By Michelle Rafter
Mar. 22, 2015
Laszlo Bock photo provided by Google Inc.
If Google Inc. is a pioneer of people analytics, Laszlo Bock is guiding the wagon train.
Bock, 42, is the Internet giant’s senior vice president of people operations. Google dabbled with using data for hiring and other people practices before Bock joined the company nine years ago. Since then, the former General Electric Co. human resources executive and McKinsey & Co. consultant has helped elevate Google’s people-related number-crunching to world-class levels. He did it by applying the rigorous testing Google previously reserved for refining search algorithms and rolling out new products to how it hires, trains, manages and promotes.
The results have bordered on revolutionary.
People analytics helps Google process some 3 million applications annually to find the crème de la crème, the quarter of 1 percent of candidates who eventually are hired for their skills, aptitude and ability to fit into the company’s culture, a trait insiders call “Googliness.”
By using data analysis and testing to streamline hiring and other personnel moves, Google has seen its people operations group’s productivity rise 6 percent annually over the past five years. Today, the company’s HR staff delivers more services more efficiently at 73 percent of the cost structure it had in 2011 on a per-employee basis. That’s despite supporting 53,600 employees and hiring up to 5,000 people a year, all without outsourcing or increasing its use of vendors or consultants.
Google’s data-based workforce breakthroughs have landed the Internet giant at or near the top of U.S. and multinational best companies to work for lists four years running. Those designations are based as much on employees’ attitudes toward their managers, co-workers and workplace as on the company’s generous benefits and perks.
All this points back to Bock, a self-described nerd who hasn’t outgrown his love of video games and comic books, and who’s more Bruce Banner than Hulk, his favorite character. Colleagues and acquaintances describe him as an intellectually curious leader who loves research and puts growth and development ahead of ego and image, all while managing to be witty and fun.
“He’s passionate about making work better, and as a result, he invests a great deal of time and energy inside and outside Google disseminating knowledge,” said Adam Grant, a Wharton School management professor and author who has collaborated with Bock on various Google projects.
An Insider’s View of Google’s People Practices
You’ve probably never heard of Google employees’ revolt over meatless Mondays or the pie that set off an internal debate about Tibetan independence.
Barring some notable exceptions, Google Inc. has been famously closed-mouthed about its people practices — until now.
Laszlo Bock, the search engine giant’s senior vice president of people operations, peppers his new book, “Work Rules!” with previously untold details about how Google manages its 53,600-person workforce.
Being tight-lipped is the flip side of how transparent the company is with employees, Bock said in an interview with Workforce.
Google operates by a bottom-up mentality born of an engineering and software developer heritage that values ideas and innovation, regardless of where they come from. Among other things, that means sharing some of the company’s most sensitive software code with new employees from their first week on the job, and holding weekly Q&A sessions where anyone can ask top executives anything.
Under those circumstances, “the easiest way to not screw up something that’s highly confidential is to be very careful about what you share” with outsiders, Bock told Workforce.
In “Work Rules!” Bock gives readers an unheralded peek behind the curtains, “with a goal that lots of people and companies try it and imitate it,” he said.
Many perks Google is famous for offering are worth imitating and cost the company nothing. Vendors of on-site dry cleaning, haircuts and bike repairs willingly set up shop inside its offices because of the money they can make, Bock said. The point of offering such services isn’t to make people work longer hours, Bock writes in the book. “We do all this because it’s (mostly) easy, rewarding, and it feels right.”
That culture of transparency means employees police themselves. When Google switched to meatless Mondays in two of its 22 cafeterias in 2010, a debate erupted with a protest barbecue in reaction to the more limited meal choices and perception that the company was mandating an ethos that eating meat was unhealthy, Bock writes. A small minority who didn’t like the policy ransacked break rooms, threw forks away and mistreated kitchen staff. One anonymous employee wrote: “If you don’t want to provide us the traditional food benefit, then shut all the cafés down. Seriously stop this sh** or I’ll go to Microsoft, Twitter or Facebook where they don’t f*** with us.”
When Bock read the note at an all-hands meeting at the end of the monthlong experiment, “the room froze,” he writes. Most employees weren’t aware there was a problem and were appalled by their co-workers’ behavior. Many weighed in with support via email, meetings and private notes. Eventually the abuse and entitlement fell away. “The mores had shifted,” he writes.
