High Output Management

by Andrew S. Grove

The second idea is that the work of a business, of a government bureacracy, of most forms of human activity, is something pursued not by individuals but by teams. This idea is summed up in what I regard as the single most important sentence of this book: The output of a manager is the output of the organizational units under his or her supervision or influence.

High managerial productivity, I argue, depends largely on choosing to perform tasks that possess high leverage.

A team will perform well only if peak performance is elicited from the individuals in it.

1. Are you adding real value or merely passing information along? How do you add more value? By continually looking for ways to make things truly better in your department. You are a manager. The central thought of my book is that the output of a manager is the output of his organization. In principle, every hour of your day should be spent increasing the output or the value of the output of the people whom you’re responsible for.

2. Are you plugged into what’s happening around you? And that includes what’s happening inside your company as well as inside your industry as a whole. Or do you wait for a supervisor or others to interpret whatever is happening? Are you a node connected to a network of plugged-in people or are you floating by yourself? 3. Are you trying new ideas, new techniques, and new technologies, and I mean personally trying them, not just reading about them? Or are you waiting for others to figure out how they can re-engineer your workplace—and you out of that workplace?

A manager’s output = the output of his organization + the output of the neighboring organizations under his influence.

“When a person is not doing his job, there can only be two reasons for it. The person either can’t do it or won’t do it; he is either not capable or not motivated.”

This insight enables a manager to dramatically focus her efforts. All you can do to improve the output of an employee is motivate and train. There is nothing else.

* The Peter Principle is a concept in management theory in which the selection of a candidate for a position is based on the candidate’s performance in their current role, rather than on abilities related to the intended role. Thus, “managers rise to the level of their incompetence.”

A common rule we should always try to heed is to detect and fix any problem in a production process at the lowest-value stage possible.

A manager’s output = The output of his organization + The output of the neighboring organizations under his influence

he should move to the point where his leverage will be the greatest. As you can see, much of my day is spent acquiring information.

Reports are more a medium of self-discipline than a way to communicate information. Writing the report is important; reading it often is not.

A great deal of a manager’s work has to do with allocating resources: manpower, money, and capital. But the single most important resource that we allocate from one day to the next is our own time.

How you handle your own time is, in my view, the single most important aspect of being a role model and leader.

Managerial productivity—that is, the output of a manager per unit of time worked—can be increased in three ways: 1. Increasing the rate with which a manager performs his activities, speeding up his work. 2. Increasing the leverage associated with the various managerial activities. 3. Shifting the mix of a manager’s activities from those with lower to those with higher leverage.

As a rule of thumb, a manager whose work is largely supervisory should have six to eight subordinates; three or four are too few and ten are too many. This range comes from a guideline that a manager should allocate about a half day per week to each of his subordinates.

The two basic managerial roles produce two basic kinds of meetings. In the first kind of meeting, called a process-oriented meeting, knowledge is shared and information is exchanged. Such meetings take place on a regularly scheduled basis. The purpose of the second kind of meeting is to solve a specific problem. Meetings of this sort, called mission-oriented, frequently produce a decision. They are ad hoc affairs, not scheduled long in advance, because they usually can’t be.

At Intel we use three kinds of process-oriented meetings: the one-on-one, the staff meeting, and the operation review.

Remember, Peter Drucker said that if people spend more than 25 percent of their time in meetings, it is a sign of malorganization. I would put it another way: the real sign of malorganization is when people spend more than 25 percent of their time in ad hoc mission-oriented meetings.

In an MBO system, for example, objectives should be set at a point high enough so that even if the individual (or organization) pushes himself hard, he will still only have a fifty-fifty chance of making them.

Moreover, if we want to cultivate achievement-driven motivation, we need to create an environment that values and emphasizes output.

If you accept that training, along with motivation, is the way to improve the performance of your subordinates, and that what you teach must be closely tied to what you practice, and that training needs to be a continuing process rather than a one-time event, it is clear that the who of the training is you, the manager.

Production Points Identify the operations in your work most like process, assembly, and test production. 10 For a project you are working on, identify the limiting step and map out the flow of work around it. 10 Define the proper places for the equivalents of receiving inspection, in-process inspection, and final inspection in your work. Decide whether these inspections should be monitoring steps or gate-like. Identify the conditions under which you can relax things and move to a variable inspection scheme. 10 Identify half a dozen new indicators for your group’s output. They should measure both the quantity and quality of the output. 10 Install these new indicators as a routine in your work area, and establish their regular review in your staff meetings. 20 What is the most important strategy (plan of action) you are pursuing now? Describe the environmental demand that prompted it and your current status or momentum. Is your strategy likely to result in a satisfactory state of affairs for you or your organization if successfully implemented? 20 Leverage Conduct work simplification on your most tedious, time-consuming task. Eliminate at least 30 percent of the total number of steps involved. 10 Define your output: What are the output elements of the organization you manage and the organizations you can influence? List them in order of importance. 10 Analyze your information- and knowledge-gathering system. Is it properly balanced among “headlines,” “newspaper articles,” ...