To make a profit, don’t chase profit

This is a sad story of why a talented Googler decided to leave the company, having lost faith in its ethos.

We shouldn’t judge a company based on the views of one disillusioned employee. This post isn’t really about Google, I’m just using something he says to make a wider point. The part that got my attention was this:

The Google I was passionate about was a technology company that empowered its employees to innovate. The Google I left was an advertising company with a single corporate-mandated focus [trying to beat Facebook and avoid losing the Internet advertising crown].

So what kind of company is Google? An ad company or a tech company? Of course it’s both – they use tech to ‘organise the world’s information’ and generate revenue through advertising. But one trickles down from the other. Tech is what Google is really about. All great companies focus on something higher and if you get that right then profits follow.

When you have an incredibly strong competitor (or you’re just going through a period of bad financial results), it’s so tempting to say ‘SHIT we are losing profit. How can we make more profit?’ But this kind of thinking stifles what really matters – focussing on the mission, innovating and then delivering.

The blog post says that Google has failed to create an exodus from Facebook. I can’t see how they ever will if they try to chase Facebook’s ad dollars and catch up. The focus is in the wrong place.

It seems Google is on the defensive now as the incumbent against the up-start, just as it once was the up-start against Yahoo and Microsoft. Google got ahead of these competitors by doing something new and different, not playing them at their own game. And it did this by having a clear and simple mission which it followed.

The lesson here for all companies is that when you find yourself chasing profit (or a particular competitor,) you’re operating at the wrong level. You need to look higher at the mission and focus on creating a strategy for meeting it. This can lead to innovation that leapfrogs the competition and creates completely new markets, exactly as Google once did and Facebook is doing right now.

Let’s not get into a discussion about Google’s strategy around social networking – there’s plenty of that on the tech blogs. But what do you think about where you should put your attention if you want to build a profitable company?