Work Rules!: Insights from Inside Google That Will Transform How You Live and Lead

Metadata

• Title: Work Rules!: Insights from Inside Google That Will Transform How You Live and Lead
• Author: Laszlo Bock
• Book URL: https://amazon.com/dp/B00MEMMVB8?tag=malvaonlin-20
• Open in Kindle: kindle://book/?action=open&asin=B00MEMMVB8
• Last Updated on: Monday, May 1, 2017

Highlights & Notes

Welch and Conaty had implemented a 20-70-10 performance ranking system, where GE employees were sorted into three groups: the top 20 percent, the middle 70 percent, and the bottom 10 percent. The top workers were lionized and rewarded with choice assignments, leadership training programs, and stock options. The bottom 10 percent were fired. Under Immelt, the forced distribution was softened and the crisp labels of “top 20 percent,” “middle 70 percent,” and “bottom 10 percent” were replaced with euphemisms: “top talent,” “highly valued,” and “needs improvement.” Colleagues told me that the vaunted Session C process, a yearlong review of talent across the 300,000-person-strong company, had “lost its teeth” and “just wasn’t the same without Jack’s focus.”

Most CEOs are very good at many things, but they become CEOs for being superbly distinctive at one or two, which tend to be matched to a company’s needs at that time. Even CEOs need to declare a major.

A billion hours ago, modern Homo sapiens emerged. A billion minutes ago, Christianity began. A billion seconds ago, the IBM personal computer was released. A billion Google searches ago… was this morning. —HAL VARIAN, GOOGLE’S CHIEF ECONOMIST, DECEMBER 20, 2013

“Our CEO, Danny Wegman, says that ‘leading with your heart can make a successful business.’ Our employees are empowered around this vision to give their best and let no customer leave unhappy. And we use it to always make our decisions to do the right thing with our people, regardless of cost.”

“When employees trust the leadership, they become brand ambassadors and in turn cause progressive change in their families, society, and environment. The return on investment to business is automatic, with greater productivity, business growth, and inspired customers.”

Command-oriented, low-freedom management is common because it’s profitable, it requires less effort, and most managers are terrified of the alternative. It’s easy to run a team that does what they are told. But to have to explain to them why they’re doing something? And then debate whether it’s the right thing to do? What if they disagree with me? What if my team doesn’t want to do what I tell them to? And won’t I look like an idiot if I’m wrong? It’s faster and more efficient to just tell the team what to do and then make sure they deliver. Right?

The most talented people on the planet are increasingly physically mobile, increasingly connected through technology, and—importantly—increasingly discoverable by employers. This global cadre want to be in high-freedom companies, and talent will flow to those companies. And leaders who build the right kind of environments will be magnets for the most talented people on the planet.

Google’s approach is to cleave the knot. We deliberately take power and authority over employees away from managers. Here is a sample of the decisions managers at Google cannot make unilaterally: Whom to hire Whom to fire How someone’s performance is rated How much of a salary increase, bonus, or stock grant to give someone Who is selected to win an award for great management Whom to promote When code is of sufficient quality to be incorporated into our software code base The final design of a product and when to launch it Each of these decisions is instead made either by a group of peers, a committee, or a dedicated, independent team.

What’s a manager to do without these traditional sticks and carrots? The only thing that’s left. “Managers serve the team,” according to our executive chairman, Eric Schmidt.

The irony is that the best way to arrive at the beating heart of great management is to strip away all the tools on which managers most rely.

Performance improved only when companies implemented programs to empower employees (for example, by taking decision-making authority away from managers and giving it to individuals or teams), provided learning opportunities that were outside what people needed to do their jobs, increased their reliance on teamwork (by giving teams more autonomy and allowing them to self-organize), or a combination of these. These factors “accounted for a 9% increase in value added per employee in our study.” In short, only when companies took steps to give their people more freedom did performance improve.16

it’s when the economy is at its worst that treating people well matters most.

Freedom is free. Any of us can do this.” He was right. All it takes is a belief that people are fundamentally good—and enough courage to treat your people like owners instead of machines. Machines do their jobs; owners do whatever is needed to make their companies and teams successful.

We are called to an adventure, face a series of trials, become wiser, and then find some manner of mastery or peace.

“You can’t understand Google… unless you know that both Larry and Sergey were Montessori kids.”22 This teaching environment is tailored to a child’s learning needs and personality, and children are encouraged to question everything, act of their own volition, and create.

They started out knowing how they wanted people to be treated. Quixotic as it sounds, they both wanted to create a company where work was meaningful, employees felt free to pursue their passions, and people and their families were cared for.

If you’re changing the world, you’re working on important things. You’re excited to get up in the morning. You want to be working on meaningful, impactful projects, and that’s the thing there is really a shortage of in the world.

The kind of workman who gives the business the best that is in him is the best kind of workman a business can have. And he cannot be expected to do this indefinitely without proper recognition.… [I]f a man feels that his day’s work is not only supplying his basic need, but is also giving him a margin of comfort, and enabling him to give his boys and girls their opportunity and his wife some pleasure in life, then his job looks good to him and he is free to give it of his best. This is a good thing for him and a good thing for the business. The man who does not get a certain satisfaction out of his day’s work is losing the best part of his pay.26

Building an exceptional team or institution starts with a founder. But being a founder doesn’t mean starting a new company. It is within anyone’s grasp to be the founder and culture-creator of their own team, whether you are the first employee or joining a company that has existed for decades.

The Russian novelist Leo Tolstoy wrote, “All happy families resemble one another.”v All successful organizations resemble one another as well. They possess a shared sense not just of what they produce, but of who they are and want to be. In their vision (and perhaps hubris), they’ve thought through not just their origin, but also their destiny.

The fundamental lesson from Google’s experience is that you must first choose whether you want to be a founder or an employee. It’s not a question of literal ownership. It’s a question of attitude.

In Larry’s words: “I think about how far we’ve come as companies from those days, where workers had to protect themselves from the company. My job as a leader is to make sure everybody in the company has great opportunities, and that they feel they’re having a meaningful impact and are contributing to the good of society. As a world, we’re doing a better job of that. My goal is for Google to lead, not follow.”

And the greatest founders create room for other founders to build alongside them.

“Culture Eats Strategy for Breakfast” If you give people freedom, they will amaze you

“People interpret strong cultures based on the artifacts, because they’re the most visible, but the values and assumptions underneath matter much more.”

To understand that, you have to explore the three defining aspects of our culture: mission, transparency, and voice.

Google’s mission is the first cornerstone of our culture. Our mission is “to organize the world’s information and make it universally accessible and useful.”

Google’s mission is distinctive both in its simplicity and in what it doesn’t talk about. There’s no mention of profit or market. No mention of customers, shareholders, or users. No mention of why this is our mission or to what end we pursue these goals. Instead, it’s taken to be self-evident that organizing information and making it accessible and useful is a good thing.

This kind of mission gives individuals’ work meaning, because it is a moral rather than a business goal. The most powerful movements in history have had moral motivations, whether they were quests for independence or equal rights. And while I don’t want to push this notion too far, it’s fair to say that there’s a reason that revolutions tend to be about ideas and not profits or market share.

Crucially, we can never achieve our mission, as there will always be more information to organize and more ways to make it useful. This creates motivation to constantly innovate and push into new areas. A mission that is about being “the market leader,” once accomplished, offers little more inspiration. The broad scope of our mission allows Google to move forward by steering with a compass rather than a speedometer. While there are always disagreements—and we’ll get to a few of those in chapter 13—the underlying shared belief in this mission unites most Googlers. It provided a touchstone for keeping the culture strong, even as we grew from dozens of people to tens of thousands.