Operating a business that empowers employees can lead to other internal tensions. In 2008, a company chef’s posting of a “Free Tibet Goji Chocolate Crème Pie” on the day’s menu went viral as Googlers debated for and against a Tibet free from Chinese rule, and for and against employees’ rights to freedom of speech, not realizing the chef’s intention was merely to indicate that, like all other food at Google, the pie was free of charge.
In the hours that followed, at least one employee threatened to quit if the company didn’t take action, according to the book. Workers’ internal messages about the pie set a record for the fastest time to reach more than 100 responses on a single topic, and then became the first to break 1,000. The chef was initially suspended from work for three days, but recalled the next day after Bock dug into the situation. The debate was important, he writes, “and sparking a debate should never be a crime.”
“Human beings are complicated, thorny, messy things,” Bock writes. “But those unquantifiable qualities are also what makes magic happen.”
—Michelle V. Rafter
True to that characterization, Bock shares what he’s learned in a new book, “Work Rules! Insights from Inside Google That Will Transform How You Live and Lead,” which was scheduled to be released earlier this month.
Google’s perks and efforts to develop better managers have been well-documented over the years. However, according to Bock, “Work Rules!” includes never-before-shared insider details and anecdotes. Among them, how employees — who call themselves “Googlers” — practically waged war over meatless Mondays and a goji berry chocolate pie.
In a Workforce interview, Bock said he was motivated to write a book after being asked about Google’s hiring, perks and people practices by everyone from business partners to visitors touring the $65.8 billion company’s Mountain View, California, headquarters.
“There’s a lot more science and rigor that could be brought to how companies think about people in service of making people happier and living more productive lives,” Bock said. “The book is an attempt to encapsulate that.”
The Google of today may seem like an unstoppable force with tentacles extending into every corner of the Internet economy, but the company’s standing as a tech powerhouse wasn’t always a foregone conclusion. When Bock joined Google in 2006, the then-8-year-old company was still a startup in many ways, one of multiple search engines of the era and fewer than 11,000 employees.
Bock, the son of Romanian immigrants who fled to the United States to escape dictator Nicolae Ceausescu, got an MBA from Yale University and then joined McKinsey. While there, he switched to HR because it was an undervalued practice area that could help him stand out in a sea of management consultants. He also saw it as the best way to influence how companies treated people. As he details in “Work Rules!” colleagues thought he was “committing professional suicide.”
Bock’s first in-house HR job was at GE in compensation and benefits. After three years, he was recruited to lead Google’s HR operations. It turned out to be a perfect fit. Google was and is an engineering and numbers-focused company, with close to 40 percent of employees in research and development. One reason Bock was attractive to the company “was because he had the same bent,” said Hal Varian, Google’s chief economist, who sits in on a weekly staff meeting with Bock.
Bock said Google’s analytics-driven approach to problem-solving appealed to him. When it comes to things like managing people, “We all believe in our hearts we’re good at it, we’re good with teams, with partners, but by definition we’re just average at it,” he said. “My thoughts were, if I think there’s a better way to do it, I better be able to prove it.”
From 25 Interviews to Four
Hiring was among the first activities to get a Bock makeover. By the mid-2000s, Google executives’ goal of finding candidates who meshed with the culture meant filling open positions could take six months. Candidates went through 15 to 25 interviews each, a process that took 250 hours of employee time. Executives averaged a day a week on hiring.
To change that, Bock had a doctorate analyst on his staffing team study the process. The analysis showed that four interviews were enough to predict candidate success with an 86 percent confidence rate. Google trimmed time to hire to 47 days. According to “Work Rules!” by trimming interviews and streamlining in other ways, the time the average Google employee spent a week on hiring-related activities dropped from four to 10 hours in 2008, when the company had approximately 20,000 employees, to 1½ hours in 2013, when the company’s head count was twice as large.
Other hiring practices changed as well. In the early years, Google favored Ivy League graduates and requested SAT scores and college transcripts. The company dropped the practice after concluding academics didn’t predict job performance beyond a few years out of college. At the same time, the company moved to an internal recruiting team and more standardized screening process. It also rigorously prepped employee interviewers based on the performance of employees who did the best job of picking candidates who went on to become successful hires.
