Google’s famous 20% rule, is described on their Google Jobs page like this:

We offer our engineers “20-percent time” so that they’re free to work on what they’re really passionate about

I have always wondered how much value they got out of this in practice and so was amused to read Jason Calacanis’s take on it in his 120% solution email yesterday (sufficiently amused to post it on my Tumblog):

When I first learned of Google’s 20% time, hours reserved for engineers to pursue technology projects they find personally rewarding, I thought to myself: “Gosh, that’s brilliantly self-indulgent.” Google’s 20% time has served as a way for the company to recruit and inspire some of the greatest minds in our industry.

It has served them well. Who wouldn’t want to work for a company that essentially says “do what ever you want every Friday!” However, using 20% of your resources to pursue random projects is highly inefficient. While it it might work well for a company like Google, with absurd margins and free cash flow, it’s a fairly crazy strategy for any normal company–or country–to employ.*

I share this view, and combine it with a feeling that the whole idea of the 20% rule as being a key pillar of Google’s innovative culture was a dangerous idea for other people to pick up on, and for employees of other companies to dream about.  At just about every company I know implementing this would make things worse not better.

And now it turns out Google is no different.  Times are tough there now, the share price is down over 50% in the last six months and according to Silicon Alley Insider they are making cost cuts, and, you guessed it, the 20% rule is starting to take a backseat.  From the same Sillicon Alley Insider post:

Google CEO Eric Schmidt’s not even pretending its real [the 20% rule] anymore. Here’s the money quote from the Wall Street Journal‘s rehash of Google’s cost cutting campaign:

“We have to behave as though we don’t know” what’s going to happen, says Google Chief Executive Eric Schmidt. The company will curtail the “dark matter,” he says, projects that “haven’t really caught on” and “aren’t really that exciting.” He says the company is “not going to give” an engineer 20 people to work with on certain experimental projects anymore. “When the cycle comes back,” he says, “we will be able to fund his brilliant vision.”

Hype about things like the 20% rule can be dangerous when other companies start to copy them, or individuals start to demand they be given similar freedoms.  I’m glad to see that the power of this idea is on the wane.  Innovation is of course critical to most of the startups we work with, and it needs investment, but for me that needs to be more carefully nurtured and managed than implied by a simple 20% rule.

*Note that Jason was quick to caveat that he doesn’t in any way blame Google for the current crisis.