A more traditional mission of creating value for customers or growing profits would never have led us to Street View. And it’s a far cry from counting backlinks in order to rank websites. But our broader mission provided the space for Googlers and others to create wonderful things. These bursts of creation and accomplishment were a direct result of articulating Google’s mission as something to keep reaching for, just beyond the frontiers of what we can imagine.

The most talented people on the planet want an aspiration that is also inspiring. The challenge for leaders is to craft such a goal.

Adam Grant has an answer. In Give and Take,

Having workers meet the people they are helping is the greatest motivator, even if they only meet for a few minutes. It imbues one’s work with a significance that transcends careerism or money.

We all want our work to matter. Nothing is a more powerful motivator than to know that you are making a difference in the world.

How many of our companies make a practice of giving everyone, especially those most remote from the front office, access to your customers so employees can witness the human effect of their labors?

If you believe people are good, you must be unafraid to share information with them

“Assume that all information can be shared with the team, instead of assuming that no information can be shared. Restricting information should be a conscious effort, and you’d better have a good reason for doing so. In open source, it’s countercultural to hide information.”

At Google, a newly hired software engineer gets access to almost all of our code on the first day. Our intranet includes product roadmaps, launch plans, and employee snippets (weekly status reports) alongside employee and team quarterly goals (called OKRs, for “Objectives and Key Results”…

A few weeks into every quarter, our executive chairman, Eric Schmidt, walks the company through the same presentation that the board of directors saw just days before. We share everything, and trust Googlers to keep the information confidential.

At our weekly TGIF all-hands meeting, Larry and Sergey host the entire company (thousands join in person and by video, and tens of thousands watch the rebroadcast online) for updates from the prior week, product demonstrations, welcoming of new hires, and most important, thirty minutes of fielding questions from anyone in the company, on any topic. The Q&A is the part that matters most.

We also use an unfortunately named technique common in technology firms called “dogfooding,” where Googlers are the first to try new products and provide feedback.ix Dogfooders were the first to test-ride in our self-driving cars, supplying valuable feedback on how they work in daily use. This way, Googlers learn what’s going on, and teams get valuable, early feedback from real users.

Fundamentally, if you’re an organization that says “Our people are our greatest asset” (as most do), and you mean it, you must default to open. Otherwise, you’re lying to your people and to yourself. You’re saying people matter but treating them like they don’t. Openness demonstrates to your employees that you believe they are trustworthy and have good judgment. And giving them more context about what is happening (and how and why) will enable them to do their jobs more effectively and contribute in ways a top-down manager couldn’t anticipate.

Voice is the third cornerstone of Google’s culture. Voice means giving employees a real say in how the company is run. Either you believe people are good and you welcome their input, or you don’t. For many organizations this is terrifying, but it is the only way to live in adherence to your values.

“Getting employees to voice ideas has long been recognized as a key driver of high-quality decisions and organizational effectiveness. Research on voice has shown positive effects of employees speaking up on decision quality, team performance, and organizational performance.”

If you give people freedom, they will amaze you

we consistently made decisions based not on economics, but on what supported our values.

Our culture was shaping our strategy, and not the other way around.

Once you’ve chosen to think and act like a founder, your next decision is about what kind of culture you want to create. What are the beliefs you have about people, and do you have the courage to treat people the way your beliefs suggest? My personal and professional experience is that if you give people freedom, they will surprise, delight, and amaze you. They will also sometimes disappoint you, but if we were perfect we wouldn’t be human. This isn’t an indictment of freedom. It’s just one of the trade-offs.

Over the coming decades the most gifted, hardest-working people on the planet will gravitate to places where they can do meaningful work and help shape the destiny of their organizations. But the case is also a moral one, rooted in the simplest maxim of all: Do unto others as you would have them do unto you.

WORK RULES…FOR BUILDING A GREAT CULTURE Think of your work as a calling, with a mission that matters. Give people slightly more trust, freedom, and authority than you are comfortable giving them. If you’re not nervous, you haven’t given them enough.

So we’re left with two paths to assembling phenomenal talent. You can find a way to hire the very best, or you can hire average performers and try to turn them into the best. Put bluntly, which of the following situations would you rather be in? We hire 90th percentile performers, who start doing great work right away. We hire average performers, and through our training programs hope eventually to turn them into 90th percentile performers.

Companies spent more on training current employees than on hiring new employees. Data from 2012. Companies then turn vice into virtue by bragging about how much they spend on training. But since when is spending a measure of quality results? Do people boast, “I’m in great shape—I spent $500 on my gym membership this month?” The presence of a huge training budget is not evidence that you’re investing in your people. It’s evidence that you failed to hire the right people to begin with.

At Google, we front-load our people investment. This means the majority of our time and money spent on people is invested in attracting, assessing, and cultivating new hires. We spend more than twice as much on recruiting, as a percentage of our people budget, as an average company. If we are better able to select people up front, that means we have less work to do with them once they are hired. The worst case with a 90th percentile candidate is that they have an average year.

The first change is to hire more slowly. Only 10 percent of your applicants (at best!) will be top performers, so you go through far more applicants and interviews. I say at best, because in fact the top performers in most industries aren’t actually looking for work, precisely because they are top performers who are enjoying their success right where they are. So your odds of hiring a great person based on inbound applications are low.

“A top-notch engineer is worth three hundred times or more than an average engineer.… I’d rather lose an entire incoming class of engineering graduates than one exceptional technologist.”

How can you tell if you have found someone exceptional? My simple rule of thumb—and the second big change to make in how you hire—is: “Only hire people who are better than you.”

In addition to being willing to take longer, to wait for someone better than you, you also need managers to give up power when it comes to hiring. I should disclose up front that newly hired managers at Google hate this! Managers want to pick their own teams. But even the best-intentioned managers compromise their standards as searches drag on. In most companies, for example, they set very high bars for the quality of administrative assistants they want on the first day of a search, but by day ninety most managers will take anyone who will answer a phone. Even worse, individual managers can be biased: They want to hire a friend or take on an intern as a favor to an executive or a big client. Finally, letting managers make hiring decisions gives them too much power over the people on their teams.

The pedigree of your college education matters far less than what you have accomplished.

You obviously want to hire the best people, but “best” isn’t defined by a single attribute like intelligence or expertise.

As I’ll share in chapter 8, being a star in one environment doesn’t make you a star in a new one. So making sure someone will thrive in your environment becomes critical.

Hiring is the most important people function you have, and most of us aren’t as good at it as we think. Refocusing your resources on hiring better will have a higher return than almost any training program you can develop.

WORK RULES…FOR HIRING (THE SHORT VERSION) Given limited resources, invest your HR dollars first in recruiting. Hire only the best by taking your time, hiring only people who are better than you in some meaningful way, and not letting managers make hiring decisions for their own teams.

If you start a company or team, you know exactly what you are looking for in a new hire: someone just as motivated, clever, interesting, and passionate as you are about the new venture. And the first few people you hire will meet that standard. But they in turn won’t uniformly hire to the same standard as you, not because they are bad or incompetent people, but because they won’t have precisely the same understanding of what you are looking for.

Or they are accustomed to solving problems with finite ends and clear solutions, rather than navigating the complexity of real-world challenges.

But in 2010, our analyses revealed that academic performance didn’t predict job performance beyond the first two or three years after college, so we stopped requiring grades and transcripts except from recent graduates.

A small company can’t afford to hire someone who turns out to be awful. Bad performers and political people have a toxic effect on an entire team and require substantial management time to coach or exit.

The first step to building a recruiting machine is to turn every employee into a recruiter by soliciting referrals. But you need to temper the natural bias we all have toward our friends by having someone objective make the hiring decision. As your organization grows, the second step is to ask your best-networked people to spend even more time sourcing great hires. For some, that may turn into a full-time job. Finally, be willing to experiment. We learned billboards don’t work because we tried one. Our experience in Aarhus taught us that sometimes it makes more sense to hire a team on their terms than on your own.

