Change Agents, Google and Time
May 15, 2006
There are few days when any of us fail to interact with Google. As a tool set, it has changed the way we consume information. Its founders have been widely acclaimed, featured in every publication imaginable, and at Google’s annual shareholders meeting last week, praise was heaped on yet again. And why not? Given the company’s performance since inception and the wealth they have created for investors, how could anyone be dissatisfied?
At the same time, Google’s tremendous performance thus far begs the question, Can it last? Given its young age, and the fact that they have never survived significant economic downturn, how can we know if the change agent of Google can be consistent over time?
Google is not resting on past success, nor are they promising blue skies forever in terms of their performance. Here are some thoughts from an article in the Boston Globe:
Google CEO Eric Schmidt assured shareholders that Google is working diligently to develop even more products to build upon the company’s success story, which included a $592 million profit on revenue of $2.25 billion during the first three months of this year.
"We have lots more stuff coming," Schmidt said. "The rate of innovation and impact of Google is just beginning."
Toward the end of the meeting, Schmidt reminded investors that Google eventually won’t be able to deliver the high level of the earnings growth that enabled the stock to more quadruple from its August 2004 initial public offering price of $85. Google’s earnings have increased by at least 60 percent in every quarter since the IPO.
"It’s safe to say, over time, that our growth rates will slow," Schmidt said. "It’s the law of diminishing returns. It’s real difficult to know when this will occur."
In meetings and conversations I have had with change agents in the federal government, a key point of discussion is how a change agent can create lasting impact. One theory has emerged, that changes to processes and parts of cultures within an agency will last for perhaps 5-7 years. If this is the case, is massive agency transformation, for a 5-7 year timeline of "steady state operations" worth the investment?
Last week we met with the OMB's Chief Architect Dick Burke, and a topic we hit on was how the founding fathers of the United States established a model of routine government turnover: Two- year House, four-year Presidency, and six-year Senate terms. (We will be posting our Podcast with him shortly.) In many ways, this forced turnover plays against the change agent who thinks that time is on their side.
If there is anything the change agent paper and this entire project has taught me, it is that change must be done with speed, what John Kotter calls urgency. In 5-7 years, will the changes Google put in place for the world still be relevant? Will they innovate away from the core business of search that we all love? Will they be consistent over a sustained time frame? In the end, time will tell.
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