The Wasted Times of Google (part 3)

(Continued from part 1 & part 2)

To paraphrase an old Chinese saying: Great companies achieve greatness not because of their grand buildings, but because of their grandmasters. If you ask most CEOs what their company's most precious asset is, nine out of ten would answer "talent."

In Google’s early days, engineers indeed felt their importance within the company. In 2005, when I was at Microsoft, I used a CRT monitor, a now rare sight, and didn’t have a laptop. Whereas at Google, the standard setup for engineers back then included two LCD monitors and a choice of a Windows or Apple laptop in addition to a desktop. Not to mention the widely-known free meals, snacks, massages, dry-cleaning service, etc. Although these are all aimed at enhancing work efficiency, Google indeed gave employees a feeling of sincere respect and warmth.

At Google's weekly company-wide TGIF meetings, the founders and CEO would openly take arbitrary questions from employees and strive to provide comprehensive and earnest answers. Executives would voluntarily share the inside workings of the company, building a sense of trust among the employees.

When Google was still providing stock options as an employee incentive (which was later replaced by stock grants), there was a year when the stock was lackluster, resulting in GOOG’s market price lower than the option exercise price. Essentially, some of the employee stock options became worthless, and some people left. Google's management then made a decision to reprice the options.

For instance, let's say employee Wang initially received an option of 1,000 shares at an exercise price of $300 per share, but now GOOG’s market price has fallen to $200, rendering the option worthless. Even if the stock price returns to $300, the option will still be worthless.

However, after the repricing, the exercise price drops to $200. So, if the stock price rises to $250 in the future, Wang’s option of 1,000 shares would now be worth $50,000, and if it goes back up to $300, Wang could earn $100,000.

Furthermore, to amplify the value of these options for employees, Google even made them transferable.

Normally, options cannot be transferred - when Wang received his option, he could only profit by buying shares at the exercise price and then selling them at the market price. After Google made the options transferable, Wang could also choose to profit by auctioning off his option shares to financial institutions. The profits obtained in this way usually exceed the profits from normal exercises.

In order to realize this benefit, Google even went through the trouble of setting up an internal option trading market.

Of course, the company made these changes with the aim to boost morale and retention, aligned with Google’s own interests. Still, it’s hard not to notice the company's appreciation and sincerity towards its employees.

In such an atmosphere, employees naturally brimmed with energy - how could they not want to do their best?

Who could predict that a decade later, Google would undergo its first layoff? The process was abrupt and brusque:

Employees received a chilling, unexpected email late at night and immediately lost access to company resources. Many who were laid off had been working for Google for a long time, and deeply identified with the company's mission. For them, this layoff meant the loss of not just a job, but a career they were emotionally attached to for years. The generous severance payouts could not compensate for the emotional wound.

Why couldn’t it be handled with more care? Why couldn’t managers deliver the difficult message face-to-face, looking into their report’s eyes, offering comfort?

There's a moment in the very first episode of the first season of "Game of Thrones", where Ned Stark, the Warden of the North, explains to his son Bran why he executed the deserter personally: "If you would take a man’s life, you owe it to him to look into his eyes and hear his final words. And if you cannot bear to do that, then perhaps the man does not deserve to die. A ruler who hides behind paid executioners soon forgets what death is."

If the CEO of a company says, "I made mistakes that led to the current situation, and I take full responsibility for that", yet they continue receiving substantial bonuses and make employees pay the price, what message does that send?

It can only reveal starkly (pun intended) to the employees this: they are merely tools for the company, summoned and dismissed at will, and shouldn’t think too highly of themselves.

How can such employees be loyal to the company?

I admit that many departments at Google have more employees than necessary, and slimming down is inevitable. In fact, Google has long been overly tolerant of underperforming employees. Those who have been managers at Google know well how challenging it can be to let an underperforming employee go. This over tolerance is a major factor behind Google’s loss of vitality. However, such slimming down should be performance-driven, aiming to weed out unqualified employees, rather than cutting back by projects.

Google has always stressed its intent to hire "generalists", talents with rapid learning ability, rather than staff for specific positions. This is because, in the rapidly evolving computer industry, employees must be able to quickly adapt to new directions in the company's development.

If we are to believe Google's message, laying off staff based on projects won’t cut it. Suppose an excellent employee's project does not align with the company's vision. They should be allowed to rapidly learn and transfer to a project that the company deems important. Why should they be shown the door, while employees with lower performance remain?

Once a company begins layoffs, it affects more than just the employees being let go. Everyone left will ponder if they are next in line. Winter is coming, and survival is crucial. With the uncertainty of when the next round of layoffs will come, everyone's priority naturally leans towards job security, striving to ensure their project isn't cut. Who would dare to initiate a high-risk, high-reward project knowing it could jeopardize their job?

(Continue to part 4)