Managing Chaos

I recently listened to the Masters of Scale episode where Reid Hoffman interviews Eric Schmidt.

The topic of the day was "managing chaos".

Drawing on his experiences at Google, Eric believes that a young company needs to embrace chaos as an idea generation mechanism. At Google, this led to many early breakthroughs, including the original Google Ads auction model, and was later institutionalized into 20% time.

Some nuggets that stayed with me were:

  • Rapid decision making is key. One will inadvertently make mistakes, but this is better than the alternative. Google embodied this (at least in the early days): according to Eric, they made the decision to buy Youtube over 10 days.

  • Google's culture began by emulating grad school. Rooms seated four each, brilliant individuals hung out all day, and there was a sense that they were about to discover something new.

  • Mark Pincus, Zynga's founder, has an interesting line: "you have to learn to separate your winning instincts, from your losing ideas". He learned the hard way to not be married to ideas (by failing at his first company). He now tries many things, and does not shy away from walking away. This ties into the idea of "managed chaos", and allowing anyone in the organization to challenge ideas and provide their own.

  • Eric uses the language of 'smart creatives' to describe employees at Google. Google found that persistence, paired with curiosity, were the strongest predictors of employee performance. They evolved their hiring system to find these people.

  • Eric believes that it's important to realize when you have hit the mark, and switch immediately from ideation to execution. This point came for Google when they stumbled onto the success of their ad auction model. They expanded rapidly across Europe, and owe much of their dominance to moving fast in those early days.