Think Like Google20 Aug 2011
In Jeff Jarvis’ 2009 book, “What Would Google Do?”, he presents the case that companies like Google are not merely creating a new way to use the Internet, but instead are revolutionizing how businesses think and work rocking many industries to their very core. My wife and I walked into Picture People in order to take some photos of my wife’s family; we had a great time during the photo shoot. The camera lady was very energetic and though she earned only minimum wage, they had taken the time to train her and teach her how to do her job well. Then came time for us to select the pictures, we fell in love with all of them. When we looked over the prices, I realized we could not buy a single picture for less than twenty dollars.
I explained to the young camerawoman that she did not have to print out the half dozen large photos and place them in frames, for we would be buying only a few. Then she told me the craziest thing; she said that her company policy was to print everything out even if I was not planning to buy it. The young lady would be fired if she did not print and setup the frames, each costing around $200. I even thought if the image is that expensive to buy, then why is it so cheap for Picture People to print it and then throw it away if I do not buy it. This simple policy of waste and sales is the nature of our current corporate culture, one that corporations believe is the best strategy to trick or convince their customers into buying their products and services. Google differs from most other corporations in that it does not adopt this business model.
Inefficiency and mass thinking is like a cancer that is eating its way through modern businesses; many small companies as well as Fortune 500 enterprises operate no differently than the big government bureaucracies which they so adamantly rally against. Businesses do and can still make money the old way, but if they are to survive in the next ten, fifteen or twenty years, they must adapt to a different way of thinking. If they do not do so, companies run the risk of having their businesses cannibalized from the ground up by smarter, faster and more open competitors. Google’s way of doing business has changed the rules and allowed new and old corporations to cannibalize themselves and revolutionize their way of thinking for the better.
The first of many issues plaguing corporate culture is Customer Service. The relationship between customer and company has changed for the worst over the last few decades and we seem to think of it as progress. Small business imitate large corporations in everything they do including how they handle customer service because they believe that it will bring them similar levels of success. Whether small or large, companies cannot afford to put a customer on hold for long periods of time no matter how much they continue to tell them that “your call is important to us!” As the internet has shown, people are looking to interact with these companies, to tell them what they want from those companies; the question is are they ready to listen to their customers? Give the customer control of your product or service, and they will use it for the better to help you create value in your company. If one listens to the users and cherishes their ideas, even the bad ones one will succeed.
The advantages to giving control is that the worst customer can become a best friend. Dell Computers ran into some problems a while back when they where first known as having the best customer service in the industry. Yet when random blogs began to pop up chanting the atrocities of Dell’s Customer service department the company ignored it, thinking like many do in old media circles that if peope do not give it credence it will just go away. Yet the internet has freed the customer to speak out against a large organization and for everyone to have a shared discussion of any company together online. The more the company ignored it, the worse the problem became, until finally, when users did a search for Dell on Google, a popular site called “Dell Sucks” became number two on the search results. With the advent of social networking sites like Twitter and Facebook, companies are scrambling to learn how to use them to the most advantage. Dell immediately told their customer service staff to look on every page and every blog for problems and ordered them to start answering customer concerns. Many companies would claim that they do not have the man power to do such searches and answer every customer problem online. However if they tried, they would recognize that it is possible to do so. Dell’s customers were already having a conversation about them; it was up to Dell if they wanted to join that conversation.
The second advantage is that the best customer is now the best partner. The best example of this is Google’s Gmail service; they could have launched it out like so many other Email providers like Yahoo or Hotmail, but they kept it in Beta (testing version) for nearly five years before they even offered it as a product. They handed control of the service over to their users for free and got so much feedback that it is now one of the most powerful webmail clients used by enterprises world wide. The critics would say that it is great if one is offering a free product to people, but what does one do when people have to charge their customers. Salesforce.com charges their business customers for access to a platform they built and they themselves use. Their business is Customer Resource Management and they do it well, if there is something that their customers need, they immediately implement it and offer that feature to all their other customers without a problem. They do this by creating an internal network for their customers to communicate with each other and ultimately do business amongst themselves.
In the previous case we saw with Picture People, I was a loyal customer, I loved their product and their service, but when I told them not to print all those photos, they did not listen to me because they felt they knew better. Picture People’s business belief is that if they force their employees to do it, the customer will fall in love with it and want to take it regardless of the price. Not to say that some do not but it is a waste and probably not very profitable. Plus the picture I take there is Copyrighted so that means I cannot make my own copies of a picture of myself. Why cannot I take this picture and post it on Facebook or Twitter? What makes them think that I am going to come back to them for reprints if it costs me a fortune to do so and what gives them the gall to make me feel like a criminal for doing it myself. If Picture people made the customer a partner and allowed them to post their pictures for the world to see, it may gain more customers. My love for their product should be their greatest asset, not their chance to nickel and dime me for every cent. In a world with so much choice, customers will no longer be content with a business’ half hearted attempts at customer service; one must go above and beyond for their business.
