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17 March 2008

"The Google Enigma"

I found a very good article with the same title as this post by Nicholas G. Carr on Strategy-business.com (thanks to a post by Bertand Duperrin). Nicholas warns of the hype around Google’s model to foster innovation and the belief that it is the direct reason of its amazing success. But it could very well be more the product of its success instead of the cause as Nicholas writes.

Nicholas message is not to ignore Google’s example but to be careful not to assume that the Google way is necessarily the one to follow for all businesses and in all contexts.

I would like here to highlight the following two passages, both found in Nicholas’ conclusion. The first one gives the two key examples of Google strategic initiatives that businesses should reflect on seriously and use as benchmarks:

Google’s use of powerful computers to collect and make sense of the operational and customer data flowing through the Internet and other networks provides a window into the future of many industries. And, on a related note, the company has created simple but useful systems for sharing information within and between teams, a challenge that has frustrated many firms.”

So, in other words, this is about knowing better your customers to serve them better and about effective and efficient internal knowledge sharing to leverage your human capital (what I’ve been writing about since my first post on this blog!).

The second passage is what, according to Nicholas Carr, Google does teach us:

Above all, Google teaches us, through both its successes and its failures, that smart companies — the ones that are not only consistently innovative but consistently profitable — exhibit three qualities. They hire talented people and give them room to excel. They measure progress and results rigorously and make course adjustments quickly. And they remain disciplined in their work and their spending, curbing the instinct to do too much at once.”

I don’t think that this is this is the only lesson on strategy we can retain from Google’ success, but I agree with Carr that it all relies first on hiring talented people and then making sure to continuously leverage this human capital.

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