Work Rules! Summary and Review

by Laszlo Bock
Has Work Rules! by Laszlo Bock been sitting on your reading list? Learn the key ideas in the book with this quick summary. We can all agree that working at Google is a dream job. It’s more than the lure of great stock options or the fact that Google has been voted the best place to work multiple times. Google somehow gives it employees the feeling of personal freedom at work, and allows its employees to work at their highest capacity while being surrounded by extremely bright minds. How did Google get this way? This workplace culture didn’t appear out of thin air. This famous culture is the work of Google’s People Operations, which is their HR department and one of the most innovative in the world. Over the course of this book summary, you will discover what makes Google special in the opinion of Laszlo Block, who is the head of People Operations and a champion of Google’s in-house culture. In this summary of Work Rules! by Laszlo Bock, you’ll learn
  • why you should pay people unfairly;
  • how cash rewards make employees unhappy; and
  • the best way to hire and retain the best candidates.

Work Rules! Key Idea #1: Its mission, transparency, and voice is the key to Google’s in-house culture. 

When you imagine what it would be like to work at Google, you probably see beanbags, free food, and other amazing perks. Though these freebies add an element of fun and comfort, it’s actually Google’s mission, transparency, and voice that make it so successful.  Simple and powerful, Google’s mission is as follows: “to organize the world’s information and make it universally accessible and useful.” This mission is profound because to start it gives moral to the employees rather than placing commercial value on their work. This means that the information employees spend their time sifting through actually helps everyone who makes use of Google.  Also, the mission does not have a ceiling. Some missions use goals that one attained, there’s nowhere else to go, and therefore the mission is rendered uninspiring. However, at Google employees are pushed to continue to explore new ways of organizing information, a goal with no set end.  Transparency is another key principle of Google’s successful culture.  In the majority of software companies, a new employee will likely only have access to the specific code that they’re working on. At Google, though, a new engineer can access much more information, such as another employee’s weekly status report or product launch initiatives.  In addition, the CEO updates the entire company weekly, and spends 30 minutes hosting a Q&A session. Without this update, no one would know who’s working on what; but with it, Google furthers its promise of transparency. This transparency increases efficiency overall by ensuring that people are not unnecessarily doubling up on work and by making clear who is the point person on each project.  Finally, Google makes sure every employee’s voice is heard. The company as a whole values everyone’s input, and allows them a stake in how the company is run.  In fact, many practices within the company originated from employees. In 2009, a program called Bureaucracy Busters was launched which allows employees to air their grievances. 

Work Rules! Key Idea #2: Look beyond people’s degrees and focus on training in order to hire the best people. 

How did Google create such a healthy culture? They started by employing incredible people. Discover how they found these employees below.  Two ways exist to have an exceptional employee: hire the best or train the average. Google tends to do the former, as you may have guessed.  The average company spends around $600 for training and $450 for hiring, according to the Corporate Executive Board. This is all wrong, though.  When hiring a great candidate, the worst case scenario is that they underperform and end up working at a mediocre level. But, when hiring an average candidate, the worst case scenario is elevated, since this candidate might work at a below average level and will drain a large amount of resources associated with hiring and training.  Because of this, Google spends a considerable amount of time and resources in order to find the perfect candidate for the job. They only hire about 5,000 people a year from one to three million applicants, making them extremely selective. To be clear, that’s a hiring rate of about 0.25 percent. Compare this to the acceptance rate of the extremely competitive Harvard, which has a 6.1 percent acceptance rate. This acceptance rate seems relaxed compared to Google!  So what should you look for in a candidate? When Google was first starting out, they would hire about 100 people a year and the candidates they were looking for were Ivy League graduates. But over time, the company realized that some of the best employees didn’t attend the most renowned schools.  Google shifted its technique, and began looking for candidates who showed resilience and the ability to overcome obstacles rather than only looking at candidates from top schools.  The sought out those who could perform at a high level, but who could also push those around them to succeed as well.  The hiring process at Google requires hiring staff to sift deliberately through the top performers in the field.  The current VP of People Development at Google, Karen May, formerly owned her own HR firm, and actually turned down offers to work at Google time and time again. Google was convinced of her value as an employee, though, and continued to pursue her until she finally accepted a job with the company. 

Work Rules! Key Idea #3: Let your people run the show with the assistance of data. 

