A quick take on Google's Alphabet Strategy

Google’s Alphabet Strategy is awesome. It makes complete sense because of the following 3 reasons –

1. Will Help Decouple Purpose/Mission

While relentlessly pursuing its mission to organize the world’s information and make it universally accessible and useful, Google has also acquired bunch of great companies over the last decade. A prime example is NEST which is on a mission to make a conscious home. The two missions are different (not completely though) and demand varying sets of principles and activities to achieve them. With the reorganization announced yesterday, I believe that all the 26 alphabets can comfortably (read independently) pursue their varying yet compelling mission statements.

 2. Decentralized Processes will help unleash Google's potential 

We all have heard over and over again that as companies become bigger they become less innovative (and also sometimes, less competitive). Risk Appetite goes down, complacency peeps in, real innovative ideas get filtered/left out in one of the many evaluations, and so on and so forth. The Alphabet approach, which essentially breaks Google into parts, is a smart way to solve that challenge. Phew, No more Innovators’ Dilemma in play for Google! Each alphabet can now design and customize its own internal processes to spur innovation and stay competitive. Going forward, I foresee each sub entity working hard to prove its worth to maintain its ownership of the assigned alphabet.   

3. People (Good Talent) will get what they want 

Talent War, as they say, is most evident in the silicon valley. Google, once a beneficiary of this war, has recently lost its talent pool to companies like Facebook, Twitter, Apple, Amazon, and others because of a combination of higher compensation and senior/better roles that promise learning and professional growth. Within the new alphabet structure, the span of control and the span of responsibility of a great number of high potential employees will increase significantly providing them with opportunities to learn, grow faster and make a difference. Moreover, not only can the employees chose to stay in one alphabet (say N) and make it (N) the most shining alphabet, but also they can consider switching between alphabets (instead of switching from “Google” completely).

That said, since the last 12 hours after I read the announcement of Alphabet, I have been thinking that Alphanumeric (a#) could serve a better name of the new parent entity. Alphanumeric, though a bit geeky, sounds more sexy and would aid scalability – say, N1 for Nest, N2 for Nxx, N3 for Nyy.

Alphabet or Alphanumeric – Am bullish on Google’s awesome move!

Thoughts?