WORK RULES…FOR FINDING EXCEPTIONAL CANDIDATES Get the best referrals by being excruciatingly specific in describing what you’re looking for. Make recruiting part of everyone’s job. Don’t be afraid to try crazy things to get the attention of the best people.

confirmation bias, “the tendency to search for, interpret, or prioritize information in a way that confirms one’s beliefs or hypotheses.”

The best predictor of how someone will perform in a job is a work sample test (29 percent).

“We do our interviewing based on really testing your skills. Like, write some code, explain this thing, right? Not look at your resume, but really see what you can do.” Eric Veach adds, “The interviews are done [by] a large swath of engineers who ask a lot of very data-oriented kinds of questions. They’re not just, you know, ‘Tell me about a time when…’ They’re more like, ‘Write me an algorithm to do this.’ ”

The second-best predictors of performance are tests of general cognitive ability (26 percent).

Tied with tests of general cognitive ability are structured interviews (26 percent), where candidates are asked a consistent set of questions with clear criteria to assess the quality of responses.

The goal of our interview process is to predict how candidates will perform once they join the team. We achieve that goal by doing what the science says: combining behavioral and situational structured interviews with assessments of cognitive ability, conscientiousness, and leadership.

Examples of interview questions include: Tell me about a time your behavior had a positive impact on your team. (Follow-ups: What was your primary goal and why? How did your teammates respond? Moving forward, what’s your plan?) Tell me about a time when you effectively managed your team to achieve a goal. What did your approach look like? (Follow-ups: What were your targets and how did you meet them as an individual and as a team? How did you adapt your leadership approach to different individuals? What was the key takeaway from this specific situation?) Tell me about a time you had difficulty working with someone (can be a coworker, classmate, client). What made this person difficult to work with for you? (Follow-ups: What steps did you take to resolve the problem? What was the outcome? What could you have done differently?)

For example, the US Department of Veterans Affairs has a site with almost a hundred sample questions at www.va.gov/pbi/questions.asp. Use them. You’ll do better at hiring immediately.

You’re busy and need to assess this person as fast as you can. But they’re making a bigger decision than you are. After all, companies have many employees, but a person has only one job.

But Google looks for a particular type of leadership, called “emergent leadership.” This is a form of leadership that ignores formal designations—at Google there is rarely a formal leader of any effort.

At Google we expect that over a team’s life, different skills will be needed at different times, so various people will need to step into leadership roles, contribute, and—just as important—recede back into the team once the need for their specific skills has passed.

This isn’t a neatly defined box, but includes attributes like enjoying fun (who doesn’t?), a certain dose of intellectual humility (it’s hard to learn if you can’t admit that you might be wrong), a strong measure of conscientiousness (we want owners, not employees), comfort with ambiguity (we don’t know how our business will evolve, and navigating Google internally requires dealing with a lot of ambiguity), and evidence that you’ve taken some courageous or interesting paths in your life.

By far the least important attribute we screen for is whether someone actually knows anything about the job they are taking on. Our reasoning and experience is that someone who has done the same task—successfully—for many years is likely to see a situation at Google and replicate the same solution that has worked for them.

In contrast, our experience is that curious people who are open to learning will figure out the right answers in almost all cases, and have a much greater chance of creating a truly novel solution.

The third key difference in our approach, therefore, is to have a subordinate interview a prospective hire. It sends a strong signal to candidates about Google being nonhierarchical, and it also helps prevent cronyism, where managers hire their old buddies for their new teams. We find that the best candidates leave subordinates feeling inspired or excited to learn from them.

A Googler from a different function is unlikely to have any interest in a particular job being filled but has a strong interest in keeping the quality of hiring high.

“This is a great candidate—strong technical interview scores, clearly very smart and well-qualified—but sufficiently arrogant that none of the interviewers want him on their team. This is a great candidate, but not for Google.”

But by far the best recruiting technique is having a core of remarkable people.

So how do you create your own self-replicating staffing machine? Set a high bar for quality. Before you start recruiting, decide what attributes you want and define as a group what great looks like. A good rule of thumb is to hire only people who are better than you. Do not compromise. Ever. Find your own candidates. LinkedIn, Google+, alumni databases, and professional associations make it easy. Assess candidates objectively. Include subordinates and peers in the interviews, make sure interviewers write good notes, and have an unbiased group of people make the actual hiring decision. Periodically return to those notes and compare them to how the new employee is doing, to refine your assessment capability. Give candidates a reason to join. Make clear why the work you are doing matters, and let the candidate experience the astounding people they will get to work with.

If you’re committed to transforming your team or your organization, hiring better is the single best way to do it. It takes will and patience, but it works. Be willing to concentrate your people investment on hiring. And never settle.

In most organizations, you join and then have to prove yourself. At Google, there’s such faith in the quality of the hiring process that people join and on their first day are trusted and full members of their teams.

WORK RULES…FOR SELECTING NEW EMPLOYEES Set a high bar for quality. Find your own candidates. Assess candidates objectively. Give candidates a reason to join.

Does your manager trust you? I’m sure she doesn’t hide her jewelry when you enter the room, but if you thought you were ready for a promotion, could you promote yourself? If you wanted to spend one day a week working on a side project or organizing lectures for other employees, and you figured out a way to still get your job done, could you? Is there a limit to how many sick days you can take? Just as important, do you trust your manager? Does she sponsor and fight for you and help you get work done? If you’re thinking about taking another job, can you talk to her about it? This is the kind of manager we’d all love to have, but few of us have actually enjoyed.

A traditional manager controls your pay, your promotions, your workload, your coming and going, whether you have a job or not, and these days even reaches into your evenings and weekends. While a manager doesn’t necessarily abuse any of these sources of power, the potential for abuse exists.

I cannot accept your canon that we are to judge Pope and King unlike other men, with a favourable presumption that they did no wrong. If there is any presumption it is the other way against holders of power, increasing as the power increases.… Great men are almost always bad men, even when they exercise influence and not authority: still more when you superadd the tendency or the certainty of corruption by authority. There is no worse heresy than that the office sanctifies the holder of it. That is the point at which… the end learns to justify the means.

Managers aren’t bad people. But each of us is susceptible to the conveniences and small thrills of power.

Now, budgets may seem different. The whole point of a budget is that you’re supposed to stay within it. But at Google you should always, always make room for a truly exceptional person, even if it puts you over budget. And yet many of us have such a built-in respect for following norms that it feels revolutionary to suggest that.

Managers have a tendency to amass and exert power. Employees have a tendency to follow orders. What’s mind-blowing is that many of us play both roles, manager and employee, at the same time. We each have experienced the frustration of a controlling manager, and we have each experienced the frustration of managing people who just won’t listen.

“Does your manager trust you?” is a profound question. If you believe people are fundamentally good, and if your organization is able to hire well, there is nothing to fear from giving your people freedom.

The first step to mass empowerment is making it safe for people to speak up.

This is why we take as much power away from managers as we can. The less formal authority they have, the fewer carrots and sticks they have to lord over their teams, and the more latitude the teams have to innovate.

To mitigate our innate human tendency to seek hierarchy, we try to remove the signifiers of power and status. For example, as a practical matter there are really only four meaningful, visible levels at Google: individual contributor, manager, director, and vice president. There’s also a parallel track for technical people who remain individual contributors throughout their careers. Progression through these levels is a function of a person’s scope, impact, and leadership. People of course care about promotions, and promotions to director and executive are very big deals.

If you want a nonhierarchical environment, you need visible reminders of your values. Otherwise, your human nature inevitably reasserts itself. Symbols and stories matter.

