High Output Management

by Andrew S. Grove

When products and services become largely indistinguishable from each other, all there is by the way of competitive advantage is time.

As a middle manager, of any sort, you are in effect a chief executive of an organization yourself. Don’t wait for the principles and practices you find appealing to be imposed from the top. As a micro CEO, you can improve your own and your group’s performance and productivity, whether or not the rest of the company follows suit.

The output of a manager is the output of the organizational units under his or her supervision or influence.

You need to plan the way a fire department plans. It cannot anticipate where the next fire will be, so it has to shape an energetic and efficient team that is capable of responding to the unanticipated as well as to any ordinary event.

As a general rule, you have to accept that no matter where you work, you are not an employee—you are in a business with one employee: yourself.

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

A manager must keep many balls in the air at the same time and shift his energy and attention to activities that will most increase the output of his organization. In other words, he should move to the point where his leverage will be the greatest.

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

All managers need to act so that they can be seen exerting influence, but they should do so in their own way.

Meetings provide an occasion for managerial activities. Getting together with others is not, of course, an activity—it is a medium.

Each time a manager imparts his knowledge, skills, or values to a group, his leverage is high, as members of the group will carry what they learn to many others.

How often you monitor should not be based on what you believe your subordinate can do in general, but on his experience with a specific task and his prior performance with it—his task-relevant maturity,

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. (Two days a week per subordinate would probably lead to meddling; an hour a week does not provide enough opportunity for monitoring.)

understand that interrupters have legitimate problems that need to be handled. That’s why they’re bringing them to you. But you can channel the time needed to deal with them into organized, scheduled form by providing an alternative to interruption—a scheduled meeting or an office hour.

To make something regular that was once irregular is a fundamental production principle, and that’s how you should try to handle the interruptions that plague you.

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.

I feel that a one-on-one should last an hour at a minimum. Anything less, in my experience, tends to make the subordinate confine himself to simple things that can be handled quickly.

in general, the faster the change in the know-how on which the business depends or the faster the change in customer preferences, the greater the divergence between knowledge and position power is likely to be.

If we don’t link our engineers with our managers in such a way as to get good decisions, we can’t succeed in our industry.

One thing that paralyzes both knowledge and position power possessors is the fear of simply sounding dumb.

each time an insight or fact is withheld and an appropriate question is suppressed, the decision-making process is less good than it might have been.

If good decision-making appears complicated, that’s because it is and has been for a long time.

keep in mind that you implement only that portion of a plan that lies within the time window between now and the next time you go through the exercise. Everything else you can look at again.

A successful MBO system needs only to answer two questions: 1. Where do I want to go? (The answer provides the objective.) 2. How will I pace myself to see if I am getting there? (The answer gives us milestones, or key results.)

if we plan on a yearly basis, the corresponding MBO system’s time frame should be at least as often as quarterly or perhaps even monthly.

The MBO system is meant to pace a person—to put a stopwatch in his own hand so he can gauge his own performance.

If the supervisor mechanically relies on the MBO system to evaluate his subordinate’s performance, or if the subordinate uses it rigidly and forgoes taking advantage of an emerging opportunity because it was not a specified objective or key result, then both are behaving in a petty and unprofessional fashion.

management is not just a team game, it is a game in which we have to fashion a team of teams, where the various individual teams exist in some suitable and mutually supportive relationship with each other.

All large organizations with a common business purpose end up in a hybrid organizational form.

At work, surrendering individual decision-making depends on trusting the soundness of actions taken by your group of peers.

A strictly functional organization, which is clear conceptually, tends to remove engineering and manufacturing (or the equivalent groups in your firm) from the marketplace, leaving them with no idea of what the customers want. A highly mission-oriented organization, in turn, may have definite crisp reporting relationships and clear and unambiguous objectives at all times. However, the fragmented state of affairs that results causes inefficiency and poor overall performance.

Hybrid organizations and the accompanying dual reporting principle, like a democracy, are not great in and of themselves. They just happen to be the best way for any business to be organized.

When the need to stretch is not spontaneous, management needs to create an environment to foster it. 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.

Money in the physiological- and security-driven modes only motivates until the need is satisfied, but money as a measure of achievement will motivate without limit.

when the TRM is low, the most effective approach is one that offers very precise and detailed instructions, wherein the supervisor tells the subordinate what needs to be done, when, and how: in other words, a highly structured approach. As the TRM of the subordinate grows, the most effective style moves from the structured to one more given to communication, emotional support, and encouragement, in which the manager pays more attention to the subordinate as an individual than to the task at hand. As the TRM becomes even greater, the effective management style changes again. Here the manager’s involvement should be kept to a minimum, and should primarily consist of making sure that the objectives toward which the subordinate is working are mutually agreed upon.

What is “nice” or “not nice” should have no place in how you think or what you do. Remember, we are after what is most effective.

The responsibility for teaching the subordinate must be assumed by his supervisor, and not paid for by the customers of his organization, internal or external.

We managers must learn to fight such prejudices and regard any management mode not as either good or bad but rather as effective or not effective, given the TRM of our subordinates within a specific working environment.

There is a huge distinction between a social relationship and a communicating management style, which is a caring involvement in the work of the subordinate.

imagine yourself delivering a tough performance review to your friend. Do you cringe at the thought? If so, don’t make friends at work. If your stomach remains unaffected, you are likely to be someone whose personal relationships will strengthen work relationships.

Words themselves are nothing but a means; getting the right thought communicated is the end.

To make sure you’re being heard, you should watch the person you are talking to. Remember, the more complex the issue, the more prone communication is to being lost.

the move from blaming others to assuming responsibility constitutes an emotional step, while the move from assuming responsibility to finding the solution is an intellectual one, and the latter is easier.

Don’t confuse emotional comfort with operational need. To make things work, people do not need to side with you; you only need them to commit themselves to pursue a course of action that has been decided upon.

We must keep in mind, however, that no matter how stellar a person’s performance level is, there is always room for improvement.

For training to be effective, it has to be closely tied to how things are actually done in your organization.