In a traditional company structure, the manager controls other employees’ workload, salary, promotions, and sick days, among other things. But, most companies also want employees to demonstrate autonomy, individuality, and initiative at their jobs as well. See the issue?  If you want your employees to take ownership of their jobs, follow Google’s lead by getting rid of status symbols and minimize hierarchy amongst you employees. New employees and the senior executives at Google receive the same support, such as resources and funding. There are only four levels of hierarchy across all of the Google employees: individual contributor, manager, director and vice president. Employees at Google are encouraged to lead and influence through inspiration. If you want a VP title, you need to show that you can lead both people and projects first.  However, as with any project, even if the employees are empowered to show ownership, there still needs to be someone who is making the final decision. In this case, as a manager, use data as opposed to your opinion. Making decisions this way is more transparent to everyone involved and is less biased. One of Google’s core principles expresses this idea: “Don’t politick. Use data.”  Not only does this motto help things stay transparent, it also helps address potentially sensitive topics when damaging rumors may be involved.  Promotion can be a sensitive topic in every company, especially when rumors or gossip surrounds it. The Google VP in charge of people uses data in order to show that biases are not the basis for promotions. For instance, many people believe that working at Google’s HQ would ensure a quick promotion, but her data proves that the rate of promotion at HQ is about the same as at other Google offices.  With explicit data and open discussion, an increase of power for employees is effective, and often results in the best ideas being implemented. In this technique, the reasoning behind promotions is clear, even to those who may not fully disagree. 

Work Rules! Key Idea #4: Opportunity for your company can be expressed through both your best and worst employees. Seize the opportunity! 

There’s a classic pattern in the majority of office settings when it comes to employee performance: a select few top performers experience the majority of the successes, and everyone else trails behind with their performance decreasing over time. Your best and worst performers encompass the two ends of the performance bell curve. Both groups make up the minority, since the majority of employees make up the middle part of the curve, where average performers fall. Most companies will fire their poor performers in favor of hiring new employees who will need extra training and are not guaranteed to perform higher than the previously fired employees. A lot of companies also don’t fully utilize their top performers, which is almost worse.  How does Google utilize both ends of the curve? They put their top performers under a microscope to study them and give help to those towards the bottom of the performance curve.  It doesn’t occur to most companies to study their top performers, but this is a mistake because those are the people who are most familiar with and successful at the company’s practices.  So how do you study your top performers? Boris Groysberg, a Harvard professor, has research that shows performing highly is dependent on context, so you must study your own employees rather than the structures of other corporations.  Google did exactly this, and used an internal research team called PiLab or People and Innovation Lab, to study their top performers. Project Oxygen was a project produced by PiLab in order to express how an exceptional manager is essential for top engineer performance. In fact, the employees working under the best managers tend to work at 5 to 18 percent better than employees working underneath a weaker manager. In this research, PiLab also determined what the best qualities in a manager are in order to teach underperforming managers. Another thing that Google recognizes is that poor performance can often be attributed to a lack of skill or motivation, which may stem from factors outside of work like in employees’ personal lives. However, it might also indicate a bigger issue with the team as a whole.  Finally, Google regularly evaluates who the bottom 5 percent of employees are and offers them extra training or support, or tries to find a place within the company that may be more suited to their skills. 

Work Rules! Key Idea #5: Don’t waste resources on bad training. Instead, use the best teachers within your own company. 

$156.2 billion. That’s the dollar amount spent on training programs at American companies in 2011. However, most of this money spent on training goes down the drain. Why is this? This happens when the training is run by the incorrect people, is ill-designed, not specific enough, or is not analyzed for effectiveness.  Specific information should be delivered during training. This will aid in retention rate of the material. The 10,000 hour rule states that it takes that amount of time to become an expert in any specific task. But, research by Anders Ericsson says that the most effective way to master a skill is to break down the work into smaller tasks so you can aim for specific improvements i each small task through repetition, feedback, and correction.  A global consultancy firm, McKinsey, succeeds at this. McKinsey sends all of its second year consultants to an Engagement Leadership Workshop where they receive training on dealing with angry clients. The workshop begins by teaching the basic principles of customer service, and then the consultants take part in a roleplay scenario. They then watch and discuss a video of their training. This process is repeated at the workshop until the consultants demonstrate the desired behavior.  Thought this training is expensive and intensive, it ensures that each and every consultant comes out of the other side with the ability to cope with all customer situations and excellent standards for customer service. McKinsey knows that the most effective way to measure the success of training isn’t by the time or money spent, but by an improvement in employees’ behavior.  So who should you hire to train your employees. Here comes the good news: they’re already at your company.  When Google needs someone to train new employees in sales, they look to the sales manager with consistently high numbers and requests that they instruct lower performing or new sales representatives.  Not only does it cut costs when employees train other employees, but it also creates a close-knit community among people working towards the same goal. The people most qualified to understand the sales structure at Google are the people in sales at Google! 