Bock stopped using job boards in 2012 after determining the low number of hires that came from them didn’t justify the expense. Everyone who interviews, including candidates who don’t make the cut, takes a post-interview survey to collect feedback that is used to refine the process. According to Bock in his book, the interview process works so well, “today even 80 percent of candidates who interviewed at Google and were rejected say they would recommend a friend apply.”
That might be because Google takes its hiring seriously. It spends twice as much of its people budget on hiring than the average company, according to Bock, guided by the philosophy that the better job Google does to begin with, the fewer resources will have to be spent rehabilitating underachievers or replacing people who don’t work out. “Making sure our people are developing is not a luxury,” Bock writes in “Work Rules!” “It’s essential for our survival.” Neither he nor a Google spokeswoman would disclose the size of company’s people operations budget or its staff.
Hiring isn’t the only area that Bock has refined. As Google has grown, Bock has taken advantage of its size to test new methods for training, managing and conducting performance reviews, sometimes trying innovations out on several hundred workers before expanding to larger segments or the entire employee population.
For all of its progress, women and minorities are underrepresented in Google’s workforce and in mid- and upper management. Women comprise 30 percent of the company’s workforce worldwide, and hold just 17 percent of the technical jobs. Of the company’s 36 executives and top-ranking managers, only three are women. At the board level, only three of 11 members are women.
Ethnic diversity is equally problematic. In the United States, Google’s workforce is 61 percent white, 33 percent Asian, 3 percent Hispanic and 2 percent black.
The company has taken steps to rectify that. People operations studies of women in technical and product management jobs showed they’re less likely to nominate themselves for promotions than men, but when they do, they’re promoted at slightly higher rates, Bock writes in “Work Rules!” The company found that circulating an email to technical employees explaining promotion statistics by gender and level was enough of a “nudge” to prompt women to promote themselves at the same rate as men.
More recently, Google has been conducting workshops to help create a more inclusive culture. By early February, more than half its workforce had gone through a unconscious bias program, Bock told Workforce. To encourage kids to look at STEM careers, Google supports historically black colleges and elementary schools, as well as Bay Area schools and groups serving largely low-income, immigrant populations.
“The reality is, it’s a decadelong problem to solve,” Bock said. It would be easy to improve ethnic diversity by hiring underrepresented minorities away from other tech companies, “but that would not be the best story for us,” he said. “There’s more to come on this in coming months. Stay tuned on that front.”
Authenticity — and a Pancake Recipe
Running the people side of a technology innovator isn’t always serious business. At least it’s not always serious for a guy with a collection of 8,000 to 10,000 comic books, the same guy who included a pancake recipe in a book on management.“Never having written a book before, I wanted to write one I’d enjoy reading,” he said.
His manager rating, however, was no laughing matter. Bock said he was terrified when he shared results of his manager rating with direct reports after the people operations organization created the much-written-about Project Oxygen program. As part of the program to build better managers, employees provide anonymous feedback about their bosses. His first go-round, Bock’s score was 77 percent favorable across 15 questions, which was near the bottom. He scored especially low for telling people how they were performing, prompting him to give his staff clearer feedback and travel more to meet with his extended team. Over time, those actions helped boost his scores and made the team happier and function better, according to his account in the book.
The Trouble With HR
Bock maintains he wouldn’t have been hired as a senior executive at a company with a traditionally run HR department because he lacked the required background.
“When I was at GE, I remember talking to another company, and they said you’ve only been in compensation for two years, you couldn’t be a generalist,” Bock told Workforce. “There’s myopia about the skill set people have to have. We’re supposed to be the experts; we should be better at letting people stretch and grow.”
It’s one of several criticisms Bock levels against the HR status quo in “Work Rules!” calling it the department “where you park the nice people who aren’t delivering elsewhere” and “not usually where the cool kids are.”
At Google, only a third of people operations staff have typical HR backgrounds. Another third come from generalist business consulting firms, and the rest are trained in analytics-related fields such as psychology physics.
It’s a classic Google move to build a team that’s bigger than the sum of its parts, one that can learn from data-based experiments, adapt to innovation and improve efficiencies without consuming additional resources.
As more companies redo talent management practices to add people analytics and other HR big data, Bock could continue to ride at the head of the pack.
“People have been managing people for tens of thousands of years. Doing it isn’t a new field,” Bock said. A lot of what Google has done is take what seems to work elsewhere, “and then we prove it and refine it.”
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