‘If you have facts, present them and we’ll use them. But if you have opinions, we’re gonna use mine.’ ”

Relying on data—indeed, expecting every conversation to be rooted in data—upends the traditional role of managers. It transforms them from being providers of intuition to facilitators in a search for truth, with the most useful facts being brought to bear on each decision.

People make all kinds of assumptions—guesses, really—about how things work in organizations. Most of these guesses are rooted in sample bias.

Working with much more senior people has only a small effect. Fifty-one percent of all people nominated for promotion were promoted. For those who worked with much more senior people, the promotion rate was 54 percent. A little higher, but not much. The product area doesn’t matter. There are occasional differences of a few percentage points in one year or another, but in general your odds of promotion are the same no matter what you work on. Bad feedback doesn’t hurt you. In fact, almost every person who gets promoted has constructive feedback in their promotion materials. What ruins someone’s chances is evidence of something seriously wrong, such as poorly organized or consistently buggy code. The other warning sign is a conspicuous absence of information. A promotion packet that has no constructive feedback is actually a warning sign to review committees. Promotion candidates shouldn’t be afraid to solicit and receive less-than-glowing feedback, since it won’t derail them, and it will give them explicit coaching on how to improve. It turns out that when you present people with reality, they want to get better. Where your project is based doesn’t affect your ability to get promoted. For example, the promotion rate at our headquarters in Mountain View is virtually the same as elsewhere.

In 2010 alone, we conducted 8,157 A/B tests and more than 2,800 one-percent tests. Put another way, every single day in 2010 we ran more than thirty experiments to uncover what would best serve our users. And this was just for our search product.

Too often, management makes a decision that applies unilaterally to the entire organization. What if management is wrong? What if someone has a better idea? What if the decision works in one country but not another? It’s crazy to me that companies don’t experiment more in this way!

—and a sweeping change to our pay philosophy that we implemented in 2010, which included a 10 percent salary increase for everyone in the company. Until then, our salaries had been quite low, but as Googlers started buying homes and raising families, having a higher fixed wage became more important. We saw the level of satisfaction with salaries shrink over time, and acted. (Though, sadly, both Larry and Sergey, who take only $1peryearinsalary,declinedmyoffertoraisetheirsalariesby10percent\dots to$1.10 per year.)

The reality is that every issue needs a decision maker. Managed properly, the result of these approaches is not some transcendent moment of unanimity. Rather, it is a robust, data-driven discussion that brings the best ideas to light, so that when a decision is made, it leaves the dissenters with enough context to understand and respect the rationale for the decision, even if they disagree with the outcome.

Escalate to the next layer of the company and present the facts. If they can’t decide, escalate again. In our company, eventually Larry Page will break the tie.

But hierarchy in decision-making is important. It’s the only way to break ties and is ultimately one of the primary responsibilities of management.

Instead, decisions should be made at the lowest possible level of an organization. The only questions that should rise up the org chart are ones where, Serrat continues, “given the same data and information,” more senior leaders would make a different decision than the rank and file.

As a leader, giving up status symbols is the most powerful message you can send that you care about what your teams have to say.

The truth is that people usually live up to your expectations, whether those expectations are high or low.

But it does work. You just need to fight the petty seductions of management and the command-and-control impulses that accompany seniority. Organizations put tremendous effort into finding great people but then restrict their ability to have impact on any area but their own tasks.

What managers miss is that every time they give up a little control, it creates a wonderful opportunity for their team to step up, while giving the manager herself more time for new challenges.

WORK RULES…FOR MASS EMPOWERMENT Eliminate status symbols. Make decisions based on data, not based on managers’ opinions. Find ways for people to shape their work and the company. Expect a lot.

Improve performance by focusing on personal growth instead of ratings and rewards

As children we line up from shortest to tallest. We’re graded and told we are outstanding, satisfactory, or need improvement. As we get older we are ranked in our classes and take tests that compare us to national averages. We apply to university, mindful of how each school is ranked. Our first twenty years are spent being compared to others. It’s no wonder, then, that as adults we re-create those same conditions when we design our work environments. It’s what we know.

Performance management as practiced by most organizations has become a rule-based, bureaucratic process, existing as an end in itself rather than actually shaping performance. Employees hate it. Managers hate it. Even HR departments hate it.

OKRs, or Objectives and Key Results. The results must be specific, measurable, and verifiable; if you achieve all your results, you’ve attained your objective. For example, if the objective is to improve search quality by x percent, key results that contribute to that would be better search relevance (how useful the results are to the user), and latency (how quickly the results show up). It’s important to have both a quality and an efficiency measure, because otherwise engineers could just solve for one at the expense of the other. It’s not enough to give you a perfect result if it takes three minutes. We have to be both relevant and fast.

We deliberately set ambitious goals that we know we won’t be able to achieve in all cases. If you’re achieving all your goals, you’re not setting them aggressively enough.

So at the beginning of each quarter, Larry sets OKRs for the company, triggering everyone else to make sure their own personal OKRs roughly sync with Google’s. We don’t let the perfect be the enemy of the good. Once you see the company’s goals, it’s easy enough to compare them to your own. If they’re wildly out of step, either there’s a good reason or you refocus. In addition, everyone’s OKRs are visible to everyone else in the company on our internal website, right next to their phone number and office location. It’s important that there’s a way to find out what other people and teams are doing, and motivating to see how you fit into the broader picture of what Google is trying to achieve. Finally, Larry’s OKRs, followed by his quarterly report on how the company has performed, set the standard for transparency in communication and an appropriately high bar for our goals.

Having goals improves performance.113 Spending hours cascading goals up and down the company, however, does not.

Until 2013, every Googler received a performance rating score at the end of each quarter. The 41-point rating scale ran from 1.0 (awful) to 5.0 (astounding). Roughly speaking, below 3.0 meant you occasionally or consistently missed expectations, 3.0 to 3.4 meant you met them, 3.5 to 3.9 meant you exceeded, 4.0 to 4.4 was “strongly exceeded,” 4.4 to 4.9 indicated “approaching astounding performance,” and a 5.0 was “astounding.” The average rating was between 3.3 and 3.4, and if someone had an average of 3.7 or higher for a few quarters, they were often promoted. Nothing revolutionary here.

In late 2013, we moved more than 6,200 Googlers, representing almost 15 percent of the company, to a 5-point rating scale: needs improvement, consistently meets expectations, exceeds expectations, strongly exceeds expectations, and superb.

Were the right low performers identified? Were the right people identified for promotion? Were the discussions meaningful? Was the process fair?

On the other hand, the soul of performance assessment is calibration.

Calibration adds a step. But it is critical to ensure fairness. A manager’s assessments are compared to those of managers leading similar teams, and they review their employees collectively: A group of five to ten managers meet and project on a wall their fifty to a thousand employees, discuss individuals, and agree on a fair rating. This allows us to remove the pressure managers may feel from employees to inflate ratings. It also ensures that the end results reflect a shared expectation of performance, since managers often have different expectations for their people and interpret performance standards in their own idiosyncratic manner—just like in school, where some teachers were easy graders and others were tough. Calibration diminishes bias by forcing managers to justify their decisions to one another. It also increases perceptions of fairness among employees.

As a manager, you want to tell people not only how they did, but also how to do better in the future. The question is: What is the most effective way to deliver those two messages? The answer: Do it in two distinct conversations.

Intrinsic motivation is the key to growth, but conventional performance management systems destroy that motivation. Almost everyone wants to improve. Traditional apprenticeship models are based on this notion. An inexperienced worker wants to learn, and will learn best when paired with a more expert partner who teaches them. Remember the first time you rode a bike, or learned to swim, or drove a car? The thrill of mastery, of accomplishment, is a powerful motivator.

