Consensus governance: how Google does it - and what we can learn

I think we would agree that Google Inc has done more in the last decade to change the way we live and work than any other company. It has become the dominant leader of the digital revolution (and in doing so has probably gathered more information about you and your habits than you know yourself), much as Microsoft dominated the software industry of the previous decade.

So, if we want to understand how best to govern our own businesses nearly ten years into the twenty-first century, we should be able to learn some lessons from how Google does it. The McKinsey Quarterly recently published an interview with Google CEO, Eric Schmidt. One of the most interesting parts of this was Schmidt's explanation of how they run Google by consensus, in preference to a more traditional, hierarchical structure.

Schmidt advocates - and practises - the 'wisdom of crowds' hypothesis - which, in his words, argues that 'groups make better decisions than individuals' ... especially when they are selected from among 'the smartest and most interesting people.' That description sounds to me very much like an affirmation of sound governance by a board of directors.  

But this description raises the question - what then is the role of the leader in today's company? Or is there indeed a role for the leader?  First, says Schmidt, the leader must enforce deadlines - not the outcome.  In other words, he or she must insist on execution, but is not the person to decide the strategy alone.  I take this definition to point the finger at all those boards that make good collective decisions, but then don't ensure their decisions are acted on.

Schmidt then argues - perhaps rather threateningly to a leader uncertain of his or her position - that the second requirement is to get dissent: 'If you don't have dissent then you have a king.' This surely is one of the fundamental features of an effective board - to encourage, or even insist on, differing opinions being aired, as a way of generating discussion and reaching a genuine consensus view.  

When we look at some of the corporate disasters of the last few years, we can ask how differently things might have turned out if the leader had not driven the agenda - and the outcome he (usually it has been 'he') wanted - but instead had allowed the leadership group/team/board to reach a real consensus position; and secondly, what if they had insisted on some dissenting views - people who would play 'devil's advocate', who could ask what the real risks of the preferred strategy might be... and whose careers would not suffer as a result of doing so.

You may remember that saying of Sam Goldwyn: 'I don't want any yes-men around me. I want everybody to tell me the truth even if it costs them their jobs.' Perhaps that's the attitude that has developed in boardrooms over the last decade, which now needs to change.