We’ve grown up looking to Google for the most innovative products and for the most brilliantly effective strategic moves against their competition. We’ve watched Google bust through obstacles on its way to search engine domination and all the way through to its current state of near-total internet domination and world-wide king of Big Data.
So it’s a weird feeling to think their latest move might be considered a little old-fashioned. Splintering the company into separate divisions under the holding company they call “Alphabet”, might not actually gain approval of some of our leading business thinkers. Not only that, but that it might even be considered “backward-looking” (in spite of Google’s reputation for being so focused on the future their brand is synonymous with “futuristic”).
Simply put, Google’s reorganization might go against the grain of Agile?
If you don’t know, Agile is one of the most talked-about movements in recent business history, and it’s happening right now. It’s seen by many to be the direction of business- a direction businesses must take if they are to move gracefully and successfully into the middle of this century. In short, the principles of Agile are seen by many experts to be the only way for businesses to survive at all.
What Google is doing with Alphabet
The idea is to separate the search/advertising part of Google (the original Google, if you will) from other business ventures like Nest, Calico, and the parts of Google that explore things the future is made of, like the now-famous self-driving cars and incredible-sounding cures for diseases.
The separate divisions, it’s believed, will most likely someday be spun off (at least some of them…probably not Google though!). For the time being, they will begin to resemble independent companies, each with its own CEO, business resources, and structure. Of course the overall impetus for this restructuring is that they also operate finally independent from one another as well. Google is done with funding those money-losers, since they make its bottom line look less than stellar to investors.
So, while the new Alphabet umbrella company seems to make financial sense, what about how it looks from a management point of view? More specifically, how does it look through the lens of Agile?
How does Alphabet measure up according to Agile?
Well to begin with, in an ideal Agile organisational structure, a company isn’t set up with “departments” or delineated teams. In other words, managers are supposed to have access to all the resources of the company, drawing from every corner of the company gene pool to form teams as needed.
That will no longer be the case for managers at companies in Alphabet. Under Alphabet, a Nest manager won’t be able to tap into the brain power over at Google any longer. Neither will Google be able to draw from any new talent hired over at the more innovative scientific parts of Alphabet…the ones designing all those futuristic gizmos. So, while Google’s bottom line will look better after separating from those “gizmo” companies, they will suffer because there’s probably some amazing talent working there, which will now never get to work at Google.
Under Agile, teams are formed collaboratively, with the goal of fluidly forming and reforming teams (i.e. Tuckman’s stages of group development) as projects require, rather than relying on fixed reporting structure. Managers get to pull the best talent for each project instead of going with the same group that reports to them, each and every time. Teams should be cross-functional as well. Well, there’s going to be no more pulling the best talent across the newly independent parts of the Alphabet holding company, as far as anyone can tell.
Google is all about the sharing of resources (internally of course!), so what gives?
The sharing of resources…ironically, that’s exactly the kind of “sharing” that Google has made use of for years…only it’s the sharing of computing resources, not human resources. Their modular data centers are Agile, if you apply the principles to technology: they distribute the work among many computers, who together and collaboratively act as one team. There is no single central server but rather the “action” is distributed across a vast network of smaller systems. If one fails, another kicks in to do the job.
Doesn’t this sound a lot like the collaborative, bottom-up management (rather than top-down) structure that’s advocated by Agile?
So what this looks like is a segmentation of a business which formerly was in the habit of sharing resources. Where there used to be one central Human Resources department, now there will be one for Google, one for Nest, one for Calico etc. Same goes for other administrative departments, which will be duplicated across the network of companies which now fall under the umbrella of Alphabet.
No, the new direction taken by Google/Alphabet is clearly not based on the same principles. Larry Page himself put it very clearly when he spoke about the new company, as reported in WIRED magazine:
Fundamentally, we believe this allows us more management scale, as we can run things independently that aren’t very related. Alphabet is about businesses prospering through strong leaders and independence.Larry Page, CEO of Alphabet
Since elimination of internal bureaucracy is one goal of an Agile organization, does this make Alphabet anti-Agile? Is the restructuring a form of Reverse Agile-ization? You can look at it dozens of ways but when viewed in this light, maybe Alphabet isn’t really very Agile at all. But it’s Google, so chances are somehow it’ll all work out in the end.