Knowing the limits of a project is key to sustaining a successful business. Within the past few days, Google has embraced this basic axiom by relegating its various side projects to segmented corporations under the parent company of Alphabet. Why this change, and why Alphabet?

ThinkstockPhotos-144208580In the official newsletter concerning the change, Larry Page, Google’s current CEO, remarked: “We’ve long believed that over time companies tend to get comfortable doing the same thing, just making incremental changes. But in the technology industry, where revolutionary ideas drive the next big growth areas, you need to be a bit uncomfortable to stay relevant.” Put in this light, Alphabet was a wise decision. The change allows Google’s creators and anyone else in the corporation with a bright idea to try it without the fear of hurting the established brand. The institution of Alphabet highlights the fact that Google needs freedom and looseness if the it wishes to keep churning out daring and crazy ideas.

Alphabet exhibits Google’s wisdom in an area where many companies before have faltered. Google is but one project among a horde of others—many completely unrelated to the search engine. Google cannot closely associate with projects unrelated to itself without incurring doubt from investors or confusion within its own walls. Therefore, it would only make sense to reorganize the company. This sort of thinking applies (albeit on much smaller scale) to your business as well. When project outgrows another project, separate the two. As Google has shown, clear organization is incredibly important for maintaining success within your business.

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