By Sara Jameson
During a recent keynote at this year’s CA Expo in Austrailia, Douglas Merrill said the six years he spent at Google as the CIO were the most fascinating part of his career. He made many mistakes and learned many valuable lessons that he shared with his audience. The following are some of the highlights of his keynote address.
According to Dr Douglas Merrill, companies that are stuck in traditional management practices risk becoming irrelevant and their leaders should not be afraid to do "dumb" things. Larry and Sergey developed a search product called Backrub and shortly after that the two launched Google as part of the Stanford domain. Most of the early Google hardware was taken from the trash and as the hardware they used broke all the time they refined their product and built a reliable software system. Everyone knew we shouldn't build our own hardware as it was 'dumb', but everyone was wrong. Sometimes being dumb changes the game.”
Merrill reflected that “Google was founded by two computer science students at Stanford and they hated each other at first. I found out they were both correct,” he said jokingly.
“There is a whole cottage industry of people talking about innovation, including all kinds of garbage… and I'm part of this cottage industry.”
He said a successful product is not about having perfect project management, rather “the more project management you do the less likely your project is to succeed”. This is very interesting insight as it sheds light on some of the early management practices at Google that may have led to their successes - get out of the way of the bright innovative people and let them do what they do best - innovate and engineer new systems and programs.
“It’s not about hardware and capex. Build your product and then figure out what to do with it,” he said. This sounds like a page out of the build it and they will come book. While I believe this may be true to some extent, you must really have a focused idea of at least where you are heading in order to get there.
Merrill cited the “fairly disturbing statistic” of 66 % of the Fortune 100 companies having either disappeared or are out of the list in the 20 years since 1990.
“Eastman Kodak is my favorite example. It has more patents than any other company on earth and is the most successful research company,” he said. “In 1990 a young researcher invented the charge coupled device which is the core of every camera today. His boss said you're a moron we make film.”
“The most important thing to take advantage of is to see innovation from everywhere – inside and outside.”
With information being democratized over the past twenty years, we have seen the price of hard drive storage drop by 2 million fold, Merrill said that businesses if they pay attention can emerge in a cheaper more efficient way. The open source movement is one very good example of this. It enables companies to start offering products and services while leveraging the collective efforts of the open source community.
While technology matters to “real” bricks and mortar businesses as much as online companies, Merrill said there are lots of examples of technology turning out “spectacularly badly”.
“Just because you can do something with technology that doesn't mean you should do something with technology,” he said. “You want to find cheap ways to get your customers to care about you.”
“McDonalds wanted to get people to come back to its stores so they ran an interesting marketing program with Foursquare where people could come to a restaurant and ‘check in’ and get a hamburger for free. That resulted in 25 per cent sales lift day-on-day and the total marketing promotion cost $18,000.
When Merrill left Google he worked at EMI records, which was interesting and enjoyable, but he knew the music industry was “collapsing”.
“The RIAA said it isn't that we are making bad music, but the ‘dirty file sharing guys’ are the problem,” he said. “Going to sue customers for file sharing is like trying to sell soap by throwing dirt on your customers.”
Merrill profiled the file sharing behaviour of people who used Limewire against the top iTunes sales and the biggest iTunes buyers were the same as the highest sharing “thieves” on Limewire.
“That's not theft, that's try-before-you-buy marketing and we weren’t even paying for it… so it makes sense to sue them,” he noted.
Merrill said it is also prudent not to listen too carefully to customers as so-called “focus groups” suffer from the Availability Heuristic: “If you ask a question the answer will be the first thing they think of.”
“You can't ask your customers what they want if they don't understand your innovation,” he said. “The popular Google spell correction came from user activity.
“Don't lose the ability to learn from the people who do the work. Pepple will do what you measure so make sure you measure the right stuff.”
On funding good people, Merrill recommends always “over hiring” and diversity matters.
“Diversity yields better outcomes. Hire someone who annoys you as they are more likely to be diverse and diverse practices are better,” he said.
“To win you have to make sure you don't lose. Change happens. To you, or by you so pick. The Fortune 100 companies which are gone all 'knew' what the answer was.”
According to Merrill, everything we learned in business from 1990 to 2010 was false.
“My company has zero capex and everything is in Amazon,” he said. “The single most common thing executives do is get in the way.” This really indicates that you can start the company on the cheap without large upfront capital expenditures. It is better to lead than to manage groups of individuals.
Merrill said the culture of secrecy in business is also a fallacy and people should talk about everything, well, almost everything.
“IT security people tell you what you can't say and HR people say you might hurt people's feelings, but the actual stuff you need to keep secret is small.”
These are some interesting and non-traditional insights into the management of IT. They may or may not work for your IT organization but some of the concepts may well be worth a try. Why not mix it up a bit in your organization and give it a try?
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