Here's a secret they don't teach you in business school. Some of the world's most popular and iconic products, including Gmail and Scotch tape, were developed as side projects by rebellious employees, often in defiance of their bosses.
Embracing side projects rather than reprimanding the employees behind them is the key to business success in the 21st century writes Ryan Tate in his new book, "The 20% Doctrine: How Tinkering, Goofing Off, and Breaking the Rules at Work Drive Success in Business" (HarperBusiness, April 2012).
The book takes its title from one of Google's perks: "20% time." At the search giant, employees are expected to devote a fifth of their work time on projects that don't pertain to their day-to-day duties. The 20% ethic extends beyond this program. It's embodied in so-called hack days where engineers are encouraged to build interesting products in the span of several hours, deliver two-minute presentations, and be judged by their peers on whose hack is best.
Tate, whose day job is technology gossip blogger for Gawker, also writes about how non-tech organizations have used side projects to build businesses and schools. The Huffington Post, for instance, got thousands of volunteers to cover the 2008 presidential campaign, then broke the story of how then-Senator Barack Obama said that "bitter" blue-collar voters clung to guns and religion.
Tate's book is itself a side project, completed over two years on weekends and on his Fridays off from Gawker. Tate talked with FINS about how Yahoo popularized the hack day but failed to capitalize on its innovations, why Google's Marissa Mayer wouldn't talk to him, and why goofing off may be the salvation of American business.
Joseph Walker: Your job at Gawker is usually to tweak and make fun of people in the tech world. Did you have trouble researching the book because of that? I notice you didn't get an interview with Google's Marissa Mayer, who plays a fairly prominent role in the first chapter.
Ryan Tate: I tweak a lot of these companies and people in Gawker and I was really worried that I wouldn't be able to talk with anyone for the book because I'd be stonewalled.
I was never able to get Marissa, and I never got a clear answer on why, but if I had to guess I think it would be some of the things I've written about her.
But having some walls go up in the tech world helped me to go beyond tech and find other examples like in the education and restaurant world.
The Huffington Post was a great example, I was able to reach a lot of people at the Huffington Post despite my chronicling of the company. I never got in touch with Arianna [Huffington], and I heard from someone who asked her on my behalf that the words "over my dead body" were spoken.
JW: What is Google's role in "The 20% Doctrine"?
RT: Google really popularized this idea of giving a certain amount of time for employees to do what they want. They weren't the first to do it, it goes back at least to a 3M engineer who developed a new type of masking tape. Even though he was told to stop doing it, he kept going.
Google seemed to really capture people's imagination and they kept talking about this policy, and it kept creeping up in stories about Google culture. Free food and you got to work on whatever you want. But it was something of a myth because not all employees took advantage of this. And at Google as much as half of your salary is in bonuses, so if your manager wants to discourage you from taking your 20% time they can do it.
Google is still struggling with how to make it work. But it did produce Google's biggest new revenue line since AdWords, which is AdSense and generates 15% of Google's revenues.
The fact that a lot of people have left Google has helped spread the idea. It isn't an accident that Twitter and Facebook are doing this when you look at the number of former Googlers working for those companies.
JW: Since Larry Page took over, Google has been criticized for losing some of that self-directed, anything goes approach. One former employee even said that 20% time is dead. What are your thoughts on this?
RT: The impression I get is that Larry Page is narrowing 20% time as much as possible. I think the reality is Google has a lot of levers to discourage it. The question is, are there executives who still believe enough in it who are forcing the issue? Google is such a large organization that it's unfathomable that there's no one that's making the case for this.
JW: You write about Yahoo's role in popularizing hack days. Can you explain the origin of hack days and their original purpose?
RT: The idea was to do 20% time on the cheap. Instead of giving employees one day per week, let's give them one 24-hour period to show off their ideas and creativity.
Yahoo took it beyond a cost-saving model and said "What if you invest unique resources into it?" They found that it's a nice initial proving ground before you go and invest in a project. The great thing about these hackathons is you get a great dose of upfront feedback. If it's a bad idea, you'll probably get a good sense of that. How much were your colleagues impressed by this idea, how impressed were your managers?
Yahoo's success was mixed. They got some cool products out of it but it clearly has not saved the company.
JW: I've spoken with some Yahoo employees who complain that company executives haven't taken advantage of the products that come out of these hack day events.
RT: I heard repeatedly from people that Yahoo hack days generated a lot of good ideas but they weren't good at converting those ideas into products. And that's key to investing resources into these events, especially at the scale Yahoo did. if you're going to spend all that money, you want to see a return, and Yahoo didn't get that return. They didn't take the time to connect the ideas to the top executives and turn hacks into a product pipeline.
It doesn't mean that the hack days were a failure, but it does mean that anyone who is going to do this has to come up with their own ways of handling and channeling the energy and ideas that come of them.
JW: Ignoring your boss isn't something a career coach would advise you to do. But that's what your book says have created some great innovations. How do employees know when to ignore their boss and when to listen?
RT: The people who've been willing to defy their bosses and go against the grain have had some other part of their job where they have a strong competency that will prevent them from losing their job. So they're out on a limb, but not out on a limb.
It seems the unifying thread in a lot of these cases are people who were willing to risk a reprimand, or a severe talking to or even a suspension but were very unlikely to be fired. You can't be completely on the outs with your boss, and must be considered a valued and productive worker. Once you've started to show results on your main job, you have a little more freedom to push things.
JW: You write that the 20% doctrine is a way of reigniting innovation in America's economy. But American companies want higher productivity and efficiency, which would in theory lead to less time for side projects. How feasible is it for companies to allow such projects?
RT: There's always going to be companies who are in the mind set of keeping costs low and think they can be competitive without tinkering and goofing off. But there will be other companies who worry that they will miss the next big innovation in their industry and will embrace this in order to stay competitive and stay ahead of a fast-changing world.
There are companies who are making money now but are looking down the road five, 10 years from now and asking, "Will I be making money then?"
From my reporting, [the 20% doctrine] seems to be spreading, and partly because of fear. It's a way to hedge against what might be coming down the pike. You have some young people in the organization and you want to keep an eye on what they're doing in their spare time. For some executives it's comforting to have a low-stakes way of experimenting in these areas.
I do think this can be a salvation, or one way American businesses can redeem themselves and stay ahead of the rest of the world.
Write to Joseph Walker at Joseph.Walker@dowjones.com