They went on to demonstrate that intrinsic motivation drives not just higher performance, but also better personal outcomes in terms of greater vitality, self-esteem, and well-being.119 Workplaces that permit employees more freedom tap into that natural intrinsic motivation, which in turn helps employees feel even more autonomous and capable.

As long as ratings are directly linked to pay and career opportunities, every employee has this incentive to exploit the system.

Never have the conversations at the same time. Annual reviews happen in November, and pay discussions happen a month later. Everyone at Google is eligible for stock grants, but those decisions are made a further six months down the line.

“Traditional performance management systems make a big mistake. They combine two things that should be completely separate: performance evaluation and people development. Evaluation is necessary to distribute finite resources, like salary increases or bonus dollars. Development is just as necessary so people grow and improve.”121 If you want people to grow, don’t have those two conversations at the same time. Make development a constant back-and-forth between you and your team members, rather than a year-end surprise.

His peers, however, saw the real Sam. They found him to be political, combative, and a bully. And I learned what they thought because once a year every Googler receives annual feedback not just from their manager, but also from their peers. When it’s time to conduct annual reviews, Googlers and their managers select a list of peer reviewers that includes not just peers, but also people junior to them.

At Google it doesn’t quite work that way. By now you’ll guess that promotion decisions, like rating decisions, are made by committees. They review people who are up for promotion and calibrate them against promoted people from prior years and well-defined standards, to ensure fairness.

Peer feedback is an essential part of the technical promotion packet that committees review.

There’s just one other twist. Googlers working in engineering or product management can nominate themselves for promotion.

We put the same care into our reviews out of necessity. Google’s revenues and headcount have grown roughly 20 to 30 percent in each of the past five years. We do our best to hire people who have a proven aptitude for learning, and then do everything we can to help them grow as fast as they can. Making sure our people are developing is not a luxury. It’s essential for our survival. But the fundamental concepts we’ve had to evolve make up a language that translates to just about any company.

First, set goals correctly. Make them public. Make them ambitious. Second, gather peer feedback. There is a range of online tools, not the least of which is Google Sheets, that allows you to create surveys and compile the results. (Type “Google Spreadsheets survey form” into your browser.) People don’t like being labeled, unless they are labeled as extraordinary. But they love useful information that helps them do their jobs better. It’s this latter piece that most companies miss. Every company has some kind of evaluation system that is then used to distribute rewards. Few have equally disciplined mechanisms for development. Third, for evaluation, adopt some kind of calibration process. We prefer meetings where managers sit together and review people as a group. It takes more time, but it gives you a reliable, just process for assessment and decision-making. A side effect is that it’s good for the culture for people to sit together, reconnect, and affirm what we value. In-person meetings are most efficient for companies with up to ten thousand people. After that, you need an awful lot of conference rooms to fit everyone. We keep at it and make it work for more than fifty thousand people because it serves our people well. Fourth, split reward conversations from development conversations. Combining the two kills learning. This holds true at companies of any size.

Focus instead on what does matter: a fair calibration of performance against goals, and earnest coaching on how to improve. The Lisa Simpson in all of us wants to be evaluated because she wants to be the best. She wants to grow. All you have to do is tell her how.

WORK RULES…FOR PERFORMANCE MANAGEMENT Set goals correctly. Gather peer feedback. Use a calibration process to finalize ratings. Split rewards conversations from development conversations.

“instead of a massive group of average performers dominating… through sheer numbers, a small group of elite performers [dominate] through massive performance.”130 Most organizations undervalue and underreward their best people, without even knowing they are doing it.

What most organizations miss is that people in the bottom tail represent the biggest opportunity to improve performance in your company, and the top tail will teach you exactly how to realize that opportunity.

So rather than following the traditional path of making “poor performance” the kiss of death, we decided to take a different approach: Our goal is to tell every person in the bottom 5 percent that they are in that group. That is not a fun conversation to have. But it’s made easier by the message we give these people: “You are in the bottom 5 percent of performers across all of Google. I know that doesn’t feel good. The reason I’m telling you this is that I want to help you grow and get better.” In other words, this isn’t a “shape up or ship out” conversation; it’s a sensitive talk about how to help someone develop.

Poor performance is rarely because the person is incompetent or a bad person. It’s typically a result of a gap in skill (which is either fixable or not) or will (where the person is not motivated to do the work).

When they don’t, we first offer a range of training and coaching to help them build their capabilities. Note that this is very different from the typical approach of hiring people and then trying to train them into being stars. Our interventions here are for the small handful of people who struggle most, rather than for everyone. If that doesn’t work, we then help the person find another role within Google. Typically, this results in the person’s performance improving to average levels. This may not sound like much, but think about it this way: Out of a group of a hundred people, Jim was one of the five worst performers. After this intervention, Jim was about the fiftieth-best performer.132 Not a superstar, but Jim is now contributing more than forty-nine other people, where before he had been better than only three or four people. What would your company be like if all the worst people got that much better? And if even the bottom forty-nine were still better than the competition?

This cycle of investing in the bottom tail of the distribution means your teams improve… a lot. People either improve dramatically or they leave and succeed elsewhere.

if you believe people are fundamentally good and worthy of trust, you must be honest and transparent with them. That includes telling them when they are lagging behind in their performance. But having a mission-driven, purposeful workplace also requires that you approach people with sensitivity. Most people who are performing poorly know it and want to get better. It’s important to give them that chance.

At the same time, the top tail, the very best performers, experience a company differently than average or mediocre performers do. Our data show us that they find it easier to get things done, feel more valued, feel that their work is more meaningful, and leave the company at one-fifth the rate that our lowest performers do. Why? Because top performers live in a virtuous cycle of great output, great feedback, more great output, and more great feedback. They get so much love on a daily basis that the extra programs you might offer can’t actually make them much happier.

More important is to learn from your best performers.xlvii Every company has the seeds of its future success in its best people, yet most fail to study them closely. This is a missed opportunity, because as Groysberg demonstrates, high performance is highly context dependent. Benchmarking and best practices tell you what worked elsewhere, but not what will work for you. In contrast, understanding precisely what makes your best people succeed in your unique environment is the natural extension of Groysberg’s findings. If success depends on specific, local conditions, then you are best served by studying the interplay of high performance and those local conditions.

Engineers at Google deeply believed that managers don’t matter. On the face of it, that may sound preposterous. But you have to understand how much engineers hate management. They don’t like managers and they certainly don’t want to become managers. Engineers generally think managers are at best a necessary evil, but mainly they get in the way, create bureaucracy, and screw things up. It was such a deeply held belief that in 2002 Larry and Sergey eliminated all manager roles in the company.

Our hiring credo was that an engineering manager had to be at least as technically capable as her team.xlviii When that wasn’t the case, the manager wasn’t respected and was known as a NOOP, a term borrowed from computer science that means “no operation performed.”

Career decisions were made fairly. Performance was fairly assessed and promotions were well deserved. Their personal career objectives could be met, and their manager was a helpful advocate and counselor. Work happened efficiently. Decisions were made quickly, resources were allocated well, and diverse perspectives were considered. Team members treated each other nonhierarchically and with respect, relied on data rather than politics to make decisions, and were transparent about their work and beliefs. They were appropriately involved in decision-making and empowered to get things done. They had the freedom to manage the balance between work and their personal lives.

Teams working for the best managers also performed better and had lower turnover. In fact, manager quality was the single best predictor of whether employees would stay or leave, supporting the adage that people don’t quit companies, they quit bad managers.

The next year, those moving to better managers saw significant improvements on six of the forty-two items. And the biggest changes were on questions that measured retention, trust in performance management, and career development. Switching to a worse manager was—by itself—enough to transform someone’s experience of Google, chipping away at their trust in the company and causing them to consider quitting.