Work Rules! Key Idea #6: Why does Google sometimes reward failure and pay people unfairly? 

Compensation is often a contentious issue; so how does Google approach it?  Companies are often trapped in pay ceilings for each position and are bound by “fair” payment to all employees due to regulations that state that there may not be more than a 20 percent discrepancy between individuals in the same position. Sadly, this structure causes top performers to seek better compensation elsewhere.  Reportedly, Bill Gates stated that an exceptional coder is worth 10,000 times more than an average coder. Google shares this mindset, which might be why their pay structure is sometimes perceived as “unfair.” For example, one employee might get a stock award of $10,000, while another worker in the same position may get a stock award of $1 million. Also, a top performer in a junior role may receive a higher compensation than a more senior employee who performs averagely.  Another tactic that Google learned to help retain employees is to offer experience rather than money.  Google established its Founders Award for performance in 2004. In the award’s first year, Google awarded $12 million split between two teams, and $45 million divided among eleven teams the following year. However, internal surveys demonstrated that this did not increase the happiness of Google employees, and it was actually the opposite. This led to individuals looking for other jobs where the chances of receiving a generous reward was higher.  Google’s mistake was that rewarding cash didn’t bring the teams together. Instead, they should be awarding teams with experiences, like a team dinner or a team trip to Hawaii. These experiences often created more memories and brought team’s closer together.  Google didn’t simply give awards when expected, however.  Google announced a real-time collaboration tool called Google Wave in 2009. The team that worked on it decided to forgo their bonuses for two years in favor of the possibility of higher wages if the program succeeded. However, it unfortunately failed. Google rewarded the team anyway. Why did they do this? Innovation, one of the most important aspects at Google, means delving into the unknown, which doesn’t ensure success. People should be awarded for taking calculated risks, even when they don’t pan out. 

Work Rules! Key Idea #7: Like Google, you should confront the dark side of your culture head on. 

Google has shown us how empowering employees, transparency, and allowing workers a voice can lead to success. However, these practices sometimes backfire. When this happens, Google knows how to handle it.  Each year, Google suffers one major leak. When this occurs, Google investigates the leak and the guilty party is found and fired. Google then announces to the entire company what has been leaked and what happened to the employee who caused the leak, either on purpose or on accident. The cost of a leak is a drop in the pond relative to the benefits of the transparency that the company values and upholds.  SInce Google’s culture encourages innovative thinking, there is often a big influx of ideas. This influx needs to be pared down frequently to keep the company running efficiently.  Infact, more than 250 products were launched and subsequently scratched in between 2006 and 2009.  Larry Page, Google’s CEO, is responsible for the annual spring cleaning of ideas or products that are not succeeding or don’t have great market prospects.  Through transparency, Google expresses why each product or idea is being discontinued, and this helps maintain its focus and direction while keeping everyone happy.  The last thing that can go awry is funnily company perks. Google is famous for the benefits its provides, and everyone typically begins by being delighted. But over time, some employees can develop a sense of entitlement.  For example, when the cafeteria began to use smaller plates, on grumpy employee began throwing away forks in protest while others actually threw food at the cafeteria staff.  Meatless Monday was launched to benefit employee health, and this was the last straw. After a month of the program, one employee threatened to move to Twitter, Facebook, or Microsoft in an anonymous survey. Google shared these survey results with all its employees, and many staff were embarrassed by this person’s actions. Consequently, the level of entitlement and abuse fell drastically. 

In Review: Work Rules! Book Summary

The key message in this book: It’s clear why everyone want to work at Google. They understand how to both hire and retain high performing staff, and use the experts present in their company to train. Google also gives power to its employees and keeps them happy and challenged at their jobs. By reviewing these strategies, you too can lead and maintain a successful company.  Actionable advice: Hire in teams. Confirmation bias often leads an individual to heighten their opinion of people who share their own beliefs. In an interview setting, this can cause employees to bring on new hires that simply echo their own beliefs. Avoid this trap when you are hiring new employees by constructing a team to conduct interviews. When you have more than one opinion or type of thinking in the room, you’ll end up with a more diverse team.  Take your time. The hiring process can sometimes be frustrating, especially if you’re on a time crunch. But, being patient and waiting for the best candidate can save time and money down the road, since funds won’t be wasted on a subpar candidate.  Suggested further reading: How Google Works by Eric Schmidt and Jonathan Rosenberg How Google Works shares business insights from Google, one of the most successful companies in history. The former top executives of the company came together to write this book, and they lay out the path to Google’s success step-by-step, creating a roadmap that you can follow in your company as well.