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Steve Denning
“Google+ is already dead,” said Scott Galloway, Clinical Professor of Marketing, NYU Stern, Founder & CEO of L2, a business intelligence firm, in Munich last month. “It has a 97% decline in engagement rate, year-over-year.”
“Google+ was one of the most ambitious bets in the company’s history,” write Eric Schmidt and Jonathan Rosenberg in their book, How Google Works (2014). “Google+ is a response to the disruption of Web 2.0 and the emergence of the social web. It is the social fabric that weaves together Google’s various platforms, from AdWords to YouTube.”
Schmidt and Rosenberg go on to tell the story how Google+ became such a huge project for Google, as they saw the disruptive potential threat of social media, particularly Facebook. They asked the hard questions and decided to do something about it. Google saw that Facebook is consuming progressively more of users’ time. And the average minutes per visitor was increasing more rapidly for Facebook than for Google.
But the effort went for nought. Google+ is now effectively dead. All that is needed is the funeral. Why?
Misstep #1: Spamming Grandma for cash
In April 2011, Larry Page became CEO of Google and embraced Google+ with a passion. After watching Eric Schmidt run Google for a decade, Page in his first week as CEO sent a companywide memo tying 25% of every employee’s bonus to Google’s success in social. Bonuses were going to depend on how well the company did on its “strategy to integrate relationships, sharing and identity across our products. If we’re successful, your bonus could be up to 25% bigger. If not, your bonus could be up to 25% less than target.”
“Page wants employees to advocate Google’s social networking features to family and friends,” wrote ComputerWorld. “‘When we release products, try them and encourage your family and friends to do the same.’”
If Page had read Dan Pink’s book, Drive: The Surprising Truth About What Motivates Us, he would have learned that extrinsic incentives like money are good when the goal is clearly defined and doesn’t involve much thinking or creativity. When the goal involves innovation and creativity, then extrinsic drivers tend to be ineffective and even counterproductive. Once a basic level of remuneration is in place, it’s more effective to rely on intrinsic motivation and inspire people to achieve the goal, and then provide unprogrammed bonuses if they succeed brilliantly.
Extrinsic incentives–a favorite tool of Traditional Management– are dangerous because they divert people’s attention from the point of what’s needed and instead focus attention on “scoring points”.
At Google, the incentives have perhaps been effective—in getting Google’s employees to do the wrong thing. They have pushed them to add contrived social features to services where they didn’t belong. Instead employees should have been focused on making Google’s online services awesome. The fact that Google’s Net Promoter Score is a meager 11 out of a possible 100 (compared to USAA’s 80, Costco’s 78 and Apple’s 76) shows how far Google still has to go in delighting its customers.
Google is often presented as an exemplar of the Creative Economy and in some of its management practices, this is correct. But in this instance, Page was very much using Traditional Management tools: “carrots and sticks” to chase yesterday’s big thing, instead of inventing the future. To be successful in the Creative Economy, Google needs to be asking: who are our clients and how can we delight them? The answer is not going to be: copy Facebook.
Thus the distinction between the Traditional Economy and the Creative Economy is not a distinction between new firms and old firms. It’s a distinction between different ways of managing. When “new” firms like Google practice “old” management methods, the results are just as bad.
Misstep #2: Believing its own mission statement
There is a curious disconnect between Google’s mission (“organize the world’s information”) and what Google actually does to earn a living (“finding stuff quickly, easily and elegantly”).
Users love Google because they like finding even obscure stuff with blinding speed. It is elegant and simple, with no intrusive commercials. The commercials are there if you want them, they don’t get in the way. People liked the commitment to do no evil, although some–particularly in Europe–have begun to wonder whether the pledge is reflected in Google’s actions. It was nice that Google recruited the best talent and treated them well.
Google’s mission statement is clear and simple, but wrong. Unlike most mission statements, which are a jumble of words put together by a committee, representing the lowest common denominator of what the company does, and to which in any event no one pays any attention, Google’s mission statement is a model of clarity and crispness:
Fortunately for Google, its core business doesn’t depend on “organizing the world’s information.” Its business depends on helping us find stuff at lightning speed, at the very moment when we want it, without distractions or intrusive advertising. It is clean. It is neat. It is elegant. It fits our lives as if it had always been there.
We can use Google’s search tool to find stuff without having the slightest interest in whether the world’s information is organized or not. All we care about is whether we can find the thing we are looking for and get to it now. Google’s search business, which provides the bulk of its earnings, is in the finding business, not the library business.
So Google’s mission statement hasn’t caused a problem for its core business—yet. Where it causes a problem is when its people come to ask themselves: what next? So long as Google thinks it is in the business of organizing the world’s information, it is likely to go on launching unprofitable businesses.
Misstep #3: Listening to its employees, not its customers
Google has consistently failed to get to heart of social. People prefer Facebook to Google+, fundamentally because Google’s approach to social isn’t fun.