The second solution is that business needs to look at is the way it views the new economy. Small is the new big. Large corporations with hundreds of employees is too costly when one factors in Union Worker Costs and employment benefits. A company must manage abundance and not scarcity. When Adams wrote the book Wealth of Nations he explained that scarcity raises prices and thus is what they need as a business man to look for. Airplanes have a limited number of seats so they can charge more for those seats, Theaters have a limit of people that they can have in one movie so they charge more based on the number of people who want to see a film. In a world where a start up company can compete with a Fortune 500 in a level playing field, it pays for a company to stay small both for their clients and their share holders. Businesses need to think distributed in that they must share and network with others and not hoard for themselves. Instead of wanting the customer to come to the business, go to the customer. The news paper should look for its local bloggers, invite them to write on their print paper. Websites in exchange would promote the newspaper’s own website and content. Many newsmen will say that this cannot be done, that their profit margins will be too low to support the paper, the solution is to gut the paper. It is better that they canabalize their own business and not allow a competitor to do so. They should not see Bloggers as a threat but instead view them as a valid cheap resource for news stories that senior news men can view and edit if necessary. The news papers can also turn over their ad services to Google allowing it to do find their advertisers for them so that they can focus on what they do best, find the news. The more a business focuses on its area of expertise, the more Google will search them on that content and make them the experts on the subject.
The first advantage of new economy is the ability to rid corporations of the inefficiencies in business and focus only on what will make the business profit. In the case of Picture People, their inability to be efficient will probably be their downfall, a better and cheaper photo place will do a better job and take them down much like they took down Olen Mills. Google’s view is that one needs to manage abundance of information and not control scarcity of what the customer does not know, instead of linking to select websites with guarded information, Google search is built to get better as they get more sites on the internet in order to be able to search them and give their user a more concise answer to the question. Nothing that is done at Google can be done without data, there are no hunches at the board room. No single executives pics the product because they think it is a good idea. If an employee has an idea, they must come to the boss with hard data to back up that idea. If they want to make a change to a site, they run tests of different designs and see which customers found easier to navigate. If they want to create a new product they do Beta runs for customers to give them feedback that then they can present to the CEO. If one cannot come to the boardroom without the data to back up everything they want to do then they do not get to present it. If one does then the board votes on what they feel based on the data shows the most promise. Many will say that this is an absurd way to do business, that employees should be doing their jobs and not collecting random amounts of meaningless data on something as random as a website change, yet Google has proven itself a leader in innovation at every turn because of this method. They manage their abundance by allowing their customers and users to get more and more data back to them so that they can then create a better product.
The second advantages businesses must remember is that we now live in the gift economy, free as a business model. Everyone of Google’s products is free in some way shape or form, they make their money off of advertisements that are geared towards the niche needs of their users. So the better Google gets at offering ads to niche markets, the more money Google gets from it is advertisers. Walmart has destroyed man small businesses who sold the same product as they did and at a much more expensive price, they sell mainly to mass market needs and can control their prices in order to wipe out the competition. Any company wishing to compete against the Walmart’s of the future must think Niche, they must offer products that one cannot find at the mega stores thus creating a niche economy that they lead and own. The mass market is dead, the economy of niches is the new paradigm. A boot maker in Texas uses Google to sell his $5000 boots online, he only sells to a select set of customers that find him based on his niche market and with the help of Google sells hundreds of these per month. This niche product will not be found on Walmart shelves any time soon, but ask the boot maker if he is complaining? Remember Picture People, their absurd prices for their photos prompted me to realize that if they changed their business model they could increase their customers and grow their value. Instead of Copy-writing the photos they take, offer them for free online. Charge a hosting fee after the pictures have been taken that allows their customers to go online and pull the pictures from. They know their customers will want to go to Walmart or other Photo sites to print their pictures so offer them that as a service. Give them the ability to purchase through Walmart and make a few cents on the dollar in the long run. Allow the customer to post the pictures on their Facebook or Flickr accounts so that they can share it with everyone and thus promoting the business more. Do not hold the customers to one’s standards but instead allow them to create their own and make money in the process.
Most businesses would look at this and think it is absurd, “I sell a product” the say “not a service or a website,” Yet one does not always to see free as something business offers their customers but it can also be a means to learn from them as well as their employees. Google offers a 20% free project for their workers, this means that during an 8 hour day, employees are allowed one and a half hours to work on their dream project or innovation. Google benefits from this time because almost all of the projects invented during this 20% become full time Google products later on. Everything from Google Maps to Gmail was once someone’s 20% and is the lifeline of Google’s innovation. This also creates employee love for their work and most will spend their free unpaid time working on the project in an attempt to get it out there. Google gets this kind of work almost for free because it gives rather than takes from their employees and customers the ability to work on their dream projects. This is the new Google economy that every business must understand, the ability for businesses to stop marketing to the mass and create products that will still be found and sold in a large way but can be geared at a certain audience with specific tastes and loves.
Ultimately there are many more things that one can do to make their business more like Google, but the key is openness and throwing off the previous notions of success in mass in exchange for customer loyalty and brand honesty. If a business gives their customers control of the product, they will make it their own and love it, the final decision is still in the company’s hand but they can ensure success by welcoming the customer into the conversation more. Businesses need to remember that their customer does not have to come to them to have a controlled discussion of their products or services, the business must go to the customer by listening to their feedback and going where they are. The customers are already having a conversation about the product, the business just needs to find out where that discussion is going on and join in on that network. They also need to create a platform for the customer to work with and build on, this creates customer loyalty and brand respect. Finally a business must join the new economy by not over charing their customers for what only they can provide but instead offering them a free or low cost solution where the customer can do what they want and the business can manage the abundance from it. Using free as a business model is important whether one is implementing a free time for their employees to innovate or are offering a free service to the customer in exchange for data, customers and employees can go somewhere else for what one has to offer them, give them a good enough reason to stay. Google’s way of doing business has and will revolutionize every industry on the planet. With the ability to instantly gather and sort information steadily growing and getting better, we will soon not be able to run our businesses without these principles managing everything we do.