TUESDAY 11 AUG 2015 2:17 PM


As such a huge force in consumer-facing technology, any news about Google tends to raise the hackles of anyone interested in the company. Thus was the case after the announcement that the founders of Google were to create a corporate brand, Alphabet, to oversee Google, separate businesses it has acquired and new ventures. The new Google CEO will be Sundar Pichai, Chrome’s former head.

Though the news is enough to shock technophiles worldwide, the impact will be minor in terms of the consumer brand. Yet, in regards to employer brand and stakeholder management, Alphabet is an interesting move for Google’s dynamic duo of Larry Page and Sergey Brin.

Ville Hellman, head of development at digital agency Rawnet, says, “This type of restructuring is commonplace in the non-technology world, with conglomerates being the umbrella companies for a variety of sectors. Though in reality, the technology world has grown so diverse now that it has come to encompass several different sectors.” For this reason, Hellman says, an effective management structure that allows for diversification is important in the technology sector.

Yet, John Marshall, chief strategy officer at brand consultancy Lippincott, disagrees somewhat. He says corporate brands are how many companies create a common strategy for all their individual entities through a strong parent brand. He cites Apple, GE and IBM as examples of this. For Google to create an unknown parent brand instead of its omnipresent consumer face, changes must be afoot within the business. Marhsall says, “If one of the world’s most powerful brands can’t encompass the strategy of the company, their ambition must be huge indeed.”

The practicalities of the change are straightforward. ‘Alphabet’ replaces ‘Google’ as the corporate name. Its shares will be sold under the Alphabet brand, not the Google brand. Shareholders of Google will be shareholders of Alphabet. Page’s blog post about the changes says, “Alphabet Inc. will replace Google Inc. as the publicly-traded entity and all shares of Google will automatically convert into the same number of shares of Alphabet, with all of the same rights. Google will become a wholly-owned subsidiary of Alphabet. Our two classes of shares will continue to trade on Nasdaq as GOOGL and GOOG.” However, certain products within Google will be pulled out from under the Google umbrella, including Nest, Life Sciences and research and financial entities.

As each of the sub-brands will be run by a different CEO, they will have the opportunity to develop their own internal cultures, potentially separate from that of Google. Google’s renowned employer brand suits its fast-moving, quirky and groundbreaking nature, but future ventures may have a different personality. Those in the Life Sciences sub-brand that are working on contact lens development will be able to tailor a personality and culture that suits it, separately from Google’s.

Hellman adds, “Google has extended their operations to cover lot of new fields for several years now, and some of the new fields it is entering are only very loosely related to their core business. Bearing this in mind, it makes sense for such a drastic restructure to ensure that the individual entities do not grow too large and sluggish to respond to the ever changing landscape.”

Google has a 4.4 out of 5 rating and is the third-best company for culture and values on employee review site Glassdoor but one employee writes, "It *is* becoming larger, and with it comes growing pains: bureaucracy, slow to respond to market threats, bloated teams, cross-divisional tension." The employee adds that, with any large business, structures have come into place to limit leaks, thus impinging on Google's renwoned transparent, open culture. Others comment on the poor work/life balance and the challenge posed to middle managers operating in a startup-like atmosphere.

Phillip Lane, head of brand & insight at employer brand agency ThirtyThree says that the affect on employer brand may not be entirely positive. He says, "Overall, I don’t think this is a positive move for their reputation as an employer. One of the strengths of Google’s position is/was the culture of openness that allowed people in any global team to collaborate with, learn from and share ideas with others. The new structure potentially reduces this openness – which would certainly be a step backwards if it effectively creates different silos and cultures. There have already been concerns from those who don’t work on flagship/successful products. Now there is the potential challenge that those ‘less successful’ employees may not bask in the Google brand halo at all." However, he says that in new areas, where Google's employer brand is less relevant – robotis, healthcare R&D, automotives, etc. – it may be an opportunity to recruit from new audiences. Though that may come at the expense of what has got Google this far: it's single-minded vision for the company, led by founders Page and Brin.

But for consumers and external stakeholders, the change is minimal. Page says, “I should add that we are not intending for this to be a big consumer brand with related products – the whole point is that Alphabet companies should have independence and develop their own brands.”