The McKinsey Quarterly

  • Recommend (132)
  • Text Size
  • Print
  • Download PDF
  • Link to This

Eric Schmidt on business culture, technology, and social issues

Google’s executive chairman shares his strategies on hiring, running meetings, designing “mobile first” business models, and addressing joblessness and education reform.

When Eric Schmidt handed the reins of CEO at Google back over to cofounder Larry Page recently to take on the role of the company’s executive chairman, with a more external focus, news reports predictably recounted his oft-made joke that his role at Google had been to provide “adult supervision” for the company’s cofounders, Page and Sergey Brin. Indeed, no one could argue that in Schmidt’s ten years at the helm, Google had grown up into an extraordinary force in global business. Schmidt’s track record atop the leader in Internet searches stands as remarkable story of steady growth, expanded reach and influence, and an innovative management style that will remain scrutinized as Schmidt, 56, takes on new duties.

Google now produces close to $30 billion in annual revenues, and its domain is growing well beyond search. The company’s YouTube unit, with some 40 percent of the market for Web videos, is generating profits for the first time, and its Android operating system hums at the center of more smartphones than Apple’s iPhone.

Yet the organization that Schmidt was instrumental in building still depends on hiring and retaining the brightest talent, as well as encouraging deep collaboration and granting substantial creative free space to its teams. In this talk at a McKinsey conference in Washington, DC, in mid-March, Schmidt spoke with McKinsey director James Manyika and described Google’s approach to talent management, the mobile and data technology trends he sees shaping the coming years, and his views on public-policy issues such as joblessness and education.

Launch the interactive, or download the audio file.


Eric Schmidt on business culture, technology, and social issues
Google’s executive chairman discusses his strategies on hiring, meetings, mobile business, and jobs and education.
Recommend (132)
  • 14 MAY 2011
    Ram Chandra
    Masters Student
    University of Western Sydney
    Sydney, Australia

    ...I do not agree with the idea that “biology in the future will be statistical.”...

    .
    Ram Chandra
    Masters Student
    University of Western Sydney
    Sydney, Australia

    A short but nice sharing session. But I do not agree with the idea that “biology in the future will be statistical.” As of now, only 5 percent of all biological problems have been solved and we cannot solve the remaining 95 percent using statistics; we need discoveries and innovation, a blend of physics, math, and chemistry.

    .
  • 6 MAY 2011
    Nagesh Ramamurthy
    Sr. Director, Help Desk Services
    Cegedim
    Bangalore, Karnataka, India

    ...“The education system is currently run for the benefit of the adults and not the children.” This is a profound statement, and the suggestion that this should change so benefits depend on outcomes is a welcome one....

    .
    Nagesh Ramamurthy
    Sr. Director, Help Desk Services
    Cegedim
    Bangalore, Karnataka, India

    Schmidt says, “The education system is currently run for the benefit of the adults and not the children.” This is a profound statement, and the suggestion that this should change so benefits depend on outcomes is a welcome one.

    Schmidt’s comments on the number of interviews required to make a good hire is also something HR and recruitment folks should take note of.

    It is fascinating to hear this man talk!

    .
  • 4 MAY 2011
    Reem Saied
    Head - Strategy
    Ad Magnet
    Mumbai, India

    ...Most “proven” employment, economic, social security, or welfare models seem to break down when they are applied to higher-population or agrarian countries.

    .
    Reem Saied
    Head - Strategy
    Ad Magnet
    Mumbai, India

    Agree with Eric’s views, especially on hiring, technology, and education. But I somewhat disagree with Eric’s suggestion that the high-wage German manufacturing and export-based employment model is a better one for countries to experiment with. Most “proven” employment, economic, social security, or welfare models seem to break down when they are applied to higher-population or agrarian countries.

    .
  • 3 MAY 2011
    Greg Flakus
    President
    GF Strategies
    Vancouver, WA USA

    Very timely. His comments on how most of the developers are now focusing on mobile apps first is the future.

    .
    Greg Flakus
    President
    GF Strategies
    Vancouver, WA USA

    Very timely. His comments on how most of the developers are now focusing on mobile apps first is the future.

    .
  • 3 MAY 2011
    Gavin McLeod
    Owner
    Siezmic
    Auckland, New Zealand

    ...Surely the real breakthrough...will be when voice is empowered to the point where our most powerful natural communication tool is the only interface we require to instruct and represent our needs and wishes to services provided via the Web...

    .
    Gavin McLeod
    Owner
    Siezmic
    Auckland, New Zealand

    Interesting stance on some big topics.

    With regard to employment, the emphasis seems constantly to be on youth unemployment, whereas the data in most OECD nations appears to point to a looming crisis in middle-age and senior employment and engagement. This shift is being driven by an aging demographic bulge but also by the velocity and depth of technology change.

    The older workers are in danger of being left behind, and importantly for society, their knowledge and experience is not being translated and transported through to the younger generation, resulting in ineffective knowledge transfer but also in a widening of social alienation across age groups. The oldies go off to gated villages with golf courses while youth workers are left to repeat all their mistakes that could have been avoided if there had just been an effective interaction network with seniors.

    Mobile and cloud computing are huge developments, as Eric outlines. I just wonder about the form factor of handheld mobile devices—particularly mobile phones and PDAs as opposed to tablets—in terms of their ability to truly support and enable deep Web interaction. I watch people struggling to use the inadequately sized screens to accomplish tasks that are easy on a laptop or home PC. This problem will only grow as bandwidth improvement encourages mobile Web access.