The 8 Project Oxygen Attributes Be a good coach. Empower the team and do not micromanage. Express interest/concern for team members’ success and personal well-being. Be very productive/results-oriented. Be a good communicator—listen and share information. Help the team with career development. Have a clear vision/strategy for the team. Have important technical skills that help advise the team.

Sample UFS Feedback Questionnaire My manager gives me actionable feedback that helps me improve my performance. My manager does not “micromanage” (i.e., get involved in details that should be handled at other levels). My manager shows consideration for me as a person. My manager keeps the team focused on our priority results/deliverables. My manager regularly shares relevant information from his/her manager and senior leadership. My manager has had a meaningful discussion with me about my career development in the past six months. My manager communicates clear goals for our team. My manager has the technical expertise (e.g., coding in Tech, accounting in Finance) required to effectively manage me. I would recommend my manager to other Googlers.

Divorcing developmental and evaluative feedback is essential.

The best way to improve is by talking to those providing feedback and asking them exactly what they hope you would do differently.

Care about upgrading your organization. Everyone says they do, but few really take action. As a team leader, a manager, or an executive, you have to be willing to act personally on the results you see, changing your own behavior if needed, and to be consistent over time in staying focused on these issues. Gather the data. Group your managers by performance and employee survey results, and see if there are differences. Then interview them and their teams to find out why. If you’re a small team or organization, simply ask people what they value in great managers. Or failing all that, start with our Oxygen checklist. Survey teams twice a year and see how managers are doing. A variety of companies provide survey applications. We rely of course on Google products, specifically Google Sheets, which can send out surveys called Forms and has the advantage of being easy to use, easy to export, and low cost. Have the people who are best at each attribute train everyone else. We ask our Great Manager Award recipients to train others as a condition of winning the award.

Studying your strongest people closely and then building programs to measure and reinforce their best attributes for the entire company changes the character of your company. If you also are able to get those who struggle the most to be substantially better, you’ll have created a cycle of constant improvement.

WORK RULES…FOR MANAGING YOUR TWO TAILS Help those in need. Put your best people under a microscope. Use surveys and checklists to find the truth and nudge people to improve. Set a personal example by sharing and acting on your own feedback.

American companies spent $156,200,000,000 on learning programs in 2011,141 a staggering sum. A hundred and thirty-five countries have GDPs below that amount. Roughly half the money went to programs put on by the companies themselves, and the other half was paid to outside vendors. The average employee received thirty-one hours of training over the year, which works out to more than thirty minutes each week. Most of that money and time is wasted.

• Check out this quote. @gabrielhdm

deliberate practice: intentional repetitions of similar, small tasks with immediate feedback, correction, and experimentation.

But perhaps you don’t want to have your best salesperson teaching. After all, shouldn’t she be focused solely on selling? I’d argue that’s a shortsighted move, because individual performance scales linearly, while teaching scales geometrically.

But for most organizations, there’s a shortcut. Skip the graduate-school math and just compare how identical groups perform after only one has received training.

When I was with another company, each year there would be a new wave of mandatory sales training, guaranteed—we were told—to boost sales performance. But putting everyone through a solution that you think will work doesn’t mean it will. A thoughtfully designed experiment, and the patience to wait for and measure the results, will reveal reality to you. Your training program may work, or it may not. The only way to know for sure is to try it on one group and compare it to another group.

A learning organization starts with a recognition that all of us want to grow and to help others grow. Yet in many organizations, employees are taught and professionals do the teaching. Why not let people do both?

WORK RULES…FOR BUILDING A LEARNING INSTITUTION Engage in deliberate practice: Break lessons down into small, digestible pieces with clear feedback and do them again and again. Have your best people teach. Invest only in courses that you can prove change people’s behavior.

Pay Unfairly Why it’s okay to pay two people in the same job completely different amounts

Pay unfairly. Celebrate accomplishment, not compensation. Make it easy to spread the love. Reward thoughtful failure.

At Google, everyone is eligible for stock awards, at every level of the company and in every country. There are differences in the target award you’re eligible for, based on your job and the local market, but the biggest determinant of what you actually receive is your performance. We don’t have to include everyone, but we do. It’s good business, and it’s the right thing to do.

At the same time, companies in lower-margin industries have found that paying people well—even when they don’t need to—can be smart business.

Pay unfairly: Your best people are better than you think, and worth more than you pay them

market. An average performer might get a 2–3 percent salary increase each year, and an exceptional performer might get 5–10 percent, depending on the company.

people are on average underpaid relative to their contribution early in their careers, and overpaid later in their careers.169 Internal pay systems don’t move quickly enough or offer enough flexibility to pay the best people what they are actually worth.

Fairness in pay does not mean everyone at the same job level is paid the same or within 20 percent of one another.

Fairness is when pay is commensurate with contribution.liv As a result, there ought to be tremendous variance in pay for individuals.

Superior programmers generated about $11,000 more value each year than average programmers, in 1979 dollars.

As the data show, exceptional contributors perform at a level so far above that of most, that they are able to pull the average up well past the median.

“Ten percent of productivity comes from the top percentile and 26% of output derives from the top 5% of workers.”

In other words, they found that the top 1 percent of workers generated ten times the average output, and the top 5 percent more than four times the average.

How many people would you trade for your very best performer? If the number is more than five, you’re probably underpaying your best person. And if it’s more than ten, you’re almost certainly underpaying.

In fact, we have many cases where people at more “junior” levels make far more than average performers at more “senior” levels. It’s a natural result of having greater impact, and a compensation system that recognizes that impact.

To make these kinds of extreme rewards work, you need two capabilities. One is a very clear understanding of what impact is derived from the role in question (which requires a complementary awareness of how much is due to context: Did the market move in a lucky way? How much of this was a result of a team effort or the brand of the company? Is the achievement a short- or long-term win?). Once you can assess impact, you can look at your available budget and decide what the shape of your reward curve ought to be. If the best performer is generating ten times as much impact as an average performer, they shouldn’t necessarily get ten times the reward, but I’d wager they should get at least five times the reward.180 If you’re adopting a system like this, the only way to stay within budget is to give smaller rewards to the poorer performers, or even the average ones. That won’t feel good initially, but take comfort in knowing that you’ve now given your best people a reason to stay with you, and everyone else a reason to aim higher.

The other capability is having managers who understand the reward system well enough that they can explain to the recipient, and to others who might ask if word were to get out, exactly why a reward was so high and what any employee can do to achieve a similar reward.

In other words, the allocation of extreme awards must be just. If you can’t explain to employees the basis for such a wide range of awards, and can’t give them specific ways to improve their own performance to these superb levels, you will breed a culture of jealousy and resentment. Maybe that’s why most companies don’t bother. It’s hard work to have pay ranges where someone can make two or even ten times more than someone else. But it’s much harder to watch your highest-potential and best people walk out the door. It makes you wonder which companies are really paying unfairly: the ones where the best people make far more than average, or the ones where everyone is paid the same.

We also shifted these programs from providing monetary awards to experiential awards. This was a profound change for the better. People think about experiences and goods differently than about monetary awards. Cash is evaluated on a cognitive level. A cash award is valued by calculating how it compares to your current salary, or to what you could buy with it. Is it as big as a paycheck or smaller? Can it buy a cellphone or will it help me get a new car? And because money is fungible, as often as not it’s spent on staples rather than splurging on a pair of Christian Louboutin shoes or a massage, and fades from memory. Non-cash awards, whether they are experiences (a dinner for two) or gifts (a Nexus 7 tablet), trigger an emotional response.

The result was astounding. Despite telling us they would prefer cash over experiences, the experimental group was happier. Much happier. They thought their awards were 28 percent more fun, 28 percent more memorable, and 15 percent more thoughtful. This was true whether the experience was a team trip to Disneyland (it turns out most adults are still kids on the inside) or individual vouchers to do something on their own.

The joy of money is fleeting, but memories last forever.

