The Fascinating 'Two-Pizza Theory' That Google Swears by for Running Businesses

Google's Eric Schmidt and Jonathan Rosenberg explain in a new book called "How Google Works" that Google, and at least one other highly successful company, both have a unique rule for managing priorities in an ever-developing business.

It's called the "two-pizza theory," and essentially states that any team that cannot be fed with two pizzas will start jockeying for credit rather than focusing on the larger goal, but smaller teams are more united in their ambitions.

Glenn Beck interviewed Schmidt and Rosenberg on his radio program Monday, and said the theory touches on a subject he's been wrestling with.

Eric Schmidt (R), Executive Chairman of Google and Jonathan Rosenberg, former Google executive visit FOX Business Network's 'Opening Bell With Maria Bartiromo' on September 24, 2014 in New York City. Credit Rob Kim/Getty Images

"I don't trust a company over 100 people because I just don't think -- there's too many people you have to answer to," Beck told the Google executives.

"That is like, 'don't trust anybody over 30,' Schmidt replied. "You already have more than 100 people!"

"I know," Beck said. "I've got a company of 310 people, and I just -- we can't ever get anything done. ... It's kind of where I'm at, where -- just break everything up into teams because one person cannot handle such a bureaucracy. And the bigger it gets, the more people that have sign off on crap, and you never get anything done! You spend all your time in meetings."

Rosenberg said he understands the difficulty, and Google intentionally keeps teams small to avoid the issue.

"The two-pizza theory we actually got from [Amazon CEO and founder] Jeff Bezos," Rosenberg explained. "Our focus has always been to keep people in very small teams, keep those teams in small groups working together. And then as we scale, we're constantly trying to break the projects down into smaller teams."

The group also discussed the potential for political change in Silicon Valley.

"I could be wrong, but I think there's a change in Silicon Valley," Beck said. "I think there are a lot of people in Silicon Valley that maybe thought they were wildly liberal, and have found themselves to be more libertarian because a lot of these guys are, you know, 25 years old, and they started something in their basement. And now they're like, 'Holy cow, look at what I'm building.' And they know they don't need the government, and now the government is starting to knock on their door and say, 'Hey, hey, you can't do that.'"

This Jan. 3, 2013, file photo shows a Google sign at the company's headquarters in Mountain View, Calif. (AP Photo/Marcio Jose Sanchez, File)

"You guys, on the other hand, are deeply in bed with the government," Beck continued. "You got, what is it, 25 -- the self-driving cars. There were 29 permits issued for the state of California; 25 of them went to you guys."

Schmidt responded: "We're not in bed with them. We're regulated by them. What you're saying is something that's been true for many, many decades. ... The tech industry is famously liberal on social issues, and famously conservative on financial issues. The saying of the industry is: 'Government out of the boardroom, government out of the bedroom.'"

"I think that's roughly what you're feeling," Schmidt continued. "This libertarian streak has been there for a very long time, for the reasons that you say. Exactly right."

More of the conversation, below:

Complimentary Clip from TheBlaze TV

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