When entered into Google’s search bar, the name ‘Eric Schmidt’ comes out with approximately 83 million 100 thousand results. After taking few seconds to estimate where to start, the next thing you think about is that this guy has actually been there to make Google what it is now. The best part is that it worked out just fine for regular internet users all over the world as well as for Schmidt’s net worth of $10.7 billion in 2016 (Forbes). Starting from 2001 when Eric Schmidt was appointed for a position of Google’s CEO, the evaluation of company’s performance clearly shows that the decisions taken and the actions made by Schmidt prove him being a great leader with well developed managerial skills. Due to the conducted personal analysis I would consider Eric Schmidt to be an effective leader because of his ability to offer Google the following: obtaining necessary knowledge and experience, establishing personal approach, promoting innovation, and thinking big.
Obtaining necessary knowledge and experience
First of all Schmidt has been raised in a well educated family, where his mother Eleanor had a Masters’ degree in psychology, and his father Wilson was a professor of international economics. We can now assume that being raised within the cult of knowledge had initially developed in him the necessity for learning. He first has entered Princeton University to become an architect, however, felt for electrical engineering and switched the programs. Later Schmidt enrolled at the University of California, where he got an M.S. degree and, moreover, applied gained knowledge on practice when “designed and implemented a network linking the campus computer center with the CS EECS departments” (The Famous People, 2015). Farther he completed a PhD degree in the same university, demonstrating his interest in “challenges of managing distributed software development” (The Famous People, 2015) when choosing this topic for his dissertation. When developing Lex program he managed to transform it into a tool of complier construction. Not only Eric Schmidt obtained the field knowledge, before coming to Google he had also received an important managing experience in Sun Microsystems and Novell. In addition, Eric was constantly improving his mentoring skills as a professor at Stanford Business School.
Establishment of personal approach
During his working experience with Google, Schmidt clearly understood the necessity of giving others an opportunity to make the decisions. Empowerment of others allowed avoiding unnecessary conflicts within the upper management, while it inspired and motivated the rest of the employees.
Eric was able to estimate the strong sides of Larry Page and Sergey Brin, thus, diversified the responsibilities in order to increase company’s benefit: Schmidt focused on management of company’s vise presidents and its sales organization, Page was responsible for engineering issues and product management, and Brin concentrated on engineering and business deals (Schmidt, E., Rosenberg. J., 2014). Moreover, Schmidt was able to establish and successfully perform an effective decision-making process for the situations where disagreement took place: “identify the issue, have the argument (alone), and set a deadline” (Schmidt, E., Rosenberg. J., 2014); thus, he provided his colleagues with an opportunity to avoid conflict and come up with a completely new, more beneficial solution.
While dealing with employees, Schmidt distinguished their desire for recognition, thus, he used to conduct his own list of best employees “as identified by multiple levels of peer-references, and interact with them personally to encourage them to implement their innovative ideas and to insulate them from unwanted interferences by others” (Manimala, M., Wasdani, K.).
Promoting innovation
Schmidt committed to constant and productive innovation by hiring A class professionals, offering his employees a comfortable working environment, establishing strategic partnership with competitors like Apple, and buying out innovative start ups. First of all, Schmidt applied a 70/20/10 time management allocation model, where 70% of employees’ time was spent on core business issues, 20% of time was targeting the issues related to the core business, and 10% was officially spent on projects unrelated to the core business (Adrade). Eric Schmidt once said: “let’s face it – programmers want to program, they don’t want to do their laundry. We make it easy for them to do both” (Bornrich). He provided his employees with everything necessary for them to feel comfortable to create, which looked like informal company culture, a small paradise with free food, convenient and fun equipment like bicycles to drive around the facility’s territory, gyms, parks, no outfit rules, generous rewards and awards etc. Furthermore, a special HR program to estimate those employees, who might leave the company, and keep them, was developed. Another important strategic decision was to avoid traditional models of business culture in terms of divisional structure: with their absence an informational flow ran faster and promoted collaboration between the project groups.
Thinking big
A former Google’s CEO had always been thinking of being global. He considered the variety of international issues and the necessity to avoid legal pitfalls for a global company, thus, a small “army of layers” with differentiated experience was employed. Eric Schmidt was also ready to sacrifice his personal time in order to keep the company running: “Because business has gone global, a business leader must be willing to act 24 hours a day. There is no way a CEO can afford time off” (Adrade., M.). Another positive factor was that Eric accepted the hard truth, that the market was changing, and that it would only keep doing so faster due to the network effect on the society. He was always customer oriented, recognizing that the new generation would develop their social norms, and he tried to listen to their needs and thought. Moreover, a clear understanding of customers’ product value was developed and Google was offering digital goods free of charge: “since prices tend to decline in mature business until they are equal to the marginal costs of creating the goods, digital goods will have to be available for free” (Adrade., M.). At last, Schmidt was able to evaluate the effect of self confidence. In 2004 when Google had been watched before an IPO, all tree top executives asked their salaries to be cut to $1 annually to show the world the estimated company’s future strong performance. Taking such a risk had resulted into positive attitude towards Google and attracted the needed investors to shares’ purchases.
As it is known, Google had achieved $1 billion in revenue in 6 years after its foundation, while Microsoft did the same in 16 years. Undoubtedly, Eric Schmidt became one of the most significant leverages, who helped the company to be standing where it is now. That is exactly the story of success, where he earned the title of few, who became billionaires based on stock options received as a loyal employee (Bornrich).
References
(2014). Eric Schmidt Net Worth. Bornrich. Retrieved from:
http://www.bornrich.com/eric-schmidt.html
(2015). Eric Schmidt Biography. The Famous People. Retrieved from:
http://www.thefamouspeople.com/profiles/eric-schmidt-6451.php
Adrade., M. (2010). Eric E. Schmidt: Legendary Business Leader. Martin Adrade. Retrieved from:
https://martinandrade.wordpress.com/projects/eric-e-schmidt-legendary-business-leader/
Schmidt, E., Rosenberg. J. (September 23rd, 2014). Google's Eric Schmidt Explains How He Learned To Work With Larry Page And Sergey Brin. Business Insider. Retrieved from:
http://www.businessinsider.com/google-eric-schmidt-book-ceo-decisions-2014-9
Manimala, M., Wasdani, K. (June, 2013). Distributed Leadership at Google: Lessons from the Billion-Dollar Brand. Ivey Business Journal. Retrieved from:
http://iveybusinessjournal.com/publication/distributed-leadership-at-google-lessons-from-the-billion-dollar-brand/
(2016). Eric Schmidt. Forbes. Retrieved from:
http://www.forbes.com/profile/eric-schmidt/
