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Building a New Breed

Laszlo Bock, Human Resource Executive®'s 2010 HR Executive of the Year, is making the most of Google's number-crunching capacity to build the next generation of HR.

Saturday, October 2, 2010
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On March 26, 2006, at the tender age of 33, Laszlo Bock did something that no person in the course of Google Inc.'s incandescent eight-year history had done before: He assumed the title of vice president of people operations at the Internet giant.

And in the short space of time since his ascension to the newly created post, he has helped guide the company's expansion from 3,000 to 21,000 employees worldwide, maintained Google's place atop countless "Best Places to Work" lists, advised President Obama's transition team on its hiring practices and begun building an advanced HR army that could someday redefine the function as we know it.

In other words, he's completely made the job his own, which is entirely fitting because he's the only person who's ever owned it.

But it is not only for these achievements that Bock is being honored as Human Resource Executive®'s 2010 HR Executive of the Year. With a resume that could easily be considered a headhunter's Holy Grail, and a back story that is worthy of Hollywood treatment, Bock could be considered a harbinger of a new breed of HR executive -- the kind who is already heavily seasoned with business insight and how it relates to the importance of the HR function.

"Laszlo definitely represents a growing, contemporary profile of HR officers today," says Jason Hanold, managing director and leader of the global HR officers' practice at the Chicago office of executive-search firm Russell Reynolds Associates. "We're seeing many more [HR executives] coming in who are just as likely to have MBAs as they are to have degrees in industrial relations, who have broader business acumen than we've traditionally seen and are making an impact earlier than normal."

Hanold, who has known Bock since his early days at Google, thinks Bock is now the measuring stick against which future HR executives will be judged.

"In every search we do for an HR executive, Laszlo embodies the qualities we are looking for," he says. "Every time he speaks about what they're doing over at Google, he's the guy who swings the pendulum of credibility on behalf of the HR function."

And while his apparent influence over the greater HR landscape is impressive, his boss at Google is just as effusive in his praise of his day-to-day efforts.

"Innovation and data are at the core of who we are at Google," says CEO Eric Schmidt, "and Laszlo applies those same principles to HR. He drives cutting-edge people programs and uses rigorous analytics to guide decision-making -- all in the name of finding, growing and keeping great Googlers."

Coming to America

Born to an ethnically Hungarian family in Romania, Bock's family defected and applied for asylum in the United States when he was just a child to escape dictator Nicolae Ceau├žescu's political grip. It was during that defection process that the family briefly stayed in a refugee camp, and while he doesn't retain any memories of the experience, he says his family's motivation for leaving their homeland for America's shores certainly has remained with him.

"My family chose to come to America, of all countries," he says, "because we identified strongly with the values that America stands for."

After self-financing a majority of his undergraduate work in international relations -- which he completed in three years -- at Pomona College in Claremont, Calif., Bock then moved on to get his M.B.A. from Yale University. From there, his steady ascent up the corporate ladder included rungs as a compensation consultant for Hewitt Associates, followed by a stint as an engagement manager at McKinsey & Co., where, in a sign of things to come, he was a member of both the high-tech and organization practices.

Next came another vertical move, up to vice president of human resources, compensation and benefits at GE Commercial Equipment Financing, followed by another move to the same title for GE Capital Solutions.

So, to find himself today leading the HR function at Google -- which is engaged in a race to index, categorize and digitize every bit of information in order to make it more accessible to everyone -- it would seem like something has come full circle for the young boy who came ashore in search of freedom.

"The notion of freedom, and access to information, and giving people a lot of opportunity and then seeing what they can do is something I think a lot of companies shy away from, and something that Google does very well," he says.

Expansion Issues

That freedom to experiment allowed Bock to virtually create an HR function to his specifications when he arrived at the company's Mountain View, Calif., headquarters in 2006.

At that time, the company was going through a huge expansion phase after its humble beginnings as a two-person start-up -- owing, in large part, to the booming popularity of the company's now-ubiquitous search engine. He estimates the company received approximately 7,000 applications daily for positions with the company during 2007. (Daily unsolicited applications now hover around 3,000.)

With no lack of applicants to fill the positions, Bock's challenges lay more with improving the efficiency and quality of the hiring process while not compromising on the quality of those new hires.

"There was a lot of pressure to grow as quickly as we could," he says. "One challenge was making sure that quality of hiring didn't slip."

He established a People Analytics team in order to bring academic-level rigor to people decisions throughout the entire organization. The team is a mix of Ph.D-level researchers who are well-versed in statistical methods, academic literature on people issues and experimental design, and M.B.A.-level business professionals who are able to diagnose and solve people issues that impact business performance.

Another challenge was to ensure that the company's unique culture -- including the open work environment, the free meals in the cafeterias, the bean-bag chairs, the "foosball" tables and all the other perks that have been much written about -- didn't suffer as a result of the influx of new workers.

"How do you make sure that, as the company grew, whatever office in the world you went to, whether it's Tokyo, Johannesburg or London, it still felt like a Google office?" he asks rhetorically.

To make sure the company's culture would be kept alive and represented in each office, Bock instituted a number of policies, including one that states each new office opened must have a tenured Googler as one of the first 10 employees placed there in order to ensure the culture is passed along from veterans to rookies. Also, "Culture Clubs" were formed and made up of volunteers whose tasks were "to keep the culture tight."

Bock says the third challenge lay in figuring out what employees, new arrivals and seasoned Googlers alike would need in order to keep them happy and retained.

