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US Headlines Special 3: The Outcome
Headlines – 24/10/2016 - US Headlines Special
Headlines - 10/10/2016
11 October 2015 |
There's a reason Google has grown from a small Ph.D. research project into perhaps the world's best-known tech company. Actually, scrap that - there are a thousand reasons. But there is one common factor that has overarched the rise of Google, and, indeed, underpins its very existence as a colossus of the internet age: openness to change.
Change is, of course, imperative to any business that entertains hopes of surviving beyond its first birthday. But for a company in an industry that didn't even exist 20 years ago, its importance cannot be understated. For all its shortcomings, Google has succeeded in becoming synonymous with change. It's this allure - of innovation, of envelope-pushing and of the chance to be a part of something that might be truly groundbreaking - that has propelled Google to the top of LinkedIn's 'Most Desirable Employer' rankings for the last few years.
In line with this reputation, summer 2015 has seen significant upheaval at Google HQ. Back in August a reorganisation was announced, bringing Google and its various affiliates under the umbrella of a new holding company, Alphabet Inc. A month later, Google unveiled a new wordmark, its first significant rebranding for 16 years. So, why a new structure? Why a new logo? And, more importantly, why now?
Larry Page and Sergey Brin's decision to restructure has seen Google and its constituent services (Search, Maps, YouTube and so forth) become just one subsidiary of a larger entity. Lining up alongside Google as a branch of Alphabet Inc. are affiliated businesses such as Google X (the semi-secret facility currently developing the self-driving car); Venture (the organisation's corporate investment fund); and Calico (the research and development firm that is fighting age-related diseases).
The main driving forces behind Alphabet's conception can be split into three categories.
Under the old structure, there were perceived glass ceilings which would often lead to Google's most prized employees looking elsewhere to advance their careers. The new system allows Page and Brin to hold onto their most valuable human resources by opening up CEO positions within each of Alphabet's constituent businesses; positions that top performers can now aim for. More broadly, the Alphabet structure creates space within each organisation for more vertical movement of employees, something which ought to boost workforce morale and incentivise excellence. Case in point: Sundar Pichai. Now Google's new boss, Pichai, had previously been rumoured to be in the frame for pretty much every single blue-chip CEO vacancy in Silicon Valley over the last 12 months. Some have gone as far as to speculate that the entire Alphabet restructuring was motivated by Page and Brin's desire to hold onto him.
Though the legal framework for the reorganisation is likely to have been highly intricate, the outcome is a structure that has a neatness and clarity to it - something that many feel Google has lacked in recent years. The new structure should enable Pichai to oversee the 'bread and butter' income streams of Google and its subsidiaries (which make up 90% of Alphabet's total revenues), while Page and Brin can focus on their more ambitious 'moonshot' projects. Such a framework also lends itself better to accountability and transparency - CEOs who fail have fewer people they can blame, while those who achieve success get the recognition they deserve.
It has been argued that the division of Alphabet's various constituent businesses should also help to prevent the sluggishness and general diseconomies of scale that can often befall large corporations. Though business expansion is usually seen as desirable, many companies reach a point where the sheer size of its workforce actually begins to hinder productivity. This can be for reasons ranging from communication difficulties to a lack of clear direction or excessive bureaucracy. Sure enough, Larry Page alluded to this in his Alphabet announcement, commenting that the move should make Google even better through "greater focus ".
The new structure is likely to have been designed with global regulators in mind, as the decision to organise the businesses this way enables them to be presented to the authorities as individual, separate entities. This is a shrewd move, given the current onslaught of regulators filing charges against the tech giant, especially in the EU. It's also probably fair to assume that the Alphabet structure has been arranged in a way that promotes tax efficiency.
Around a month after the announcement of Alphabet Inc., Google revealed it would also be implementing a new logo. The now-iconic curly 'G' that had been used by the company for 11 years was replaced with a slightly chunkier, straight-lined typeface. The redesign was met with general approval from graphic designers who, among other things, cited Google's success in modernising their brand whilst retaining its key features (the primary colours, the rotated lowercase 'e'). But beyond the initial novelty of the switch, this is unlikely to have been of much interest to most casual observers. After all, companies update their logos all the time, right?
Well, not exactly. There's more to it than meets the eye, especially when considered in light of the restructuring. Marketing expert Nader Ashway has written an intriguing blog-post examining how Google's new wordmark can essentially be boiled down to an exercise in outbound marketing. In other words, it's Google's way of reminding the world that they're still moving, still creating, still evolving. As noted by a program manager at the company, the new logo broadcasts loud and clear the idea that Google is "a place that allows folks to challenge even the most iconic parts of the company. "
For all its supposed spontaneity and kookiness, everything that Google does is deliberate and calculated. It isn't a coincidence that the Alphabet restructuring and the brand redesign happened within four weeks of each other and it isn't by chance that they decided to do so at that particular moment.
The modifications are, together, a two-pronged response to a changing tech industry which is demanding greater transparency and more varied ways of delivering products. The reorganisation should help them to navigate these challenges, and the rebrand is a way of letting the world know. It's an excuse to have new conversations with old clients, and to reassure them that they aren't going to be the next in a long line of tech giants (see Nokia, Sony) to put their feet up and have it all come crashing down.
Silicon Valley legend and former Intel CEO Andy Grove once said that success breeds complacency, and complacency breeds failure. If there's one thing we can take from Google's summer activity, it's that it won't be resting on its laurels any time soon.