Of particular interest is the letter from Google's founders that accompanied the filings to the SEC. This document stands out as an exemplar of honest and clear language when compared to the delusional hype of many IPO filings and the cryptic financial reports that emanate quarterly from one too many corporate executive suites. It reflects several unusual and admirable principles not often espoused by companies and their leaders today:
1. Balance the Interests of ALL Stakeholders –
At present corporate governance and control is a bone of contention among elite top managers and boards on one side and equally elite institutional investors and investment bankers on the other. Neither side promotes policies that are in the long term interests of most rank-in-file employees and shareholders. In adopting its two-tiered ownership structure, Google is attempting to break free of this value-destroying tug-of-war. The company's leaders demonstrate enormous courage in taking a long term view of its business and how it's managed. "As a private company, we have concentrated on the long term, and this has served us well. As a public company, we will do the same. In our opinion, outside pressures too often tempt companies to sacrifice long-term opportunities to meet quarterly market expectations..." Analysts can criticize this position all they want, but no one will be forced to buy the stock.
2. Take an Honest View of Risk –
"We will not shy away from high-risk, high-reward projects because of short term earnings pressure... We are creating a corporate structure that is designed for stability over long time horizons..." On the one hand Google's leaders defend its right to take big risks for big long term payoffs, but also believe that it is irresponsible to bet the whole company on such gambits as many failed dotcoms did. Innovation requires companies to be free to take leaps of faith when necessary and to have enough time to see a payoff. We can only hope that other corporate leaders will take inspiration from Google, escape the tyranny of ninety-day reporting cycles, and start looking again to the long term.
3. Put Faith and Trust in Employees –
Google's leaders recognize the role and importance of their employees in the company's success. They do everything in their power to create as attractive a work environment as they can for their talent. "We will reward and treat them well. We provide many unusual benefits for our employees, including meals free of charge, doctors and washing machines. We are careful to consider the long term advantages to the company of these benefits. Expect us to add benefits rather than pare them down over time. We believe it is easy to be penny wise and pound foolish with respect to benefits that can save employees considerable time and improve their health and productivity." Wouldn't it be nice if more companies, especially those recently reporting record earnings, would increase spending on their employees instead of continuing to squeeze costs out of them?
Google's faith and trust in employees goes beyond generous workplace perks to include a real say in the strategic product direction of the firm. It allows staff to spend 20% of their time working on what THEY think will benefit Google most. "This empowers them to be more creative and innovative. Many of our significant advances have happened in this manner." How much time can workers in your organization spend on activities they think will benefit the company?
4. Appeal to a Higher Purpose –
It's understandable that many people, particularly those who got burned in the dot-com meltdown, would be skeptical of statements like "Don't be evil" and "We aspire to make Google an institution that makes the world a better place." But what if Google can back its rhetoric up with action? There is evidence of such intent. For example, last year the company created Google Grants - a program in which hundreds of non-profits received free advertising. And the company is in the process of establishing the Google Foundation in which it intends to contribute significant resources, including employee time and approximately 1% of Google's equity and profits.
Is Google really a different kind of company or merely a bunch of egotistical, power-hungry, soon-to-be millionaires and billionaires? Only time will tell which is true - but I'm pulling for these guys to succeed. Lord knows, we need companies with the courage to pioneer new, more responsible and balanced ways of doing business. You go Google!