Google’s Alphabet Has a CEO Problem

Asa Mathat

Nest CEO Tony Fadell

MOBILE

• 
  
  
  
  
  
  
  
  
  

The Alphabet companies not named Google make up just 6 percent of the entire tech conglomeration’s workforce, but they account for a growing share of its headaches. Those frustrations are less about the technical hurdles of these lofty moonshots than a concern commonplace with startups: A crisis of leadership.

Google co-founders, now Alphabet honchos, really want to replicate their search engine’s success across a range of industries with operations run like startups. To do that, though, they have to face a dilemma inherent in their structure. That is, they must find execs willing to work within Alphabet’s corporate umbrella, and teams willing to work with their chosen execs.

A trio of developments has emerged in the last two weeks underscoring this tension. First, there was the Bloomberg report that Google is selling Boston Dynamics, its unit that builds dexterous, humanoid robots. Then there was a damning tale of the struggles inside Nest, Alphabet’s connected device company, and its mercurial CEO, Tony Fadell. Finally, the bio-tech trade publication STAT released another damning story on Monday about Verily, Alphabet’s life sciences company, accusing its chief exec of alienating employees and business partners.

With the first two cases, Alphabet’s newfound financial strictness was named as a key factor. Bloomberg cited internal emails from a Google exec voicing concern over the unit’s lack of a short-term revenue plan. Similarly, Fadell pointed to the parent company’s prudence to defend troubles at his own. “The fiscal discipline era has now descended upon everything,” Fadell told The Information.