A few weeks ago the world was introduced to Alphabet, the new parent company and operating structure for Google, its subsidiaries and new ventures.
We also heard a great deal of discussion about the announcement, particularly in our industry, with commentators discussing: the merits or otherwise of the name (that it’s a generic word and can't be ‘owned’); the implications on brand strategy and brand architecture; what it means for the process of name creation; whether it matters that BMW has a business trading under the same name and owns alphabet.com (only if you think one dimensionally about how URL’s are used); employee engagement (apparently, virtually none prior to the announcement – so are Google’s, sorry Alphabet’s employees disenfranchised or motivated by the adherence to their core culture?); and that we need to tear up the rule book on the whole branding process (but then a creative industry bounded by rules isn't that creative, is it?)
I read all of this with interest and came to the conclusion that none of this really matters much. What does matter is that the restructure brings substantial benefits to the business. I think those benefits can be summarised in 4 letters:
I IS FOR IDEAS
Separating the search, social and information service businesses in Alphabet frees its entire innovation pipeline from the constraints of that category. It also allows Google itself to concentrate on its core business, where there are plenty of opportunities for innovation that support its mission – to organise the world’s information.
The launch announcement made clear Alphabet’s intentions, that it is “seriously in the business of starting new things”. What's exciting is that the new things it is increasingly interested in exploring are well beyond its core business. Alphabet will now provide a platform from which it can freely expand into new categories and areas of interest.
F IS FOR FOCUS
The second interesting point from the restructure is the separation of powers between the founders and the new Google CEO, Sundar Pichai. Pichai taking the helm at Google frees Sergey Brin and Larry Page to focus on their aspirations, secure in the knowledge that Google is in the safe hands of someone who breathes the same culture. As Page wrote in his letter, Alphabet is confident that with strong CEOs leading each of their businesses, not just Google, they can continue to flourish.
Separating their innovation and incubator businesses from the core allows the remaining entities in the group to focus on their own purpose. What I haven't seen yet is the purpose of Alphabet, unless it is as simple as “improving the lives of as many people as we can”; this clearly is open to an extremely broad interpretation so ideas can flourish – and perhaps that is the point.
C IS FOR CULTURE
Alphabet is being set up to succeed. And as the operations and interests of the group diversify and new brands emerge, no doubt some if not all will help shape our lives in the future. The business leaders clearly know what they want to achieve, and each CEO has a clear remit. Importantly the culture that made Google such a success has been protected, in the hope that the same culture will incubate new ideas that could become the next Google.
Even if the products and services that Alphabet will be selling in the future haven’t been dreamt of yet, with this restructure the group has made its intentions clear. The entrepreneurial and inventive culture that has made Google what it is today, has been protected and perhaps even enhanced.
And finally, P IS FOR PERFORMANCE
All this adds up to one thing – enhancing the performance of Alphabet, the businesses within it, its leaders, people and their potential for ideas and the new products they bring to market. As the announcement makes clear, this is about “Getting more ambitious things done”, “Making Google even better through greater focus”, “Empowering great entrepreneurs and companies to flourish” and ultimately, “as a result of all this, improving the lives of as many people as we can”.
Time will tell whether Alphabet as a brand name is a success. But ultimately we will only be able to judge whether this change succeeds when we see how the business performs in the long term.
Are there any letters you feel are important in Alphabet?