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Lessons from the enterprise of the future: embrace underutilisation, challenge, redundancy and failure

King's Business School and the Consumer and Organisational Digital Analytics (CODA) Research welcomed Mark Masterson, Global Technology Lead at Google, to explain the thinking that has helped Alphabet sustain its culture of innovation for 20 years. 

These are the elements of Google’s DNA that he believes traditional organisations need to inject in order to continue to evolve and thrive:

Don’t aim for 100 per cent utilisation

We’re all familiar with days when our in-boxes overwhelm us, and something that would normally takes us ten minutes, takes twenty.  Google’s founders say that this is Little’s Law, a concept familiar to software developers, acting on humans. 

Little proved a relationship between the average number of requests received by a system, their arrival rate, and the average time it takes the system to complete the request.  Applied to an organisation, Little’s Law suggests that anything over 80 per cent ‘optimisation’ of a person’s time is, in fact, less than optimal.

“Traditional thinking is that 100 per cent utilisation is efficient.  A company outsourcing its technology development will specify 100 per cent utilisation of staff,” says Mark, “but that’s mathematically unsound.  In that scenario, you can’t learn.  You are too blinkered to spot the future.”

Inside Google, everyone is encouraged to spend 20 per cent of their time on whatever they think will most benefit Google, and this has been a major driver of creativity.  “Around 60% of Alphabet’s outputs are the result of 20 per cent projects,” says Mark.

Treat everything as a hypothesis

Mark explained that traditional organisations frequently focus on doing what they already do, but better.  Google aims to maintain start-up culture at scale, and achieves this by encouraging staff to challenge everything.

“In a start-up, there is no ‘this is how we’ve always done it’.  Start-ups have to question everything.”

Like a start-up, which is driven primarily by the need to gain customers, the lens through which hypotheses are tested is the user.  “We say ‘start with the user, and all else will follow.’”

Redundancy is good

Successful market incumbents are optimised to maintain the status quo, says Mark.  They might pride themselves on being alpha predators that brook no inefficiency in their structure and offering.  

But, alpha predators can suffer when the circumstances around them change; “think of how polar bears are unable to adapt to melting icecaps.  Viruses on the other hand, are super-adaptable.  They are rife with redundancy, with multiple components capable of similar things.  That means that when the circumstances aren’t quite right for one component, another takes over.”

Its embrace of a degree of redundancy and multiple approaches to the same challenge is why Google nurtures products and teams that do similar things.

One striking example of this was the unleashing of Google Deep Mind’s AI technology and research team on the challenge of optimising energy use in the company’s data centres. 

“Google Brain, which is also in the AI space, had been working on this for years, but Deep Mind cracked the problem,” says Mark.  Deep Mind’s solution slashed Google’s data centre cooling bills by 40 per cent.

Reward failure

“If I had to choose a fourth thing that would help businesses capture the future, it would be failure,” says Mark.  At Google that goes beyond mere toleration: “if you fail, but are able to demonstrate learnings that the company can apply from your experiment, you’ll actually be financially rewarded.  It’s baked into our admittedly Byzantine appraisal process.”

Mark Masterson article

Google founder Larry Page explains why he is focussed on building an organisation that spots and captures the future.