How do you measure success? How does your employer? Three measures a commercial company might use are revenue, share price and market capitalization. The three are connected, but the first guides the other two.
Initially, revenue or the promise of revenue sets the company's value; if they achieve success and cash flow, the name of the game is growth. Once established, year-on-year improvement becomes that much harder, and share price growth comes with ever increasing market scrutiny.
Few companies achieve a position of market dominance - but those that do face an even steeper slope. The toughest part is the transition from underdog to leader - people will now root for the other guy, governments will keep a closer eye on you, and all the while, you've got to keep up that year-over-year performance (despite a growing denominator) and remain compelling to the markets.
When the company is starting out, there is pressure on the employees to build the product, close the first sale, make payroll, pay off debts, etc. It's a productive pressure, everyone is in it together, and while the risk of failure is ever-present, you knew it would be like this when you joined.
When the company first achieves consistent growth, the pressure changes, it's a much better place to work. Progress is visible and customers are enchanted; sure everyone is working hard, but it doesn't feel like it - there is an energy of vindication, of growth, and of optimism - you've made it over that hump, and things are looking good.
Then seemingly out of the blue, success changes from a happy surprise to an expected duty; people want to see you fail; what was passion is now work; what was energetic is now draining; what was once a team is now a group of competitors fighting over an HR-imposed compensation scheme - some call this maturity, others just say it sucks. At all levels, the company is, well, less happy.
In phase 2, you want to win on your merits; confident about your product, you simply want an even playing field and the opportunity to participate. You know how good you are, and damn it, they just need to see it so that they can catch the fever as well!
In phase 3, growth is harder, more doors are open to you, but winning is tougher, the competition is fiercer, and expectations are much higher; so you grasp at other kinds of straws. You ship products before they're ready, make poor decisions, and use other (not merit-based) means to win.
Google is doing all of these things.
They are incredibly successful in their core business; they have dominant market share, their margins are unheard of, their reputation is solid, and they still have perhaps the most talented workforce ever assembled.
But their mission has shifted - they've gone from wanting to get better every day to wanting to grow bigger every day. Their success is no longer in their control (you own your improvement, you don't own customer preference), nor is it particularly inspiring.
Why have they allowed themselves to get this way? Is it greed? Ego? The fear of being a one-trick pony?
I think it's all three. Besides recent product mishaps (Wave), complaining publicly when they're at risk of losing deals, the abysmal policy choices (Net Neutrality with Verizon), and even the opening of a think tank (isn't this function the very essence of Google?), I think one of the most telling reasons for their current state is their recently-published code of conduct.
ASIDE: The best and most easily remembered set of principles I've ever read (IBM):Respect for the individual, customer service, excellence.
"Don't be evil" (Google's motto) is an admonishment. When I first heard it, I wondered: "Why? Are you afraid you actually are evil and need to keep reminding yourself not to be?" Why not "Be Great"??
I admire and respect Google, I think they have helped shape a completely new landscape for people and business everywhere. I say this not to kowtow to them, but to recognize that brilliance in some areas does not equal brilliance in all areas. I think Google will continue to be successful, but I believe their leadership is preventing them from achieving quantum success.
Could they have avoided their recent pitfalls? Yes. They should (given their incredibly talented workforce) have realized that growth and winning do not equal success.
Burdening one success with the creation of others is not always the best strategy.
Instead of trying to accumulate all sorts of new products and businesses under one roof, they might have been better off spinning things like Gmail, or Google Apps, or Blogger or YouTube off into little independent Googlets, each free to evolve, grow, and achieve without being beholden to, or held back by the mother ship.
Of course they can "help" each other, and cross-pollinate, but that doesn't require them to be in the same organization. It can be easier for a new entrant to ride the giant's coattails, but that comes with rules and constraints, some of which can prevent sustainability or confine the addressable market. Google's quest to amass size is failing them.
There is strength in being one great thing; there is wisdom in seeking to build other great things; and there is wit in being the one to eventually replace your one great thing.
Google has an amazing talent pool, a powerful market presence, and a big wallet. The Googlets can take advantage of all three from the outside; they can create value and impact, and even help revitalize the workforce.
Size does matter. A business has a right size; it takes a real leader to understand that and to stay true to it. The stock market has never been a good judge of greatness and achievement; it knows so little about you or your business - why allow them to prescribe your path to happiness?