How Does Google Face Global Challenges?

NEW YORK—Staying a step ahead of regulators around the world is challenging for any global business. For Google, it is a “significant challenge, to say the least,” said Andy Hinton, vice president of global ethics and compliance at Google, Inc. After organizing the world’s information and making it universally accessible, the company’s secondary mission is products that help users, he said.

“Google is boundary-less when it comes to what those products might be and what they might look like,” Hinton said during The Wall Street Journal’s Newsmaker’s Forum in April. “So trying to keep up with driverless cars, drones and providing internet service with floating balloons around the world (Project Loon) is a challenge.”

Google’s compliance program includes the company’s trade, bribery, internet security and privacy issues. While any number of issues may surface, he said, “one of them is to help the company respond to some of the criticism leveled against it, mostly in jurisdictions outside the United States, and to make sure responses are consistent with applicable laws.”

With Google Earth, for example, equipment must be moved around the world. Google Earth “enables people to get information access to the earth, where they otherwise might not be able to see those things,” Hinton said, noting that people can now view Mt. Everest and other places they may never get to see otherwise.

This involves contact with customs officials and governments and also creates “lots of opportunities to do things wrong and get in trouble,” he said. “So we are always on top of that. Plus, the equipment we use is so unique that we show up in front of a customs official with a camera on top of a tripod on top of a car and they ask, ‘What is that? It’s not in the manual.’ You have to spend time explaining what it is and help them to be comfortable with it.”

While some governments are more difficult to deal with than others, “there are definite challenges in all the continents and countries,” he said. “Obviously privacy is a challenge in Europe, because there is a different perspective around privacy and internet security than there is in the United States. With APAC [Asia Pacific] there is an integration of gift-giving and business that is relatively unique to the APAC region and can present challenges.”

An important part of its compliance strategy is the company’s diversity, which he added is also part of its mission. “Not just diversity in the traditional perspective, but in bringing on people who can understand the challenges in these regions,” he said. “So for gift-giving in the Middle East, sure I can sit in Mountain View trying to figure it out, but we hired an attorney who is in that culture and understands U.S. law and can, in that context, help us navigate the region—balancing expectations of the region with legal expectations in the United States.”

Company Strategy

In fact, Google’s overall hiring policies are part of its strategy to “do things differently, or do them better than other companies,” he said. “That requires us to be incredibly sharp in the way we do hiring.” Now that the company has about 60,000 employees, “it’s important to hire people who share your values and buy into your mission. Because if you are not going to have a lot of rules and you are not going to have an enormous compliance program and checkers following people around, there is a lot of trust and autonomy that you give to your Googlers.”

How does the company accomplish this? “When I interview people and they talk about winning and beating the competition, that’s a huge red flag to me,” he said. “When we started, Larry was very much about the users and we still are. If you build something good that users really like, you can figure out the rest. Revenue and everything else will come. People who have that backwards are tremendously dangerous to the company.”

Google also acquires staff through acquisitions, he said, adding that this talent is “much harder to manage. The larger the acquisition and the more the acquisition has its own culture, the greater the challenge.”

Managing Strategic Risk: Yahoo’s Crisis

All the major tech sector firms have their issues. Apple just lost its transcendent leader. Google’s sprawl, some fear, may be leading it down the same path that Microsoft took as it lost its crown as king of the tech mountain. Facebook, well, really, doesn’t have many real problems considering that its rumored-to-be-coming-soon IPO is expected to take in $100 billion. But privacy concerns persist — so much so that an FTC investigation led the agency to mandate the social network to undergo 20 years of privacy audits and obtain consent from users before sharing their personal information.

But such issues pale in comparison to the crisis Yahoo faces, something that is enticing some firms to make a bid for the former tech giant.

Primarily, the company is suffering from a lack of diversification of its revenue stream. To remain healthy, it likely needs to find ways to make money that aren’t related to email, as the chart above from Business Insider shows. As the publication notes, “For all of its success, at its core, Yahoo is still an email business. People use Yahoo email and then from there land on its other properties. The rise of smartphones and iPads is a problem for Yahoo. On those devices, email is a native application that doesn’t encourage people to checkout Yahoo’s pages.”