    Surely the real breakthrough, and Eric touches briefly on it, will be when voice is empowered to the point where our most powerful natural communication tool is the only interface we require to instruct and represent our needs and wishes to services provided via the Web. I should be able to freeze conversations, recall conversations, rewind and analyze for future use the content of my conversations. I should be able to instruct and obtain services, and provide identification to and from the Internet by simply talking to the Web...no need for texting and typing anymore.

    Perhaps Google will morph to become the global telephony provider, and in the process they will redefine what “voice telephony capability” is able to do. Certainly it will be far more than simply providing a telephone-line network for transporting voice and data. A real telephony service provider will be a provider of powerful applications delivered over the network to do so much that many people cannot yet envisage, let alone appreciate. That will be the real breakthrough.

    .
  • 2 MAY 2011
    Peter Malpass
    Executive Staff
    FAA
    Washington, DC USA

    I especially liked the joblessness and reforming education vignettes. Eric is right: we’re a dying culture if we don’t fix those.

    .
    Peter Malpass
    Executive Staff
    FAA
    Washington, DC USA

    As an educator (I used control charts as feedback on teaching) and the father of two sons who just out into the workforce, I especially liked the joblessness and reforming education vignettes. Eric is right: we’re a dying culture if we don’t fix those. The dig at academia—if all discord, it's a university—is also well taken. You need discord plus deadline. I’ll go check Sal Khan as result. Thank you for presenting this!

    .
  • 2 MAY 2011
    Jaiganesh Ravindra Babu
    Account Manager
    OKS Group Pvt Ltd
    Chennai, India

    He knows what he is talking about and his ideas are breathtakingly simple.

    .
    Jaiganesh Ravindra Babu
    Account Manager
    OKS Group Pvt Ltd
    Chennai, India

    He knows what he is talking about and his ideas are breathtakingly simple.

    .
  • 2 MAY 2011
    Vasant Ramaswamy
    President
    Scriplogix
    New York, NY USA

    ...Moving biology from under microscopic examinations of tumor cells to quantitative modeling of the tumor genome, for example, is a feat that is being made possible by real-time processing of big data....

    .
    Vasant Ramaswamy
    President
    Scriplogix
    New York, NY USA

    Very compelling insights! I particularly liked Schmidt’s comments on mobile first and big data, both of which have dramatic implications for healthcare–the field that I work in.

    It is the combination of these two big trends that promises to transform life sciences and healthcare to such an extent that Google or a similar company can potentially be the largest life sciences company in a few years from now. Moving biology from under microscopic examinations of tumor cells to quantitative modeling of the tumor genome, for example, is a feat that is being made possible by real-time processing of big data. We ran models recently that show that if you are single, earning less than $100,000 a year, and drive an SUV—along with a few other parameters that we were able to get entirely from the public domain—the probability that you are diabetic is north of 76 percent. The approach that Google mastered (correlation is not causality) was the one we employed to get there. Interestingly, none of this data transgressed Privacy of Health Information norms since we did not use health data at all in the model. Harvard’s Nicholas Christakis recently showed obesity can cluster, with the implication that social contagion can cause obesity to be transmitted using sociometric analysis and mathematical techniques. The same techniques can now predict drug abuse, depression, and risky sexual behavior in the case of HIV and AIDS, in a sort of metaphoric extension of “tell me who your friends are, and I will tell you who you are.”

    Meanwhile, advances in evolutionary cognitive neurosciences are beginning to show that there is much more to genomics than what we currently understand. The human genome may be but a tiny part of the biome that includes small celled micro-organisms, which are an integral part of what we call “human” and, together, suggest the hologenome (another exponential expansion of data) that we are beginning to unravel.

    Schmidt says that most of today’s youth will be working in healthcare. That is a prophetic insight that resonates strongly with me for all these reasons.

    .
  • 2 MAY 2011
    Lloyd Ormon
    Engineering Manager
    Newport News Shipbuiilding
    Newport News, VA USA

    ...Is it possible that are setting ourselves up to go through the same “mainframe to PC” cycle all over again?

    .
    Lloyd Ormon
    Engineering Manager
    Newport News Shipbuiilding
    Newport News, VA USA

    Mr. Schmidt really got my attention with his take on “mobile first” and the demise of the content/distribution structure as we currently know it. It is rather interesting that in a sense, it feels like we are making a full circle back to “mainframes” with cloud computing, except we are combining this with these super powerful mobile devices. Is it possible that are setting ourselves up to go through the same “mainframe to PC” cycle all over again?

    .
  • 2 MAY 2011
    Yatin Ubhaykar
    Quality Manager
    Wipro Ltd
    Pune, Maharashtra, India

    ...why not go ahead and analyze the data, and provide companies with the intelligence so they can act to compete in business and be more customer-centric.

    .
    Yatin Ubhaykar
    Quality Manager
    Wipro Ltd
    Pune, Maharashtra, India

    Talking about strategies, one thing that's on my mind—or for that matter, on everyone’s mind—is social media analytics. Looks like while Google has all the tools, systems, and software that can churn out statistical numbers for your client, what Google needs to do is go one step beyond this and provide actionable intelligence to companies. So instead of providing data to your client, why not go ahead and analyze the data, and provide companies with the intelligence so they can act to compete in business and be more customer-centric.

    .
Submit Your Comments

The user information you enter into this form will not update your site profile. To update your profile, please visit your profile page.

Subject Eric Schmidt on business culture, technology, and social issues

*Required

We may publish your comments online and in the print edition of McKinsey Quarterly. Those chosen, which may be edited for length and clarity, will appear along with your name and details, but not your e-mail address. We will use your e-mail address only to send you a confirmation copy of your comments and to notify you if we publish them online.

We value your feedback and will consider it carefully. Nonetheless, we receive so many comments that we cannot acknowledge all of them.

See also:
Preview

Embed E-mail