Google+ is only the most recent of Google’s embarrassing succession of failures in social media. First Orkut, Then Wave. Then Buzz. Then Google Health and Google Powermeter. Now Google+.
The assumption of Google+, like Google Health and Google PowerMeter, is that users would enjoy spending time organizing their information. Geeks may like organizing their information but normal people don’t. Google keeps making the same error over and over again, because it listens to its employees, ahead of its customers.
Misstep #4: A frontal attack on an established network
A head-on challenge to Facebook was inevitably unsuccessful. It was an attempt to displace a well-entrenched social network. Even if Google had been able to figure out significant improvements on Facebook, which it didn’t, Facebook, as the incumbent network, could have quickly emulated them, thereby eliminating any incentive for people to leave Facebook and join a new network, particularly since all of their current friends and connections were on Facebook and not on Google+.
The error goes back to the mission statement. If Google’s starts thinking its goal is to organize the world’s information, then it can easily start imagining that Facebook, by organizing the world’s social information, is a direct competitor and that, as a result, Google has to try to take down Facebook. Trying to take down Facebook by offering something similar to Facebook is like Microsoft taking down iPod by offering Zune. No way.
Misstep #5: Failure to offer something genuinely new
In Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant (2005) W. Chan Kim and RenĂ©e Mauborgne illustrate the high growth and profits that an organization can generate by creating delighting customers in an uncontested market space, i.e. a “Blue Ocean”, rather than by competing head-to-head with other suppliers in the bloody shark-infested waters (the “Red Ocean”) with known customers in an existing sector.
Instead of choosing to swim with the sharks in head-to-head competition with Facebook, Google could be pursuing a “blue ocean” strategy by competing in a new area where there is little competition.
The key to this approach is to identify a segment of customers whose needs are not being met and generate more value for that segment sooner. Health and energy might have been such opportunities, but Google missed them because it was focused on the producing a thing that people didn’t want, rather than delighting people, by solving a problem, perhaps a problem they didn’t even know they had. The key is to shift from a focus on producing things to a focus on understanding and delighting people.
Google needs to rethink its mission, stop thinking about things, and find new areas where it can truly delight its customers. It’s not enough for Google to be a “new” company. To succeed, it has to practice the “new management” of the Creative Economy.
“Google+ is already dead,” said Scott Galloway, Clinical Professor of Marketing, NYU Stern, Founder & CEO of L2, a business intelligence firm, in Munich last month. “It has a 97% decline in engagement rate, year-over-year.”
“Google+ was one of the most ambitious bets in the company’s history,” write Eric Schmidt and Jonathan Rosenberg in their book, How Google Works (2014). “Google+ is a response to the disruption of Web 2.0 and the emergence of the social web. It is the social fabric that weaves together Google’s various platforms, from AdWords to YouTube.”
Schmidt and Rosenberg go on to tell the story how Google+ became such a huge project for Google, as they saw the disruptive potential threat of social media, particularly Facebook. They asked the hard questions and decided to do something about it. Google saw that Facebook is consuming progressively more of users’ time. And the average minutes per visitor was increasing more rapidly for Facebook than for Google.
But the effort went for nought. Google+ is now effectively dead. All that is needed is the funeral. Why?
(AP Photo/Virginia Mayo, )
In April 2011, Larry Page became CEO of Google and embraced Google+ with a passion. After watching Eric Schmidt run Google for a decade, Page in his first week as CEO sent a companywide memo tying 25% of every employee’s bonus to Google’s success in social. Bonuses were going to depend on how well the company did on its “strategy to integrate relationships, sharing and identity across our products. If we’re successful, your bonus could be up to 25% bigger. If not, your bonus could be up to 25% less than target.”
“Page wants employees to advocate Google’s social networking features to family and friends,” wrote ComputerWorld. “‘When we release products, try them and encourage your family and friends to do the same.’”
If Page had read Dan Pink’s book, Drive: The Surprising Truth About What Motivates Us, he would have learned that extrinsic incentives like money are good when the goal is clearly defined and doesn’t involve much thinking or creativity. When the goal involves innovation and creativity, then extrinsic drivers tend to be ineffective and even counterproductive. Once a basic level of remuneration is in place, it’s more effective to rely on intrinsic motivation and inspire people to achieve the goal, and then provide unprogrammed bonuses if they succeed brilliantly.
Extrinsic incentives–a favorite tool of Traditional Management– are dangerous because they divert people’s attention from the point of what’s needed and instead focus attention on “scoring points”.
At Google, the incentives have perhaps been effective—in getting Google’s employees to do the wrong thing. They have pushed them to add contrived social features to services where they didn’t belong. Instead employees should have been focused on making Google’s online services awesome. The fact that Google’s Net Promoter Score is a meager 11 out of a possible 100 (compared to USAA’s 80, Costco’s 78 and Apple’s 76) shows how far Google still has to go in delighting its customers.
