Google is well known for innovation, but how can a culture of innovation be fostered in an organisation? People operations director, Liane Hornsey, shares some secrets from Google.

A company that has carved a reputation for pushing the envelope, Google has been consistently lauded as one of the most innovative companies in the world by the likes of Business Week and Fast Company – perhaps only paralleled by Apple, despite the current mixed reviews of Google Buzz.

Furthermore, Google has provided proof that innovation needn’t come at the expense of customer satisfaction, scoring successfully on the American Customer Satisfaction Index (ACSI), and leading ACSI founder Claes Fornell to comment: “The company seems to have an uncanny ability to understand its users and read the market right. They come out with so many new products [that] it’s just phenomenal. They provide customers with more, and for most of the stuff you don’t pay. It’s sort of a wining proposition no matter how they do it. The more content Google provides, the higher the likelihood that their customers will be more satisfied."

So what is it that enables Google to be so innovative? How can it consistently create these “winning propositions”? Is it something that’s in the water at Google HQ? Or is there a model that any organisation can follow?

With a McKinsey survey revealing that 94% of senior executives believe that people and culture are the twin keys to innovation, Liane Hornsey must hold many of the secrets in her role as people operations director EMEA. And whilst she is unwilling to reveal the finer details, she has divulged broader details about the three main factors that have led to Google becoming what she calls “the most innovative company of its size in the world”.

A strategic priority

First and foremost, Hornsey believes that Google have placed innovation as a strategic priority within the organisation – something that is easy to say, but not so easy to do. “All of our strategic processes – our planning process, our board process, our business plan, our three year plan – have innovation as the number one issue that we have to crack. So we look at innovation at the most senior level of the company before we even begin to talk about the numbers,” she explains. “An example of the way the board are committed to innovation is that very recently one of our competitors brought out a product that for the first time was vaguely interesting. Not a worry, but vaguely interesting. Our response was that the board decided to split the time that they spent together and spend 50% of the time only considering how to be innovative. They wouldn’t talk about anything else.”

Perhaps its most famous initiative to ensure that it fosters an environment in which its staff are free to innovate is Google’s 70-20-10 model. According to Hornsey, she is often asked by people whether this model is mere Google folklore – but she confirms that it is one of their standard practices.

“For our engineering population, which is roughly 50% of all Googlers, we tell them to work 70% of their time on their core job, 20% of their time on projects that are loosely connected with their core job (so if they work on search, then maybe 20% of their time looking at the fringes of search), and 10% of their time (i.e. a day a fortnight) thinking about whatever they want to think about. No meetings. No emails. Nothing. You spend a day a fortnight thinking big thoughts,” she explains.

“And so when people ask me how it is that Google is so innovative, how it is that we have the best products in the world, how it is that we are one of the most profitable and fast growing companies ever, that is the reason. We invest 10% of our people’s time to think big thoughts. And out of that 10% we have launched Picasa, Gmail, Google News, Google Apps and so on.”

Bureaucracy busting

Having provided their staff with the space and time they need to think, Google has also created the networks that allow their employees to share their thoughts, and build on eachother’s ideas. As Hornsey suggests, if you hire talented people, you need to put them together.

“One engineer may spend 10% of his time interested in how you get to the moon, so he blogs about this and we start a Twitter-type exchange. And we have those networks all over the company. Any Googler at any time can start an idea on any thread that can go through 20,000 people in a nanosecond. And these networks are huge and they are the basis on which we innovate. So somebody has an idea, someone adds idea B, somebody adds idea C, somebody adds idea D, they get on a videoconference or they may even fly to get together to talk about those ideas. And that is how products are born.”

And to further aid the transfer of knowledge and streamline communication channels, the company has worked hard to keep its bureaucracy to a bare minimum. As part of this, it has implemented ‘bureaucracy busters’ – regular sessions whereby the company picks the icons of bureaucracy such as the CFO or legal adviser, and asks staff to get online and brainstorm ideas to reduce the red tape, with the best ideas being implemented. This has led to a “bottom-up culture that is without hierarchy” according to Hornsey.

The greater good

The third reason for Google’s success at being an innovative hub according to Hornsey is its emphasis on data. “People think we’re very left field, but we are highly data-driven and highly analytical. We measure the hell out of innovation. All of our leaders, everyone in a management position, has a goal and has a bonus on how innovative they have been every quarter, and we measure that – and we measure it before we measure the numbers. It is the first question we ask: what did you do that was different this quarter, what did you do that was big this quarter, what thoughts have you had about how you are going to move to the next level, and maybe in the next hour we will get the numbers.”

So without giving away too many secrets, Hornsey has revealed the inner workings of Google – a culture that allows its people to challenge bureaucracy and feel enabled to be innovative; an emphasis on data; and making innovation part of the strategic process. And there is one final secret that she can reveal.

“The real reason that we have perhaps the most innovative culture of any company our size is because of our founders,” she concludes. “There is a lovely story which illustrates the risk-taking element of the Google culture. A very senior female employee went in to see Larry Page, one of our founders, and she was extremely worried before she went in. She sat down and said ‘I’ve made a really big mistake’. He said ‘How big?’ She said ‘$40 million a year big’. He said ‘That big!’ So they talked about it and he said to her at the end of their chat, ‘So what did you learn?’ She told him what she learned and as she got up to leave the room he said to her ‘I’m glad you made that mistake’. And that warm story permeates every hall of every office – and we have 50 odd around the world – of Google, because that tells you that our founders don’t mind you taking risks and even the financial downside if you really learn something that will be good for the business going forward.”