Organized Confusion – Google and Risk

The latest issue of Fortune magazine has a cover story about “strategic chaos” at Google.  The company is seeking to maximize rewards by being aggressive about risk.

Take the case of Sheryl Sandberg, a 37-year-old vice president whose fiefdom includes the company’s automated advertising system. Sandberg recently committed an error that cost Google several million dollars — “Bad decision, moved too quickly, no controls in place, wasted some money,” is all she’ll say about it — and when she realized the magnitude of her mistake, she walked across the street to inform Larry Page, Google’s co-founder and unofficial thought leader. “God, I feel really bad about this,” Sandberg told Page, who accepted her apology. But as she turned to leave, Page said something that surprised her. “I’m so glad you made this mistake,” he said. “Because I want to run a company where we are moving too quickly and doing too much, not being too cautious and doing too little. If we don’t have any of these mistakes, we’re just not taking enough risk.”

Contrast this approach to risk with the considerations on the table in New Orleans.  At the same time that reconstruction moves along at an unacceptably tedious pace, the city’s leading figures are opening up the school system to private promise makers with claims of building a better mouse trap.  New Orleans’ experiment in charter schools will be watched closely – and the incentives for doing good work and fabricating results will be tremendous at all levels.

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