We’ve added a strong emphasis on accumulating experiences, rather than just money. We recognize publicly through experiential awards and reward privately through substantial differentiation in bonus and stock. And Googlers are happier as a result.

The simplicity of the design is part of the magic. gThanks makes it easy to send thank-you notes by entering someone’s name and then hitting “kudos” and typing up a note. Why is this any better than sending them an email? Because kudos are posted publicly for other people to see and can be shared via Google+. Broadcasting a compliment makes both the giver and the receiver happier. And it’s actually fewer keystrokes than writing a private email, which makes it easier to do. To our astonishment, after we launched gThanks we saw a 460 percent increase in the use of kudos compared to a year earlier, when Googlers had to go to a special kudos website, with more than a thousand Googlers visiting the new version every day.

At Google, any employee can give anyone else a $175 cash award, with no management oversight or sign-off required.

We’ve found that trusting people to do the right thing generally results in them doing the right thing. Allowing people to reward one another facilitates a culture of recognition and service, and is a way to show employees that they should be thinking like owners rather than serfs.

Finally, it’s also important to reward failure. While incentives and goals matter, the act of considered risk-taking itself needs to be rewarded, especially in the face of failure. Otherwise, people simply won’t take risks.

The biggest lesson was that rewarding smart failure was vital to support a culture of risk-taking.

What’s more, those members of the organization that many assume to be the best at learning are, in fact, not very good at it. I am talking about the well-educated, high-powered, high-commitment professionals who occupy key leadership positions in the modern corporation.… Put simply, because many professionals are almost always successful at what they do, they rarely experience failure. And because they have rarely failed, they have never learned how to learn from failure.… [T]hey become defensive, screen out criticism, and put the “blame” on anyone and everyone but themselves. In short, their ability to learn shuts down precisely at the moment they need it the most.

He wanted to make sure that bad news was shared as openly as good news, so that he and his leaders were never blind to what was really happening and to reinforce the importance of learning from mistakes.

If your best person is worth ten of the average people, you must pay “unfairly.” Otherwise, you’re just giving them a reason to quit.

At the same time, when you do reward people, make sure to sprinkle in experiences, not just cash. Few people look back on their lives as a series of paychecks. They remember the conversations, lunches, and events with colleagues and friends. Celebrate success with actions, not dollars.

Trust your people enough to let them recognize each other, as well. It may be kudos and nice words, or it may be small awards. A gift card for a local coffee shop or a bottle of wine sent to an understanding spouse as a thank-you for the employee working late. Give employees the freedom to care for each other.

Ease the pain of failure to leave room for learning. As Larry often says: If your goals are ambitious and crazy enough, even failure will be a pretty good achievement.

WORK RULES…FOR PAYING UNFAIRLY Swallow hard and pay unfairly. Have wide variations in pay that reflect the power law distribution of performance. Celebrate accomplishment, not compensation. Make it easy to spread the love. Reward thoughtful failure.

We use our people programs to achieve three goals: efficiency, community, and innovation.

A sense of community helps people do their best work just as surely as increasing efficiency does by sweeping away minor chores and distractions.

We also work to create a community within the company. As discussed in chapter 2, the Q&A portion of TGIF is the most critical part of the meeting, as any Googler can ask any question, ranging from “Why is my chair so uncomfortable?” to “Are we sufficiently sensitive to user concerns about privacy?” Events like the gTalent shows, where you suddenly realize a saleswoman is also a champion equestrian acrobat (that’s doing gymnastics on the back of a moving horse!) and an engineer is a nationally ranked ballroom dancer, or Random Lunches, where people are set up with Googlers they’ve never met to get to know each other over lunch, are easy to coordinate and make the place seem smaller and more intimate. These programs cost almost nothing except the time spent dreaming them up (though we do offer snacks and drinks at some of them—that’s optional).

Ronald Burt, a sociologist at the University of Chicago, has shown that innovation tends to occur in the structural holes between social groups. These could be the gaps between business functional units, teams that tend not to interact, or even the quiet person at the end of the conference table who never says anything. Burt has a delicious way of putting it: “People who stand near the holes in a social structure are at higher risk of having good ideas.”

More significantly, Google isn’t some sweetly baited trap designed to trick people into staying at the office working all the time. Why would we care how many hours people work, if their output is good? And the reality is that where you work shouldn’t matter at all. It’s absolutely necessary to have teams come together, and we get great product ideas and partnerships resulting from people bumping into each other. But do I want people in the office from 9:00 a.m. to 5:00 p.m.? Is there any reason I’d want them there earlier? Or later? People should and do come and go as they please. Many engineers don’t roll in until 10:00 a.m. or later. After they head home, there’s another burst of activity online in the evenings as people log back in. It’s not up to us to tell people when they should be creative.

Find ways to say yes. Employees will reward you by making your workplace more vibrant, fun, and productive.

Put another way, the average US company spends 4 percent a year on salary increases: roughly 3 percent for annual increases and 1 percent for promotions. I bet if you asked any employee if they’d want a program like this at the price of getting a 2.9 percent raise instead of a 3.0 percent raise, almost all would say yes.

Imagine how work would feel for you if, instead of people coming to you with anxiety and desperation, they shared their gratitude for making their lives easier and for being there when they most needed support.

WORK RULES…FOR EFFICIENCY, COMMUNITY, AND INNOVATION Make life easier for employees. Find ways to say yes. The bad stuff in life happens rarely… be there for your people when it does.

In their book Nudge, Richard Thaler and Cass Sunstein, professors at the University of Chicago and Harvard Law School, document at length how an awareness of the flaws in our brains can be used to improve our lives.

A sense of humanity compels us to be thoughtful, compassionate, and above all transparent when deploying nudges. The goal is not to supplant decision-making, but to replace thoughtlessly or poorly designed environments with structures that improve health and wealth without limiting freedom.

A newly hired person actually destroys value.

No one physically dies of bad management (though perhaps one’s soul does, a little bit).

It’s why shopping is so exhausting. ‘You need to focus your decision-making energy. You need to routinize yourself. You can’t be going through the day distracted by trivia.’

By telling managers exactly what to do, we actually took one annoying item off their to-do list.

Ask questions, lots of questions! Schedule regular 1:1s with your manager. Get to know your team. Actively solicit feedback—don’t wait for it! Accept the challenge (i.e., take risks and don’t be afraid to fail… other Googlers will support you).

That’s because when you design for your users, you focus on what is the minimal, most elegant product required to achieve the desired outcome. If you want people to change behavior, you don’t give them a fifty-page academic paper or ahem a four-hundred-page book.

A Bay Area physical therapy center, PhysioFit, appears to see a substantially larger compliance rate. What do they do differently? They send a text message to all new patients: “PhysioFit Physical Therapy and Wellness offers text reminders. Reply with ‘Y’ to sign up.” The patient receives a text reminder for their appointments, as well as a daily reminder to perform their at-home therapy. Simple, free, and effective.

Ultimately, we are neither entirely rational nor entirely consistent. We’re influenced by countless small signals that nudge us in one direction or another, often without any deep intent behind the nudges.

WORK RULES…FOR NUDGING TOWARD HEALTH, WEALTH, AND HAPPINESS Recognize the difference between what is and what ought to be. Run lots of small experiments. Nudge, don’t shove.

Entitlement, the creeping belief that just because you receive something you deserve it, is another risk in our approach. In a sense it’s unavoidable. We are biologically and psychologically inclined to habituate to new experiences. People quickly become accustomed to what is being offered, and it becomes a baseline expectation rather than something wonderful and delightful.

A system like ours, which relies on people to be good and provides benefit of the doubt, is susceptible to bad actors.

