A handful of recent reports highlight the importance — and in some cases, the weakness — of one of the big ideas behind Alphabet’s operating structure.
When Larry Page explained the reorganization of the-company-formerly-known-as-Google into a bunch of spinoff subsidiaries with a new parent entity called Alphabet last fall, one of his major points was how the new structure would give more freedom to a hand-picked group of leaders.
“Alphabet is about businesses prospering through strong leaders and independence,” he wrote. “In general, our model is to have a strong CEO who runs each business, with Sergey and me in service to them as needed. We will rigorously handle capital allocation and work to make sure each business is executing well. We’ll also make sure we have a great CEO for each business, and we’ll determine their compensation.”
Now the report cards are starting to come in for some of these leaders.
A new profile by Buzzfeed about current Google CEO Sundar Pichai highlights how the soft-spoken, non-political, product guy feels like the best fit for the incredibly huge job of growing the search giant’s ads business.
“I am glad that Pichai, of all people, is the CEO of Google,” reporter Mat Honan concludes.
But that portrait directly follows critical reporting on the CEOs of two other Alphabet spin-off businesses: Tony Fadell, who runs smart home company Nest, and Andy Conrad who leads life sciences business Verily.
In an in-depth story by The Information’s Reed Alberotti Fadell comes off as a tough leader who is controversial inside the company, which has faced significant product struggles in the past year.
Then, sources who spoke with STAT’s Charles Piller painted Conrad as a “divisive and impulsive leader whose practices are driving off top talent and leaving openings for competitors.”
Both stories, which were each published in the last week, highlight that, as per the Alphabet plan, each of the nine official subsidiaries really is its own beast and with its own management techniques and structure. And each of those new CEOs can be put under a microscope — by outsiders, former Googlers, some of whom have opted to go back to the mother-ship in the case of Nest and Verily, and the Alphabet exec team who have been holding them to an era of fiscal discipline.
A similar idea ran under the news that broke earlier this month that Alphabet was trying to sell Boston Dynamics, and reassigning other employees who joined Google through the company’s robotics buying spree in 2013. Andy Rubin, former founder of Android, led that handful of acquisitions, and when he left Google in 2014, the division never managed to find the right visionary leader to replace him. It subsequently lost its direction and is now essentially on the brink of dissolving entirely.
All of Alphabet’s new subsidiaries have more freedom and autonomy, but they’re all also still reliant on Google for cash. Page and Brin, the founders that grew Google into the behemoth it is today, are “in service,” to those startups, but each one is also much more insulated under its hand-chosen leader.
Larry Page has said that part of his new role at Alphabet is being a talent scout, searching for the right people to fill the chief executive positions for whichever moonshots he decides to chase next, and these recent criticisms of Conrad and Fadell emphasise just how important that job is.
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