Eric Schmidt’s Biggest Mistake

It is not often that a public-company CEO lays bare his faults before his peers (and a global livestreaming audience) and candidly answers a question about the worst thing he or she got wrong in the job.

Tonight, Google Executive Chairman Eric Schmidt did just that. And it is worth noting the authenticity with which he recounted his biggest screw up in a decade as Google CEO was fairly stunning for its directness.

And that is a management lesson for us all to consider.

Specifically, Schmidt said Google missed the huge opportunity to create the social platform that Facebook has become, noting that the now-being-solved platform opportunity around our “identity” is one of the defining opportunities in technology.

“The CEO should take responsibility. I screwed up in missing the ‘identity’ opportunity,” he said. “I wrote memos about it four years ago. I wrote memos about it three years ago. But I did nothing.”

There was a brief pause while the audience simply took in the direct point.

And then Kara asked the perfect followup:

“Why?” she asked.

“Because I was busy,” said Schmidt. Which he no doubt was. Not an excuse. Just a statement of fact.

Schmidt said many other interesting things during his remarks, and then a few more when several of us ate dinner together (though it was a short, cold dinner outside once the sun set). Among them: Google is working on the next generation of search which will be about algorithmically winnowing down its results to the best answer to a query, as opposed to its current model of finding the web page that most closely seems to relate to the query. (This is a big change — and a big deal if done right). He also expressed concerns about countries beginning to wall off the internet from the basic standards that makes it work the same way from Lebanon, PA to Lebanon, in the Mideast. And he showed new Google wallet payment technology which is the company’s entry into the new era-defining opportunity of local-social-mobile commerce. The Mashable guys did a fine job summarizing his remarks here.

But the most memorable thing was his no-nonsense answer to the direct question of what he got wrong, which he volunteered with no caveats.

My own view is that this is what we will remember the longest about what he said here tonight. And there is a lesson in management for all of us in that.