Google Takes Another Big Step to Retain Employees: Autonomous Business Units

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There’s a lie that companies and entrepreneurs tell themselves in order to commit to an acquisition.

Oh, we’re not going to change anything! We’re just going to give you more resources to do what you’ve been doing even better!

Yeah! They bought us for a reason, why would they ruin things?

It usually works for a little while, but big company bureaucracy– whether it’s HR, politics or just endless meetings– almost always creeps in. It’s a law of nature: Big companies just need certain processes to run and entrepreneurs hate those processes because they stifle nimble innovation.

Google has a new policy to fight it, according to several sources close to the company. A memo was reportedly sent out a few weeks ago to certain Google business and country heads talking about a new policy of “autonomous units” within the company. It’s being referred to in parts of the company as the “NYT effect,” a reference to this New York Times article that criticized how bloated and bureaucratic Google had become, citing it as a big reason Google was losing employees to smaller companies.

Not everyone gets to be an autonomous unit, but those who do have the freedom to run like independent startups with almost no approvals needed from HQ, according to our sources. For these divisions, Google is essentially a holding company that provides back end services like legal, providing office space and organizing travel, but everything else is up to the pseudo-startup. We’re told the memo cites Slide as the first working example.

It’s unclear how different this may be from Google’s acquisition of YouTube, which also had the promise of autonomy. But even when Google was still private, sticking to such promises was a challenge. Twitter co-founder Evan Williams has openly talked about his frustration when a pre-IPO Google bought Blogger, saying that a big hope was having more resources to hire people, but the process of hiring people was so fraught with logistics and red-tape that hiring was a nightmare.

TechCrunch has not been able to find a copy of this “NYT effect” memo, although while digging, we were told that Google is getting so aggressive on leaks that an average of two people are being fired every month for the offense. (Sorry, guys, but at least Facebook is hiring nearly everyone in Silicon Valley.) We have talked with a few people with or close to Google in other countries that have seen the memo or heard of it, another person who was able to negotiate a deal all of the sudden with an international Google unit that was blocked by corporate months before, and people very close to Slide who say that the company has been running remarkably independently and only a handful of people have left since the deal closed.

One source told us autonomy was not part of Slide’s negotiation, rather it was a decision made a few months ago. As a result, Slide has become more independent since the acquisition, not less, according to this person. Slide even had its own Christmas party last night, and there was nary a Google sign from what we heard. (For comparison sake, TechCrunch is run very distinctly from the rest of AOL, but even we are rocking with the whole Silicon Valley AOL crew later tonight. That should be interesting…)

Even if the policy change is exaggerated by our sources, no one has disputed how distinctly Slide is being run, and that is surprising. Most people– including us– had assumed that the biggest reason Google bought Slide was to acquire talent like CEO and founder Max Levchin and to make the product a key part of its Frankenstein-like social initiatives. It’s not like Slide was YouTube, a distinct consumer brand that was a part of the zeitgeist with hundreds of millions of regular users. Slide has spent most of its life as a work in progress– from photo sharing to push media to SuperPoke and other Facebook apps to games and virtual goods.

According to someone very close to the company, Slide is still evolving and working on something new. Rather than being part of Google’s overall social strategy, whatever Slide is building now is likely a hedge on that greater social strategy not working. This person doesn’t know for sure what the new Google-Slide product will be, although this person’s guess is it goes back Slide’s early days of sharing photos in creative, self-expressive ways. Slide has long seen that the key to social is photo tagging and sharing, and was reevaluating a new way to use that hook on mobile well before the recent explosion of iPhone photo apps like Instagram, Picplz and Path. (I spoke with Levchin briefly this morning, but he declined to comment on anything.)

If you have the memo, we’d love to see it.

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