Eric Schmidt , chairman of Google is known for his leadership qualities and the way he makes the work place a hub of new ideas and innovation, which is the major reason behind the steady growth of Google.

Before joining Google, Schmidt had been a successful chief technology officer at Sun in its glory days. But he had performed poorly in his one stint as a CEO at Novell . Still, venture capitalist and Google board member John Doerr had a hunch that Schmidt’s patient engineering management style was exactly what was needed at Google. Schmidt faces a lot of scepticism for his working style from Page and Brin but that is history. Google reached $1 billion in revenue in six years, 10 years faster than Microsoft .It did $22.6 billion in its most recent fiscal year. The mild-mannered Schmidt grew to be a CEO one of his kind.

Eric believes that everyone including him is extremely dispensable, because ultimately Google is bigger than the individuals who make it.

One of the leadership quality held by him is that he doesn’t follow any managerial structure where the decision power is only in the hands of the highest authorities, or the information flows from top to bottom where in the employees only have to follow. It is a different model than the traditional, hierarchical model. There’s the CEO statement and the strategy that needs to be followed and describe the work that has to be done by the employees. People do exactly what they want to do every day. They are much easier to manage because they never have problems. They are always excited and are working on anything they care about.

Google is the best example of network-based organization. Very flat, very non-hierarchical, very much informal in culture and ideas. Schmidt also believes that as being a CEO of a company like Google it is very important to have an environment where people are constantly throwing their best ideas as opposed to being afraid to talk to their leaders.

The working strategy of Google is based on independent thinking, especially in matters of empowering their employee and encouraging them to come up with innovative ideas and implement them. Schmidt came from corporate background; his leadership style had many things in common with the culture already generated. His leadership style revolved around knowing his employees better and creating new ways to reward and promote his high-performing employees. He believes that one should let their employee own the problems which you want them to solve and allow them to function outside the company hierarchy.

His leadership style includes the following:

1) He makes a list of his best employees based on multiple levels of peer-reference, and interact with them personally to encourage them to implement their innovative ideas and to insulate them from unwanted interference by others.

2) The high performers are rewarded according to the systems already imbibed for a long time. In addition to that he created a five-hour long video called the Factory Tour, where the protagonists themselves would explain the idea and it’s working.

3)  In order to make the employees the owners of their work, Schmidt used to provide a very broad definition of the company goal and leave the implementation entirely to the employees. In defining the goal, care was taken to highlight the benefits to the customers and society at large rather than to the company.

Madhur Gandhi

Madhur is a 1st Year student at Fore School of Management. The views expressed are his own based upon the analysis and research he did on the topic from various books, reports and web articles.  He regularly writes for Corporate Monks and Success Monks as a research associate.