Introduction
Since being appointed Google’s CEO in 2015 and Alphabet’s in 2019, Sundar Pichai has received criticism for his decisions as the leader of the technology giant. Pichai is more of a competent leader than a charismatic one, a sharp contrast to his predecessors, Larry Page and Eric Schmidt. However, as a leader with a history of product management, Pichai’s leadership has had a couple of flaws despite tripling the value of Alphabet. Some criticisms against the leader include slow decision-making, a risk-averse leadership style, and slow hiring decisions (Agnihotri & Bhattacharya, 2022). These censures and their possible solutions are discussed below.
Slow and Cautious Decision-Making
One of the weaknesses Sundar Pichai has demonstrated as the CEO of Google and Alphabet is a tendency to make slow decisions when presented with a business opportunity. This has led the vice chairs under him to feel that the company is missing out on numerous opportunities. In a letter addressed to him, the vice chairs clearly expressed this concern and added that they would love to have a more decisive leader as the CEO (Agnihotri & Bhattacharya, 2022). Leaders making decisions under uncertainty can take two extremes: determinism or total ignorance (Marchau et al., 2019). Pichai appears to be a deliberative leader, taking considerable time before making a decision.
The decisions that Pichai makes on behalf of the company are final and not subject to questioning. Since taking the top post at Google, Pichai has fired some employees for criticizing how the company is run. Leaders and employees who take deterministic approaches often overlook their colleagues, as their decisions are often predetermined. Since the leaders also strive for perfect decisions, they often end up being slow. The slow decision-making leadership style adopted by the new Google CEO is flawed, resulting in the technology giant missing some significant business opportunities.
Risk-Averse Leadership Style
One of the main reasons why Pichai takes time before making a decision is his risk-averse personal trait. Pichai seldom says yes to an opportunity, preferring instead to ask for time to consider the matter. Often, after some time, the Indian-American product development leader becomes CEO and declines opportunities presented to him by his vice chairs. A notable example occurred in 2017, when some of his assistants proposed to him that Google should acquire Shopify Inc., an online e-commerce platform. The assistants believed that having the company in Google’s portfolio would have resulted in increased revenues for Google and would have helped the company compete with Amazon in the online retail business.
As things developed, Pichai said he would need to consider the matter before making a decision. Pichai later declined the opportunity, citing that the price of Shopify was too high and that the company was overvalued. Shopify has continued to grow, and as of 2022, it has an equity value that is ten times more than it had in 2017 (Agnihotri & Bhattacharya, 2022). Therefore, the risk-averse leadership style is costing Google significant opportunities, resulting in the recent decline in trust that Google’s employees have in Pichai.
Pichai’s risk-averse leadership style is also demonstrated by how Google launches new products under his stewardship. The former product management chief has introduced an internal process called the “pantry mode” for Google’s research and development (R&D) departments (Agnihotri & Bhattacharya, 2022). This mode entails Google investing heavily in R&D. When a new product is ready, Google holds its release until a competitor launches a similar product. Critics argue that this method is used to minimize risks for the company and, therefore, results in Google missing many opportunities.
The “pantry mode” style of innovation also costs Google billions of dollars in producing products that are not immediately taken to market, which lowers the company’s cash flows and increases the payback period of some innovative products. Pichai should therefore seek a riskier and more rewarding management style when launching new products and innovations for Google. He should also take a long time before retiring products, as some innovations can take a considerable amount of time to become profitable.
Slow Hiring Decisions
As it is with business opportunities, Pichai takes his time before making a hiring decision. Slow hiring is often caused by a lack of planning on the part of the leader and indicates a leader’s lack of confidence in the available talent pool (Kinicki & Williams, 2020). Pichai takes time before filling a particular position, wasting time as the company loses time and opportunities.
A notable example of this habit by Pichai was when he unnecessarily took too much time to select a replacement for Kent Walker after the general counsel was promoted to Vice President of Global Operations (Agnihotri & Bhattacharya, 2022). The vice chairs complain that the replacement for Walker, who would be his deputy, Halima DeLaine Prado, was rather obvious. Nonetheless, Pichai took considerable time to decide on this, stating that he needed to explore more options. The fact that Prado was ultimately appointed reveals a flawed and indecisive leadership style on the part of Pichai.
Other Flaws
Pichai has a couple of leadership shortcomings that have contributed to the employees’ increasingly negative opinions of him. In 2017, Pichai fired one of his assistants when he said that male engineers were more competent than female ones (Agnihotri & Bhattacharya, 2022). An effective leader is expected to have a calmer attitude, and Pichai should have let the issue pass without controversy. Pichai also demonstrated an objective attitude towards employees by rejecting Dr. Timnit Gebru’s article, which criticized Google’s artificial intelligence program. Many employees expressed concerns and wrote to Pichai, asking why he rejected the paper.
Recommendations
Since becoming the leader of Google, Pichai has been criticized for flawed decision-making, a tendency to risk-averse leadership, lagging hiring decisions, and a tendency to quickly fire workers, as well as for avoiding controversy. Although his decisions under uncertainty have been mostly accurate, the company’s employees have reduced confidence in the direction Pichai is taking the company.
Since his methods have proved to work, Pichai should not be quick to change his leadership style. Alphabet should also stick with Pichai for longer, as he has demonstrated the ability to deliver products that people want, such as Google Chrome. However, Pichai should check his leadership style, especially in the R&D departments, and have their leader decide how projects will be launched.
