Don’t Touch R&D

It's so wonderful that you have all these different programs encouraging employees to feel empowered to innovate and to kind of deviate a little bit from their daily tasks but you also have to balance I would imagine that desire to experiment with the company's bottom line and get the work done that needs to be done, so how do you go about doing that?

I think it starts with the realization that to ensure that you're building a company that is successful and great for the long term. You have to invest for the long term and so once you start with that that realization that you need to to ensure that you're getting that balance right it really does drive the way for how do you think about capital allocation and I was probably first informed about this as a young associate of Morgan Stanley. I was working on the hostile takeover defense for Gillette and the CEO at the time said do whatever you need to do but you cannot touch my R&D budget. It was a large R&D budget and it would've been extremely valuable as part of the defense we ultimately prevailed. He would not at the time tell us what was in that R&D budget but his message to us was it is not worth being an independent company if I haven't been able to pursue what was in that R&D budget. It turned out that was the sensor raiser and he had the wisdom to know that without investing for the long run there was no purpose fighting for the long run.

At Google what we look at is how do you ensure that we're making the right investments for the long-term and typically I've seen this throughout my career in banking companies wait too long to plant the seeds for those longer-term opportunities and so core to our capital allocation is ensuring we're investing the right amount for the long-term while making the right trade-offs and optimizing investments spend within your existing portfolio as a business and I think for every leader if you look at the leading technology companies 20 years to go, years ago today most of them are no longer in that leadership position and I think that your question really goes to the key point you must invest for the long-term if you hope to have an enduring meaningful successful business.

It needs to be baked into the company's DNA from the very beginning.

Absolutely, because if you wait if you wait until you say it like I don't see where the next opportunity for growth is it's much too late.