Hire People Stronger Than Yourself: Ogilvy’s Nesting Dolls and Google’s Willingness to Step Aside

Robin: ‘To build a great company, managers must bring in people stronger than themselves. Even employees making internal referrals should recommend people better than themselves.’ --- Ogilvy was founded in 1948 by David Ogilvy, known as the ‘father of modern advertising.’ Its ability to stand tall in global advertising for half a century owed much to the management culture and business philosophy established by its founder. Ogilvy had a habit: whenever someone became a manager, he gave the new appointee a Russian nesting doll. Inside the smallest doll, after all the layers were opened, was a note from him: ‘If each of us hires people smaller than ourselves, we will become a company of dwarfs. But if each of us hires people bigger than ourselves, we will become a company of giants.’ Later called ‘Ogilvy’s law,’ the statement points to a pattern in management. Good managers can build a great company through recruitment—or destroy a good business by hiring and promoting mediocre people. Today its effect is even clearer. ---- In 2004, Google established a referral principle: employees must recommend people stronger than themselves. At that time, half its employees had joined through personal referrals, so whom employees—especially senior ones—recommended mattered greatly. If everyone referred ordinary acquaintances, the company would deteriorate. After its listing, Google therefore adopted Ogilvy’s law as a rule for senior employees. Soon afterward, he asked Google’s head of HR to contact the author, Wu Jun, for recommendations of leading people in machine learning and natural language processing. Wu recommended four, including Kai-Fu Lee and Eric Brill, who later served in a CTO role at eBay. Guided by Ogilvy’s law, Google attracted the world’s leading machine-translation expert, Dr. Och, along with Nuance cofounder Dr. Cohen and some of his founding team. They pioneered Google’s speech-recognition project. A Carnegie Mellon self-driving team also joined, becoming pioneers of Google’s autonomous-driving project today. Dr. Jackson, an early Google arrival from Nuance, recommended the Nuance team. When Cohen and the others arrived, he did not invoke seniority to claim leadership. Similarly, Dr. Alexander Franz, an early leader of Google’s machine-translation work, recommended Dr. Och. Once Och arrived, Franz placed the whole team, including himself, under Och’s management. By continually attracting better people, Google showed exceptional creativity for a period after listing. Many of today’s core products—including YouTube, Android, machine translation, speech recognition, and autonomous cars—were developed then. It took an inclusive mindset for earlier employees to welcome stronger people, even when they took over their work. As Google’s performance rose, early employees such as Jackson and Franz gained enormous benefits from their shares. It was therefore a win-win. If they had protected their little territories by recruiting mediocre people who were easy to manage, they would have turned Google into Ogilvy’s company of dwarfs. Taiwanese entrepreneur Wang Yung-ching’s observation that the breadth of your outlook determines the scale of what you can accomplish expresses the same idea. When stronger people enter a company, a process of selection that favors greater capability is inevitable. It is also what allows the business to endure. Hölzle, who promoted Ogilvy’s law at Google, later made way for Diane Greene, founder of the renowned IT company VMware, with extensive experience in enterprise software and services. As Google’s cloud business continued to lag Amazon, Greene’s takeover substantially improved its competitiveness and market share. Similarly, the renowned AI expert Dr. Norvig brought in Dr. Alfred Z. Spector, who had greater experience in research management, and stepped aside for him. Spector had previously been IBM’s vice president responsible for research across the company. After Google became a large company, finding large numbers of exceptional people grew difficult because the world’s best talent is limited. Today’s Google is therefore a company with a high overall standard but relatively ordinary average ability. ---- Ogilvy’s law applies not only to a company or organization, but also to a region. Since its beginnings, Silicon Valley has never been a place for mediocre people to live and work. It continually brings in better talent and creates more profitable businesses, driving up housing prices. This is a positive and healthy selection process. If, like some regions, it continually subsidized mediocre people so they could remain in the name of supposed fairness, that would favor the wrong people and the whole region would quickly weaken. This is Silicon Valley’s essence. It was never intended for mediocre startups. Although many American university students successfully start businesses, the venture capital system does not deliberately support weak young founders. Its attitude is: ‘If you lack the ability, do not start a business.’ The United States still has the most unicorns, and Silicon Valley has America’s largest concentration. Although engineers can earn very high salaries at Google and Apple, that has not prevented the emergence of Uber, Airbnb, and many other new industry leaders. A relatively strict selection mechanism forces hopeless small companies out early and frees resources for better businesses. If we think of a company as a person and a region as a company, Silicon Valley is the region that best follows Ogilvy’s law. Returning to us as individuals: we must keep bringing in people stronger than ourselves for the overall enterprise to grow. Our companies and regions also need selection mechanisms that favor greater capability so that they can keep improving as a whole. --- #Dedao #WuJunsLettersFromSiliconValley