Innovation and Business Survival in Times of Uncertainty
Since the COVID-19 pandemic began, businesses have been operating in a world of uncertainty. Today, most businesses are not only risky but also volatile, ambiguous, and complex (Schoemaker et al., 2018). If Alphabet focuses on more traditional forms of operation, the group will face survival challenges. In contrast, if its CEO, Pichai, opts for a business that seeks new opportunities and leverages big data at its disposal with innovation, the company may do well in times of uncertainty.
Since uncertainty is part of the business, Pichai should know how to deal with it as it arises and use his intuition to make informed decisions that are likely to yield significant returns. Both innovation and business survival should be on the mind of every CEO, including Pichai. The two can be achieved through flexible models, transparency, Optimization, implementing techniques, and embracing ambiguity.
Ensuring Flexibility
One of the best ways for Google’s leadership to ensure that it leaves room for innovation while still ensuring survival in tough times is to build flexible business models. Ademi et al. (2021) have found that strategic flexibility is a prerequisite for business innovation. Since the CEO is a more risk-averse leader, he should be allowed to design systems that the rest of the team should follow in their day-to-day operations. Building rigid models would ensure the business’s survival, as they can help cut unnecessary costs and mitigate uncalculated risk-taking by leaders of different business units.
However, rigidity is dangerous as it can stifle innovation and cause Google to miss some incredible opportunities that arise from time to time. To ensure that room for innovation is made available, Google should design models and have flexible rules that are easily adaptable. For example, in the R&D department, the project managers should be given the autonomy to decide when to launch a particular product. For sustainable growth in the post-pandemic work environment, businesses need principles that are flexible and not rigid rules to be followed by all (Ademi et al., 2021). A slight change in the management method used by Pichai could make Alphabet more flexible.
Being Transparent
As a business leader, a time comes when one is faced with the dilemma of being transparent or concealing and manipulating the information at one’s disposal to reach certain ends. For Pichai, that moment came when he was questioned and asked if Google used slave labor. Unlike other CEOs, such as Jeff Bezos of Amazon, who claimed they did not, Pichai was transparent and said he needed to discuss the issue further to be sure. Although this response led to criticism from fellow employees, it showed that the CEO was willing to be transparent and not give misleading information.
Being transparent can do more harm than good to a business organization in a crisis (Kinicki & Williams, 2020). However, Pichai has not been consistently transparent in his work. In 2021, Pichai asked Dr. Timnit Gebru to resign after she submitted a paper criticizing Google’s AI technology, which was subsequently ordered not to be published. Many employees signed petitions asking why the research was being prohibited from publication. The incident shows that a lack of transparency could cause more harm than good in a business.
Using the Implement and Optimize Technique
In times of uncertainty, which is always the case, businesses should not try to be certain of everything about their ideas before implementing them. Instead, they should use the implement and optimize technique, where they put the idea out there and continue improving it. Ademi et al. (2021) support this strategy, arguing that for businesses to respond effectively to a changing business environment, they should possess strategic flexibility and the ability to develop new business models. In the past, Google has been complimented for its creativity and innovation.
However, as of 2020, concerns have been raised by experts who question the company’s new risk-averse innovation culture, resulting in stagnation in new product development. In the decade spanning 2011 to 2020, Google did not introduce any eye-catching products. Pichai needs to reconsider the strategy the company is using and avoid being too perfect when releasing a new product into the market. He should be willing to release a good enough product and improve it with time. He should borrow from his company’s search engines and study how basic they were in the 90s and how much they have improved today.
Embracing Ambiguous Projects
The ability to be open to multiple interpretations and embrace the process of creating order from chaos is key for any business leader. The business environment is often unstructured, and despite the advancement of technology, which utilizes data to derive insights from large amounts of information, leaders must still make final decisions, as nothing is predictable. In the Past, Pichai has demonstrated a unique ability to work on projects that have been exceptional in the market (Agnihotri & Bhattacharya, 2022).
However, since becoming the company’s CEO, he has adopted a very reserved approach, possibly out of fear of damaging his good reputation. Risk aversion, however, is never a good strategy for a business over the long term, as it results in stagnation and a lack of innovation. If Google refuses to embrace ambiguity and take on risky, unknown projects, its competitors or small start-ups will and could take the company’s market share. However, it is the role of the CEO and other management executives to establish the best risk and rewards trade-off that ensures both sustainability and innovation.
Conclusion
Every CEO, including Pichai, should develop flexible models, be transparent, utilize optimization and Implementation techniques, and embrace ambiguity to ensure that their businesses are both innovative and sustainable. They should incorporate the strategies discussed above with other leadership principles and styles.
Pichai should utilize sensitivity and scenario analysis to evaluate the worst-case, best-case, and base-case scenarios when conducting financial modeling to assess a project’s likely performance. He should also embrace clear communication to rebuild the lost confidence of his employees. Finally, and most importantly, he should understand the uncertain nature of the business environment and be willing to break any rules whenever necessary.
References
Ademi, B., Klungseth, N. J., & Olsson, N. (2021). Strategic flexibility and business model innovation: A Literature Review. European Academy of Management, pp. 1-34.
Agnihotri, A., & Bhattacharya, S. (2022). Google’s chief executive: In need of a change of leadership style? Ivey Publishing.
Kinicki, A., & Williams, B. K. (2020). Management: A practical introduction (9th ed.). McGraw-Hill Education.
Marchau, V. A. W. J., Walker, W. E., Bloemen, P. J. T. M., & Popper, S. W. (Eds.). (2019). Decision making under deep uncertainty. Springer International Publishing.
Schoemaker, P. J. H., Heaton, S., & Teece, D. (2018). Innovation, dynamic capabilities, and leadership. California Management Review, 61(1), 15–42.