Google is often presented as an exemplar of the Creative Economy and in some of its management practices, this is correct. But in this instance, Page was very much using Traditional Management tools: “carrots and sticks” to chase yesterday’s big thing, instead of inventing the future. To be successful in the Creative Economy, Google needs to be asking: who are our clients and how can we delight them? The answer is not going to be: copy Facebook.
Thus the distinction between the Traditional Economy and the Creative Economy is not a distinction between new firms and old firms. It’s a distinction between different ways of managing. When “new” firms like Google practice “old” management methods, the results are just as bad.
Misstep #2: Believing its own mission statement
There is a curious disconnect between Google’s mission (“organize the world’s information”) and what Google actually does to earn a living (“finding stuff quickly, easily and elegantly”).
Users love Google because they like finding even obscure stuff with blinding speed. It is elegant and simple, with no intrusive commercials. The commercials are there if you want them, they don’t get in the way. People liked the commitment to do no evil, although some–particularly in Europe–have begun to wonder whether the pledge is reflected in Google’s actions. It was nice that Google recruited the best talent and treated them well.
Google’s mission statement is clear and simple, but wrong. Unlike most mission statements, which are a jumble of words put together by a committee, representing the lowest common denominator of what the company does, and to which in any event no one pays any attention, Google’s mission statement is a model of clarity and crispness:
Google’s mission is to organize the world‘s information and make it universally accessible and useful.
Unfortunately, it’s wrong. Organizing the world’s information would
involve building a gigantic library. Libraries are wonderful things. But
libraries have never been popular or profitable.Fortunately for Google, its core business doesn’t depend on “organizing the world’s information.” Its business depends on helping us find stuff at lightning speed, at the very moment when we want it, without distractions or intrusive advertising. It is clean. It is neat. It is elegant. It fits our lives as if it had always been there.
We can use Google’s search tool to find stuff without having the slightest interest in whether the world’s information is organized or not. All we care about is whether we can find the thing we are looking for and get to it now. Google’s search business, which provides the bulk of its earnings, is in the finding business, not the library business.
So Google’s mission statement hasn’t caused a problem for its core business—yet. Where it causes a problem is when its people come to ask themselves: what next? So long as Google thinks it is in the business of organizing the world’s information, it is likely to go on launching unprofitable businesses.
Misstep #3: Listening to its employees, not its customers
Google has consistently failed to get to heart of social. People prefer Facebook to Google+, fundamentally because Google’s approach to social isn’t fun.
Google+ is only the most recent of Google’s embarrassing succession of failures in social media. First Orkut, Then Wave. Then Buzz. Then Google Health and Google Powermeter. Now Google+.
The assumption of Google+, like Google Health and Google PowerMeter, is that users would enjoy spending time organizing their information. Geeks may like organizing their information but normal people don’t. Google keeps making the same error over and over again, because it listens to its employees, ahead of its customers.
Misstep #4: A frontal attack on an established network
A head-on challenge to Facebook was inevitably unsuccessful. It was an attempt to displace a well-entrenched social network. Even if Google had been able to figure out significant improvements on Facebook, which it didn’t, Facebook, as the incumbent network, could have quickly emulated them, thereby eliminating any incentive for people to leave Facebook and join a new network, particularly since all of their current friends and connections were on Facebook and not on Google+.
The error goes back to the mission statement. If Google’s starts thinking its goal is to organize the world’s information, then it can easily start imagining that Facebook, by organizing the world’s social information, is a direct competitor and that, as a result, Google has to try to take down Facebook. Trying to take down Facebook by offering something similar to Facebook is like Microsoft taking down iPod by offering Zune. No way.
Misstep #5: Failure to offer something genuinely new
In Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant (2005) W. Chan Kim and RenĂ©e Mauborgne illustrate the high growth and profits that an organization can generate by creating delighting customers in an uncontested market space, i.e. a “Blue Ocean”, rather than by competing head-to-head with other suppliers in the bloody shark-infested waters (the “Red Ocean”) with known customers in an existing sector.
Instead of choosing to swim with the sharks in head-to-head competition with Facebook, Google could be pursuing a “blue ocean” strategy by competing in a new area where there is little competition.
The key to this approach is to identify a segment of customers whose needs are not being met and generate more value for that segment sooner. Health and energy might have been such opportunities, but Google missed them because it was focused on the producing a thing that people didn’t want, rather than delighting people, by solving a problem, perhaps a problem they didn’t even know they had. The key is to shift from a focus on producing things to a focus on understanding and delighting people.
Google needs to rethink its mission, stop thinking about things, and find new areas where it can truly delight its customers. It’s not enough for Google to be a “new” company. To succeed, it has to practice the “new management” of the Creative Economy.
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