Paying for social: Google hits middle age

Last week, we read about Larry Page’s attempts to focus his company on winning the battle for the social graph of the internet.  Most agree that Google is far behind and many argue that for the content graph winner, the social graph is already lost.  Facebook is big, Facebook is smart, and Facebook is getting smarter by hiring away some of Google’s best.

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One of the measures, like letting Google teams form “mini startups” within the company seem interesting and may help the cause if these teams are property left alone and, potentially, create products that compete with internal projects (big “IF”).  Of course one can doubt whether these “startups” will feel enough pressure to produce when a large portion of the job, money, and reputation risk that comes with starting something is off the table.

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However, when I read about the new compensation and bonus structure, or, at least, the parts that have been leaked, I felt a strange chill down my spine.  You see, dear readers, I went through my professional adolescence at Oracle, the small beast that has now become a real behemoth.  Oracle, back in the early 1990’s,  was fighting the database wars with Sybase and Informix and was starting to lose some of their best people to startups like Siebel and Peoplesoft.  Oracle’s breakthrough version 7 was delayed and the sales organization where I worked, while known for being aggressive and border-line unethically pushy, was going through some challenges on staying focused and doubling the company’s revenues every year as it had done every year during the prior decade.  Gary Kennedy (the original sales cappo di cappi) was replaced by Mike Fields who was later replaced by Ray Lane — each with a more and more convoluted sales compensation plan for the huge sales machine used to running full steam ahead.

I remember sitting in the audience at a company-wide sales meeting where an hour or so was spent on going through new organization charts and another two hours going through details of a new sales plan that incentivized people to do certain things and not do others.  I don’t know if Googlers had a similar experience.  Slides, slides, slides — people, titles, boxes, arrows, dollars, percentages.  Sales guys sitting there with calculators, inevitably finding how each was screwed by the new comp plan, and bitching to each other knowingly.

But, there was a big difference there.  No engineers, product managers or marketing people were in the room.  They were building products, losing people to startups in the process, shifting their recruiting battles from Stanford and Berkeley to Sun and IBM and, in general, seemed to be left alone.  No one put them on a complex compensation plan.  No one, at least to our knowledge, was paying them $50M to stick with the company.  There were stars, for sure, but no super stars as far as we could tell.

I think what Google failed to understand and what Oracle always had is that engineers don’t think like sales people (or investment bankers, or hedge fund mavens).  Their career and their experience can not be easily manipulated with bonuses, comp plans, incentives and accelerators like a sales guy’s quest for ever larger carrots, never mind the sticks.

Good engineers care about working on their own ideas, not cloning some else’s.  They want to belong to elite squads where everyone knows everyone by name, works hard together, and gets the praise as a team.  They want to proudly talk about the products they worked on at the local San Francisco bar, not that they were part of a machine that took someone else’s idea and crushed everyone in its path (that’s so Microsoft).  Startups within Google are a good idea.  Tying everyone’s compensation to how well the company does as a whole to an area that may not be interesting to most people there seems like a flawed knee-jerk reaction.  What if I don’t care how my new analytics engine for Google spreadsheets is “social.”  What if I am interested in how my Android payments platform can provide a new kind of information graph and data to marketers that takes Facebook’s notion of “like” and changes the verb on the preference graph there into a much more powerful “buys.”?   So, I think that paying everyone on something that should be a concern to many (but not necessarily all) is a flawed idea.  It fosters resentment between groups, slows the already slow project approval processes (how is it social? should, in theory, now be a part of every PM meeting), and further makes 90% of the company feel that what they are doing is marginal rather than core.

Google is a great company.  And Google has always had great engineering talent.  Treating those engineers like Oracle sales guys on a quest to kill their annual quota and game their comp plan will further drive those engineers away.  College kids not interested in “social”  (hey, New York, there are actually things out there besides the friends connect with friends apps) will find other employment.   And small startups will continue to innovate because everyone at that startup cares about the problem they are out to solve.

Solving problems by throwing dollars at departing perceived super stars and inventing complex formulae to determine paychecks is a middle-age software company move.  And it will retain and attract the caliber of people who like that sort life.

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