The experience underscored not just the importance of listening to our people, but also the need to have a reliable channel for opinions well before decisions are made. We eventually assembled a group we call the Canaries, engineers of varying seniorities, selected based on their ability to both represent the views of the various constituencies within engineering and credibly communicate how and why decisions were made.

“A crisis is an opportunity to have impact. Drop everything and deal with the crisis.”

Innovation thrives on creativity and experimentation, but it also requires thoughtful pruning.

The key to balancing individual freedom with overall direction is to be transparent. People need to understand the rationales behind each action that might otherwise be viewed as a step down the slippery slope that leads you away from your values. And the more central your values are to how you operate, the more you need to explain.

The debate was important. And sparking a debate should never be a crime.

Human beings are complicated, thorny, messy things. But those unquantifiable qualities are also what make magic happen.

Some organizations will declare defeat, pointing to the smallest backsliding as evidence that people can’t be trusted, that employees need rules and oversight to force them to serve the company. “We tried it this way,” they’ll declare, “and look where it got us. Employees got mad, or wasted money, or wasted my time.” Other leaders will prove to be made of sterner stuff. Those of you who, in the face of fear and failure, persevere and hold true to your principles, who interpose yourselves between the forces and faces buffeting the organization, will mold the soul of the institution with your words and deeds. And these will be the organizations that people will want to be a part of.

WORK RULES…FOR SCREWING UP Admit your mistake. Be transparent about it. Take counsel from all directions. Fix whatever broke. Find the moral in the mistake, and teach it.

You either believe people are fundamentally good or you don’t. If you do believe they’re good, then as an entrepreneur, team member, team leader, manager, or CEO, you should act in a way that’s consistent with your beliefs. If people are good, they should be free.

Work is far less meaningful and pleasant than it needs to be because well-intentioned leaders don’t believe, on a primal level, that people are good. Organizations build immense bureaucracies to control their people. These control structures are an admission that people can’t be trusted. Or at best, they suggest that one’s baser nature can be controlled and channeled by some enlightened figure with the wisdom to know what is best. That the nature of man is bad, and must be forged through rules, rewards, and punishments.

Steven Pinker, in The Better Angels of Our Nature, argues that the world has become a better place over time, at least when measured by incidences of violence.

The question is not what management system is required to change the nature of man, but rather what is required to change the nature of work.

The “high-freedom” extreme is based on liberty, where employees are treated with dignity and given a voice in how the company evolves.

What’s beautiful here is that treating your people well is both a means to an end and an end in itself.

But if you want to become a high-freedom environment, here are the ten steps that will transform your team or workplace: Give your work meaning. Trust your people. Hire only people who are better than you. Don’t confuse development with managing performance. Focus on the two tails. Be frugal and generous. Pay unfairly. Nudge. Manage the rising expectations. Enjoy! And then go back to No. 1 and start again.

Google organizes the world’s information and makes it accessible and useful. Everyone who works here touches this mission, no matter how small the job. It draws people to the company and inspires them to stay, take risks, and perform at their highest levels.

Whatever you’re doing, it matters to someone. And it should matter to you. As a manager, your job is to help your people find that meaning.

If you believe human beings are fundamentally good, act like it. Be transparent and honest with your people, and give them a voice in how things work.

Give me a chance. Help me understand what your goals are, and let me figure out how to achieve them.

Organizations often act as if filling jobs quickly is more important than filling jobs with the best people. I’ve had salespeople tell me “Bad breath is better than no breath,” meaning that they’d rather have the revenue that comes from a mediocre performer in a territory hitting 70 percent of their sales quota than have the territory empty. But it is an error ever to compromise on hiring quality. A bad hire is toxic, not only destroying their own performance, but also dragging down the performance, morale, and energy of those around them. If being down a person means everyone else has to work harder in the short term, just remind them of the last jerk they had to work with. Hire by committee, set objective standards in advance, never compromise, and periodically check if your new hires are better than your old ones. The proof that you are hiring well is that nine out of ten new hires are better than you are. If they’re not, stop hiring until you find better people. You’ll move more slowly in the short term, but you’ll have a much stronger team in the end.

It’s simply not pleasant to confront your own weaknesses. If you marry criticism with consequence, if people feel that a miss means that they will be hurt professionally or economically, they will…

Once a performance period has ended, then have a direct discussion about the goals that were set and what was achieved, and how rewards are tied to performance. But that conversation should be entirely about outcomes, not about process. Goals were either missed, met, or exceeded…

In all cases, don’t rely solely on the manager to come up with an accurate picture of how people are doing. For development, solicit input from peers, even if it’s as simple as asking or sending out a short questionnaire. For performance evaluation, require managers to sit…

Put your best people under a microscope. Through a combination of circumstance, skill, and grit they have figured out how to excel. Identify not just your best all-around athletes, but the best specialists. Don’t find the best salesperson; find the person who sells best to new accounts of a certain size. Find the person who excels at hitting golf balls at night in the rain. The more specific you can be in slicing…

And then use them not just as exemplars for others by building checklists around what they do, but also as teachers. One of the best ways to learn a skill is to teach it. Enlisting stars as faculty, even if it’s just for a thirty-minute coffee talk, will force them to articulate how they do what they do, and this very process helps them grow as well. If you’re exposed to one of these people as a coworker, observe them closely, pepper them with questions, and use the opportunity to suck every bit of knowledge out of them. At the same time, have compassion for your worst performers. If you’re getting hiring right, most of those who struggle do so because you’ve put them in the wrong role, not because they are inept. Help them…

Remember that performance follows a power law distribution in most jobs, no matter what your HR department tells you. Ninety percent or more of the value on your teams comes from the top 10 percent. As a result, your best people are worth far more than your average people. They might be worth 50 percent more than your average people or fifty times more, but they are absolutely worth more. Make sure they feel it. Even if you don’t have the financial resources to provide huge differences in pay, providing greater differences will mean something.

At the same time, be generous in your public recognition. Celebrate the achievements of teams, and make a point of cheering failures where important lessons were learned.

This isn’t a one-time effort. Building a great culture and environment requires constant learning and renewal. Don’t worry about trying to do everything at once. Experiment with one idea from this book or with a dozen, learn from the experiment, tweak the program, and try again.

If you believe people are good, then live your beliefs through your work.

WORK RULES Give your work meaning. Trust your people. Hire only people who are better than you. Don’t confuse development with managing performance. Focus on the two tails. Be frugal and generous. Pay unfairly. Nudge. Manage the rising expectations. Enjoy! And then go back to No. 1 and start again.

Strive for nirvana. Use data to predict and shape the future. Improve relentlessly. Field an unconventional team.

I learned that to have the privilege of working on the cool, futuristic stuff, you had to earn the confidence of the organization.

If you’re an HR practitioner, you must constantly ask yourself whether the principle underpinning each rule is relevant to the case at hand, and fearlessly abandon practice and policy when the situation merits it.

So step one, and it’s a big step, is agreeing on a common set of definitions for all people data. Only then can you accurately describe what the company looks like.

Most companies, including Google until a few years ago, celebrate promotions but do nothing to reach out to the people who just missed the cut. Which is madness. It takes an hour or two to spot the folks you think will be upset and talk to them about how to continue growing.

HR people teach us about influencing and recognizing patterns in people and organizations; the consultants improve our understanding of the business and the level of our problem solving; the analytics people raise the quality of everything we do.

In the HR profession, it is an error to hire only HR people.

Yet everyone in People Operations has a few traits in common. Each one is a gifted problem solver. Each has a dose of intellectual humility, which makes them open to the possibilities that they could be wrong and always have more to learn. And each is tremendously conscientious, caring deeply about Googlers and the company.

And if, along the way, work in some companies stops being a means to an end and instead becomes a source of fulfillment, of happiness? If at the end of the day people feel energized and proud of what they’ve accomplished? That’s okay too.