Like people, organizations are born into the world. If they’re innovative and compelling, then they grow into productive and energetic adolescents. After that period of adolescence, they inevitably mature and settle down. They purchase a nice house in the suburbs, get a minivan and drive children to soccer practices.
Next comes the inevitable midlife crisis, during which organizations buy a red Mini Cooper, start getting man pedicures and ask themselves, “Is this all there is?” When organizations reach this stage, they have to decide whether to evolve into either a Betty White or a Vanilla Ice organization. The best organizations pull a Betty White and rock it into their 90s. The less fortunate age like a Vanilla Ice caricature on Medicaid, dependent upon nurses to change their soiled diapers and bring them crossword puzzles.
When I learned last week that Google was killing 20-percent time, I visualized a used car dealer handing the company the keys to a Chrysler Town & Country. In the early days, Google founders Sergey Brin and Larry Page encouraged employees to take 20 percent of their time, or one day per week, to focus entirely on an innovative project that might benefit Google. Googlers didn’t have to take the time, but many of them did.
Many 20-percent projects fizzled, but others created explosive growth for the company. Perhaps you’ve heard of some 20-percent projects named Gmail and AdSense. Contrary to recent reports, 20-percent time isn’t completely dead. A performance management tool called “stack ranking” is slowly asphyxiating the policy.
To understand how stack ranking works, imagine having 10 people on your team. Employees are ranked in order from most productive to least productive, and each category must contain a predetermined number of employees. So even if every person on your 10-member team is incredibly productive, the bottom three performers must be graded as “below standards.”
Since stack ranking helps to determine whether a Googler gets a salary increase, many Googlers have settled on getting a raise instead of working on those passion projects. Those projects birthed during 20-percent time lower a person’s productivity and his or her place on the stack rankings. Setting aside time to innovate and to create projects like AdSense, which now generates 25 percent of Google’s revenue, may count against a Googler on a performance review.
Organizations that go the Vanilla Ice route may produce one or two more inconsequential hits. Then, they show up on “Dancing With the Stars” or on “The Surreal Life,” milking their few remaining minutes of fame. Eventually, they’re performing “Ice, Ice Baby” at state fairs around the country while people sculpt cows out of butter. A few develop a new identity and become randomly awesome, like George Takei. The rest languish until they reach the aforementioned Medicaid and soiled diapers.
An organization that goes the Betty White route, however, recovers from mistakes like “The Golden Palace.” They live through the loss of their spouses and friends, but they never stop trying new projects. They never stop finding new things to say and do just like Betty White looked into the camera and shouted “Happy Mother’s Day, motherf*ckers!” after engaging Macgruber in slightly incestuous banter on SNL. Not only is she still doing a weekly television show—at age 91—but she just told People that she’s much sexier at 91 than she was at 90.
A lot of Silicon Valley companies still set aside time for innovation. Facebook, for example, has a hackathon every six to eight weeks. Employees join a Facebook group called “Hackathon Ideas,” where they start posting ideas about a week before each scheduled hackathon. Then, employees split into groups based on the different ideas. They order Chinese food and pull an all-nighter working on cool projects. You’ll see one hackathon project, Facebook Shared Albums, coming out sometime this fall.
Google hasn’t ended 20-percent time altogether. However, stack ranking seems like something that would channel an organization down the Vanilla Ice route. Before you know it, the organization is playing that funky music of uniformity, compliance, enforcement and stale sameness. Employees lose the desire to innovate deep into their careers.
By the way, stack ranking was a huge part of the culture at a company called Enron. Even Vanilla Ice had a far more graceful retirement than those guys.