time. Initially, it was ‘‘all people decisions should be made using data’’; later it
became ‘‘all people decisions should be informed by data and analytics.’’ Setty explained the thinking
behind this change:
We want to use data to eliminate bias in decision-making, but we don’t want data to
completely erase the role of personal judgment. A few years ago, we ran an experiment in which
we tried to use data to determine which engineers should be promoted. Managers weren’t
comfortable with that approach. They wanted data to help them make better decisions, but they
didn’t want a ‘‘black box’’ that used data to arrive at answers without human input.
Setty built out the people analytics team with PhDs who brought rigorous research methodologies
to the company. Three members of the people analytics group-Kurkoski, Brian Welle, and Neal
Patel—formed a small team called the People & Innovation Lab (PiLab). Led by Kurkoski, their goal
was to tackle questions related to the well-being and productivity of Google employees. In early 2009,
the PiLab shared its initial set of research questions with Setty, including ‘‘How can we encourage
employees’ savings behavior?’’ and ‘‘How can we improve the onboarding process for new hires?’’
Setty noted, ‘‘I remember meeting with the PiLab team in early 2009 to review all of their proposed
questions. While there were a few we wanted to pursue, one stood out from the rest. The team asked,
‘Do managers matter?’’’ Patel, former people analytics manager, and as of 2013 a technical project
lead with Motorola’s advanced technology and products group, elaborated: ‘‘We hoped the research
would help us determine whether managers impacted the performance of their teams. Like a lot of
4
This document is authorized for use only by Nikhileswar Reddy Seelam in MNGT733 Leading Change Spring 2018 taught by Dr. Wei Zheng, University of Wisconsin – River Falls from March
2018 to September 2018.
For the exclusive use of N. Seelam, 2018.
Google’s Project Oxygen: Do Managers Matter?
313-110
our work, it was an aspirational endeavor. We asked ourselves, ‘What if everyone had an awesome
manager-not just a good one or a competent one, but a truly amazing manager? What kind of results
would we see?’’’
Project Oxygen
The question of whether managers matter formed the basis of a broad research project undertaken
by the people analytics group in late 2009. Under the direction of the PiLab and with a core team of
Patel, Donovan, and Kurkoski, the project was code named Project Oxygen. Donovan and Patel were
Project Oxygen’s co-founders and co-leads. Naming internal projects was a time-honored engineering
tradition at Google that was soon adopted by other groups, as Patel explained:
I got the idea from a colleague who named one of his big projects after the X-Men. Soon,
I began putting ‘‘Project’’ in front of the name, both as a reference to the X-Men and to
the secret plans in the 1960’s TV show Danger Man. Then I started putting an element in the
periodic table after ‘‘Project.’’ So every project I worked on became Project Krypton or Project
Argon or Project Palladium. As we began wrapping up the research phase of ‘‘the manager
project,’’ Michelle thought we should give it a cooler name. She suggested the element oxygen,
because having a good manager is essential, like breathing. And, if we made managers better,
it would be like a breath of fresh air.
Patel also recalled, ‘‘We knew the team had to be careful. Google has high standards of proof, even
for what, at other places, might be considered obvious truths. Simple correlations weren’t going to be
enough. So, we actually ended up trying to prove the opposite case; that managers don’t matter.
Luckily, we failed.’’
Research
The Project Oxygen team started by reviewing the data that had already been collected when
employees left Google to see whether management issues were cited as one of the reasons for leaving.
They found some connections between low satisfaction with one’s manager and turnover rates, but
given the low overall turnover at the company, they did not feel the data was robust enough to
extrapolate to the general population at Google. Moreover, a correlation between satisfaction with
one’s manager and retention wasn’t enough to prove that managers were the cause for attrition. Patel
addressed this by examining a cross-section of high-scoring and low-scoring people managers based
on a combination of Googlegeist ratings and performance review scores. ‘‘High-scoring’’ managers
were those in the top quartile (top 25%) on both measures, and ‘‘low-scoring’’ managers were in the
bottom quartile of both. Patel explained:
At first, the numbers were not encouraging. Even the low-scoring managers were doing
pretty well. How could we find evidence that better management mattered when all managers
seemed so similar? There was really no reason to expect any differences in team performance
or team member satisfaction between the two, ostensibly similar, groups. But since we didn’t
expect to find any differences, even small differences were impressive. It turned out that the
smallest incremental increases in manager quality were quite powerful. Good managers do
matter.
5
This document is authorized for use only by Nikhileswar Reddy Seelam in MNGT733 Leading Change Spring 2018 taught by Dr. Wei Zheng, University of Wisconsin – River Falls from March
2018 to September 2018.
For the exclusive use of N. Seelam, 2018.
313-110
Google’s Project Oxygen: Do Managers Matter?
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