We highlighted this threat — which, at least in part, prompted the company to fire CEO Carol Bertz in September — in our annual “Year in Risk” look-back at previous 12 months.

The CEO of Yahoo, a company that helped define the internet as a revolutionary means of communication, found out the old-fashioned way that she had been fired: over the phone. Carol Bartz’s uninspiring two-year reign atop the firm came to end as the company showed little ability to adapt its business model to thrive in either advertising or content creation after partnering with Microsoft in hopes of preserving its original core business — internet search. Yahoo’s stock has yet to recover after cratering in late 2008, leaving many tech analysts to wonder if the company has a future.

It’s hard to say what the company will do to revamp its long-term strategy.

But it is becoming increasingly clear that the current route may be a path to nowhere.

Yes, It’s Data Privacy Day

It may surprise you, as it did me, to learn that today is Data Privacy Day, an “international celebration of the dignity of the individual expressed through personal information.” But Data Privacy Day also highlights the need for individuals to protect their data and how they can go about doing so.

There are many organizations out there that aim to help individuals protect their personal information and help businesses comply with data protection laws and regulations. The Online Trust Alliance is one such organization, whose mission is to create an online trust community, promoting business practices and technologies to enhance consumer trust globally. They recently released their “2011 Data Breach Incident Readiness Guide” to help businesses in breach prevention and incident management.

According to their newest guide, the true test for organizations and businesses should be the ability to answer key questions such as:

  1. Do you know what sensitive information is maintained by your company, where it is stored and how it is kept secure?
  2. Do you have an incident response team in place ready to respond 24/7?
  3. Are management teams aware of security, privacy and regulatory requirements related specifically to your business?
  4. Have you completed a privacy and security audit of all data collection activities, including cloud services, mobile devices and outsourced services?
  5. Are you prepared to communicate to customers, partners and stockholders in the event of a breach or data loss incident?

With the White House, members of Congress, Commerce Department and the FTC calling for greater privacy controls and breach notifications, self-regulation by businesses is becoming more and more important.

Google, one of the supporters of Data Privacy Day and the initiatives of The Privacy Projects, is hosting a public discussion on privacy later this afternoon with representatives from the Electronic Frontier Foundation, the FTC and the National Institute of Standards and Technology scheduled to attend. If you can’t stop by Google’s DC office for this event, don’t worry — it will be captured on video and posted to YouTube soon after.

Happiness 9 to 5

Free beer on Fridays, ping pong breaks and knitting clubs.

Sounds like an activity list from a cruise ship, or maybe the schedule pulled out of a retiree’s planner. Nope, these are the perks that some lucky individuals enjoy on the job every day. Fortune magazine recently released their annual list of 100 Best Companies to Work For, compiled using survey information from the employees themselves. The companies are ranked based on worker responses to questions regarding job satisfaction, benefits programs and management.

It’s not just the employees that reap the rewards of “best company” practices, but studies have revealed that keeping the workers happy results in a more profitable business overall. The Happiness Advantage author, Shawn Achor, writes in his book that happy employees outperform their unhappy coworkers in terms of energy, productivity and healthcare costs. The pattern can be seen across industries, with optimistic sales people selling 37% more and upbeat doctors making 50% more accurate diagnoses.

The insurance company, Aflac, made the list with its on-site child care program and generous spa treatments, and Google, a seasoned veteran, supports its laid-back, often whimsical, office culture by saying, “If you infuse fun into the work environment, you will have more engaged employees, greater job satisfaction, increased productivity and a brighter place to be.”

Employers could take a lesson or two from these happy companies. Workers who love their jobs treat customers better and are loyal to their companies. Investors know this, and they invest in companies with pampered employees because the returns are twice as high as other companies. Money may not get you happiness, but happiness sure does get you money.