"The needs and appetites of the employees shifted quite a bit" since the expansion, he says. "When we were young, it was just enough to be here and it was such a heady experience. Everything was new ... ."

But after employees settled into their roles, they started asking deeper questions, such as: "Where do I go from here?" "What's my next step?" "How do I grow?" "How do I know -- now that I'm not one of a few thousand, but one of many thousands -- that I still matter?"

To answer those questions, Bock says, there's been "a lot of work in terms of recognition systems and giving people visibility across the company and getting better at helping people navigate their own careers."

To that end, documents that the Google board of directors receives at board meetings always feature the names of the authors and contributors, which sometimes include recent college graduates as well as mid-level employees.

The overall approach to HR was so successful that, a year later, Bock was invited by CEO Eric Schmidt to join Google's operating committee and he began reporting directly to Schmidt.

"That Schmidt had never before had an HR person reporting directly to him, at Google or anywhere else, underscores both the quality of the work Laszlo's team accomplished, as well as its centrality to the strategy of the organization," says Gus Mattammal, Bock's college freshman-year roommate and mentor, who is now director of Advantage Testing in Palo Alto, Calif.

Three Thirds

One of the not-so-secret formulas that Bock has employed during his time building out the HR function at Google is called, simply, the Three Thirds.

"The [Three Thirds] mechanism is not only meant to transform the [outside] perception of HR, but to transform the capability of the HR function as well," Bock says.

Basically, the Three Thirds model refers to an HR department that is made up of one-third traditional HR people, one-third "high-end, strategy-consultant" types -- including some with non-HR backgrounds -- and one-third master's- and doctorate-level analytical professionals.

"The idea is that you are able to operate your HR function in a fundamentally different way," Bock says. "You can prove what you're doing, and you can understand your clients' businesses and your CEO's business in a way that's far deeper than you could if you had just grown up in a single function."

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Bock says this diverse mix of his direct reports -- 36 percent have traditional HR backgrounds, 28 percent have analytics backgrounds and 36 percent come from consulting -- allows HR to have much more empathy and understanding of the real challenges that a line manager or employee has, as well as creates a process where traditional HR people can make the most of their "fabulous" pattern recognition of both behaviors and workflows.

"They've seen lots of things happen and they know how to deal with them," Bock says. "They understand how to work closely with employees.

"What the consultants then bring to [the HR function] is this great problem-solving and problem-structuring capability and deep business understanding. When you put those two together, the HR folks teach the consultants about the emotional-intelligence side and how to work with employees and how to accelerate their pattern-recognition development. The consultants teach the HR people more about business and how to solve a big, amorphous problem. And the analytics folks actually let you prove that all this stuff really works. ... It's that cross-fertilization that really makes it work, and at Google, it's been transformative."

The model is not tied to a quota system, but it's something Bock's team monitors as candidates come through. And while this proportion varies across specific teams, it holds true for the organization as a whole.

Bock says the model is part of a larger fight to ensure HR's importance to an organization.

"I think, within the profession, we in HR need to rethink how the profession works and what the talent model is and what we really consider great client service."

For his part, Mattammal is convinced that Bock is keeping busy making Google the place to go in order to become a master of the HR world.

"If I want to be a brand manager, I've got to say Procter & Gamble is the place to go," Mattammal says. "If I want to be a general manager, GE is the place for that. In [Bock's] vision, Google is the place to go and learn HR, where you can then go to other organizations and take what you learned there. He's got a great environment there in terms of trying new initiatives, and the company is committed to thinking about things differently."

But Bock cautions that what may be good for Google may not be good for all.

"I don't think it would make sense for just about any other company to try and replicate what Google does, because so much of how you manage people is [Google]-specific," he says. He does acknowledge that some aspects of the company's HR philosophy can be adopted elsewhere.

"I do think at Google [we've] hit upon some fundamental truths, which I think really matter," Bock says. "One is that, if you give people freedom, they will amaze you. They'll do remarkable things, and all you need to do is give them a little infrastructure and a lot of room to change the world. And I think that holds in any industry."

Taking the long-term view of the HR profession, and in an attempt to attract top students from all fields into the HR profession, Bock and his team have been laying a foundation for a pipeline of future HR talent through its HR Rotational Associate development program for recent college graduates.

After just three years, the program already has more than 90 members and graduates. Each year, 10 to 15 undergraduates, many of whom are former Google interns from previous summers, go through three nine-month rotations, each in a distinct area of People Operations: Analyst, Generalist and Specialist.

This structure is meant to parallel the Three-Thirds hiring model and provides targeted exposure into key areas of the organization. Bock's team also began developing a curriculum to enhance professional, interpersonal and technical learning.

Career-development programming is another component of the program meant to assist associates in growing at Google and beyond. Upon "graduation," associates join a PeopleOps function in a more permanent capacity and are able to contribute more effectively, given their broad context, diverse skill-set and strong network.

While Bock is the chief stakeholder of the program, and strategic decisions are ultimately run through him, day-to-day management is handled by one of his deputies, Brian King.

So is Bock building a new HR army to one day unleash upon the corporate world?

After a good-natured chuckle, Bock admits: "I'd love for that to be the case," and adds that he sees Google as "almost an academy" for best practices and human development.

"It would be outstanding if the next generation of HR leaders came out of Google," Bock says. "I'd love to see that happen, but it's going to be a long time in the future before we see if that actually works, and we still have a lot of work to do on that."

But judging from Bock's meteoric career trajectory up to this point, it may be safe to assume the future is already here.

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