In an exclusive Q&A, Google’s co-founder and CEO explains how he built a No. 1 workplace — and why it matters.
FORTUNE — Almost since the day it set up shop in a garage, Google has been known as one of the world’s best places to work — if you could get your foot in the door. Crazy-free perks were the reward for graduates of elite schools who had high grade-point averages and who could endure the company’s grueling interview process. The perks remain, but as Google (GOOG) has grown, it has gotten more realistic about recruiting — and kinder about tolerating underperformers. As of last year, the company began recruiting at such nonpedigreed institutions as Texas A&M and the State University of New York at Buffalo; interview sessions that often involved as many as 12 screenings now average between four and five. In an exclusive interview with Fortune, Larry Page, Google’s original CEO, who reassumed the position a year ago, speaks with obvious pride about the “family” environment Google tries to encourage, how it differs from his own grandfather’s workplace, and how free food encourages people to eat less. And while he doesn’t rule out charging for those meals one day, don’t count on its happening anytime soon.
How has the state of being an employee at Google changed over the years?
It changes, obviously, as the company gets bigger. But the thing that really has stuck with me from when I was at Stanford is that when you’re a grad student, you can work on whatever you want. And the projects that were really good got a lot of people really wanting to work on them. We’ve taken that learning to Google, and it’s been really, really helpful. If you’re changing the world, you’re working on important things. You’re excited to get up in the morning. That’s the main thing. You want to be working on meaningful, impactful projects, and that’s the thing there is really a shortage of in the world. I think at Google we still have that. We’ve always had that in spades.
How do you maintain that level of mission for thousands and thousands of employees, as opposed to hundreds a decade ago?
Even when we started in 1998, our mission was to organize the world’s information. I remember I’d stand up on Fridays [at Google’s TGIF events], and we probably had 100 people or so. People would ask me, “We have 100 people — that’s a lot of people. Why do we need more people?” And I was like, Well, organizing the world’s information isn’t something for 100 people to do; it’s something for a lot more people to do. We’ve been lucky that the things we’ve worked on and wanted to work on are huge-impact things, and to do them really well requires a tremendous amount of effort. I don’t think we’re going to run out of important things to do, compared with the resources that we have. There are many, many problems in the world that need solving.
How do you summarize Google’s culture?
My grandfather was an autoworker, and I have a weapon he manufactured to protect himself from the company that he would carry to work. It’s a big iron pipe with a hunk of lead on the head. I think about how far we’ve come as companies from those days, where workers had to protect themselves from the company. My job as a leader is to make sure everybody in the company has great opportunities, and that they feel they’re having a meaningful impact and are contributing to the good of society. As a world, we’re doing a better job of that. My goal is for Google to lead, not follow that.
How important to you are Google’s wonderful lifestyle perks, from the free food to the massages, for the employee experience you’re trying to design?
I don’t think it’s any of those individual things. It’s important that the company be a family, that people feel that they’re part of the company, and that the company is like a family to them. When you treat people that way, you get better productivity. Rather than really caring what hours you worked, you care about output. We should continue to innovate in our relationship with our employees and figure out the best things we can do for them. We’ve been looking a lot at the health of our people, and making sure we’re helping them stay healthy and quit smoking. Our health care costs have grown a lot less fast than other companies as a result of that. But our people have also been a lot happier and more productive, which is much more important.
I can’t imagine a lot of Googlers smoke. Can you give me an example of something that you’re consciously trying to do for the health of employees?
Generally you go to these big facilities for gyms — but we noticed people were heavily using the smaller gyms that are closer to their buildings. [We’ve been] making sure we have really healthy food for people. We started putting the desserts around a wall, just around the corner. We have doctors on site. We’d like to do more of that, where we really make health care convenient and easy and faster, which I think helps people stay healthy. If your access to health care involves your leaving work and driving somewhere and parking and waiting for a long time, that’s not going to promote healthiness.
Is free food sacrosanct at Google?
Will it always be there as long as there’s a Google? I don’t know about always, but it seems to be working for us pretty well. I don’t worry about the cost. The only thing I worry about is making sure we’re not causing too much consumption as a result of it. It does make the company feel more like a family. And to some extent it promotes healthier practices: You don’t have to get a huge portion of something.
You and Sergey were interested in child care long before you had spouses, let alone children. How has becoming a family man changed your concept of work/life balance at Google?
It hasn’t changed that much. We’ve always been good at making sure we’re treating employees flexibly. You treat people with respect, they tend to return the favor to the company. And that goes for families.
Do you think of Google as a headquarters-centric company? You have offices all around the world, but isn’t the power in Mountain View?
On the order of a third of our people are in Mountain View. Over time I hope we become less headquarters-centric and that we improve the tools to let people work from anywhere in the world in a really productive way. On the other hand, California is a really nice place to live, and you’re always welcome to come move and work for us in California.
This article is from the February 6, 2012 issue of Fortune.