Google's 20 percent rule


Published on

Review of Pro and cons of Google's 20% rule

Published in: Business, Technology
1 Like
  • Be the first to comment

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

Google's 20 percent rule

  1. 1. 20%
  2. 2. What is Google’s 20% rule ? • Google is consistently mentioned as one of the greatest companies to work for, and it's not hard to see why. They have sweet perks, super-smart people creating products that millions of people use, and a unique mentality about work Google encourages their employees to devote 20% of their time to working on any project they want. The idea is to spur innovation by letting smart people do what they’re interested in.
  3. 3. Benefits of 20% rule ? It can make you happy Working on something you find interesting is one sure way to be happy at work — no small feat. If nothing interesting is given to us, going out and picking something is a surefire way of finding a little happiness in the workplace. That can make a huge difference in how you approach the other 80% of your work It encourages innovation Your company will keep producing the same stuff over and over at the same rate unless someone changes something. Anything. You might think that it's the boss's responsibility to enact change or take some risks, but if you have an idea that could potentially make the company better or more efficient, people will pay attention It sparks creativity You can be creative no matter what kind of job you have. Even if you work in a field that isn't typically considered "creative," thinking up new ways to get things done within the context of your accounting job (for example) is one way to get the right side of your brain fired up
  4. 4. Benefits of 20% rule ? It makes you look good Say your idea/project isn't feasible for any number of reasons — you'll still come off as someone who cares enough to devote serious time and energy to an idea. It shows that you're trying to make the whole company better and more innovative, and the brass will be impressed. And if your idea is executed successfully? You might wind up becoming the brass. It's entrepreneurial Think of it as starting your own business — you'll teach yourself about planning, managing your time, selling your concept to other people, and executing a game plan...all valuable skills to pick up. Remember: This is on top of all your current responsibilities It can be lucrative If all the other reasons don't stir anything in you, maybe this one will. When it's time for your review or when you're asking for a raise, this is something you can point to and say, "I attempted to make the organization better with that project." If it was successful, it'll be hard for them to not see the value you've added (and could potentially keep adding).
  5. 5. Criticism of 20% rule ? The 20% rule is not really a rule—it’s an attitude According to sources at Google, employees don’t actually register their time, so how do you or your manager know you spend 20% and not 18%? As reported by several former Google employees, the 20% rule was not really controlled or managed; it was much more a mindset of allowing people to work on non-planned projects. Making this mindset instrumental and rule-based will probably not help you if you don’t already share the entrepreneurial attitude of Google The results are debatable Some sources claim that all of Google’s innovations came from the 20% rule; others report it is much less; and many claim that it’s not really possible to find out. In 2007, Google ran a commercial where it claimed that Gmail was invented in the 20% space. Shortly after, Gmail’s inventor Paul Buchheit disagreed: “It wasn’t a 20% project—it was my regular project. It predates the 20%-time rule, in fact.” It might get you stuck There is a big difference between having a great idea and building that great idea into a successful launch. The reason is often so-called “belly problems”, too many ideas stuck in the middle between idea generation and execution. In a medical device company , 85% of the R&D budget was used on projects that had been stuck in the pipeline for more than three years. Ironically, the company had implemented its own version of the Google 20% scheme called “Innovation Days.” This had let to a dramatic increase in the volume of ideas but the company simply didn’t have the execution power to deal with all these ideas
  6. 6. Criticism of 20% rule ? It is very, very expensive Google hasn’t published numbers on the size of investment on the 20% scheme, but if all the employees actually spend 20% of their time on their own projects—which is doubtful—a quick estimate would be an investment of more than half a billion dollars a year. In companies where labor costs take up the majority of the total costs, the 20% scheme will lead to a dramatic drop in profitability. Of course that will change if the ideas generated can increase your sales dramatically. But then there is a question: Could other types of initiatives give better results for less investment? It can blind you from seeing what’s next If you spend 10-15% of your total resources on harvesting your own employees’ ideas, there are serious risks that all your ideas are tinged with the internal culture of the company. Over time this situation can create a closed system of navel- gazing, which will blind your sense of what matters to your customers and prevent you from adapting your innovation culture to meet your customers’ needs. Signs of a navel-gazing culture are arrogance, a tendency to jump on popular trends, and a growing need to spend money on persuading customers that your offerings are great. Why 20%?
  7. 7. There is a better method that can transform a company into a creative powerhouse i.e. Liberation Examples : When Adidas introduced the lightest soccer shoe ever in 2010, it came out of a decision that “lightweight” was the focus of innovation in the soccer category. When Samsung introduced the world’s best-selling television screen in 2005, it was based on an insight that TVs were becoming a piece of furniture; that insight became the direction for its engineers and designers. Now that the 20% scheme is officially declared dead, it might be a good time to turn attention to how you actually lead innovation. Conclusion If you give people enough freedom to do whatever they want, their ideas will automatically flourish and find wonderful things. Maybe not all of the ideas are great, but out of 100 ideas, there might be one that will completely change the game.
  8. 8. Appendix
  9. 9. Google’s mission is to organize the world’s information and make it universally accessible and useful. Market ShareService/InnovationInfrastructure Competitive Advantages
  10. 10. Intended Strategy Realized Strategy Unrealized Strategy Emergent Strategy In case of Google, 50% of Products resulted from the 20% rule which makes their strategy ‘emergent’