High Output Management

by Andrew S. Grove

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

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.

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.

The first rule is that a measurement—any measurement—is better than none.

you measure a salesman by the orders he gets (output), not by the calls he makes (activity).

The second criterion for a good indicator is that what you measure should be a physical, countable thing.

for leading indicators to do you any good, you must believe in their validity.

linearity indicator can give us an early warning that we are likely to miss our target.

the “stagger chart” the best means of getting a feel for future business trends.

To implement the actual simplification, you must question why each step is performed. Typically, you will find that many steps exist in your work flow for no good reason. Often they are there by tradition or because formal procedure ordains it, and nothing practical requires their inclusion.

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

But output and activity are by no means the same thing.

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.

I have to confess that the information most useful to me, and I suspect most useful to all managers, comes from quick, often casual verbal exchanges. This usually reaches a manager much faster than anything written down. And usually the more timely the information, the more valuable it is.

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 manager must also communicate his objectives, priorities, and preferences as they bear on the way certain tasks are approached. This is extremely important, because only if the manager imparts these will his subordinates know how to make decisions themselves that will be acceptable to the manager, their supervisor. Thus, transmitting objectives and preferred approaches constitutes a key to successful delegation.

information-gathering is the basis of all other managerial work, which is why I choose to spend so much of my day doing it.

the lack of a decision is the same as a negative decision; no green light is a red light, and work can stop for a whole organization.

if a senior manager sees an indicator showing an undesirable trend and dictates to the person responsible a detailed set of actions to be taken, that is managerial meddling.

The third kind of managerial activity with high leverage is exercised by a person with unique skills and knowledge.

The “delegator” and “delegatee” must share a common information base and a common set of operational ideas or notions on how to go about solving problems, a requirement that is frequently not met.

We all have some things that we don’t really want to delegate simply because we like doing them and would rather not let go. For your managerial effectiveness, this is not too bad so long as it is based on a conscious decision that you will hold on to certain tasks that you enjoy performing, even though you could, if you chose, delegate them. But be sure to know exactly what you’re doing, and avoid the charade of insincere delegation, which can produce immense negative managerial leverage.

Before answering, consider the following principle: delegation without follow-through is abdication. You can never wash your hands of a task. Even after you delegate it, you are still responsible for its accomplishment, and monitoring the delegated task is the only practical way for you to ensure a result. Monitoring is not meddling, but means checking to make sure an activity is proceeding in line with expectations. Because it is easier to monitor something with which you are familiar, if you have a choice you should delegate those activities you know best. But recall the pencil experiment and understand before the fact that this will very likely go against your emotional grain.

Is he satisfied with his own performance? Does some frustration or obstacle gnaw at him? Does he have doubts about where he is going?

By learning how this happens in staff meetings, where a group of peers get to know each other, and where the presence of a common supervisor helps peer interaction to develop, managers will be prepared to be members of other working bodies based on peer groups.

What is the role of the supervisor in the staff meeting—a leader, observer, expediter, questioner, decision-maker? The answer, of course, is all of them. Please note that lecturer is not listed. A supervisor should never use staff meetings to pontificate, which is the surest way to undermine free discussion and hence the meeting’s basic purpose.

Staff meetings are an ideal medium for decision-making, because the group of managers present has typically worked together for a long time.

So before calling a meeting, ask yourself: What am I trying to accomplish? Then ask, is a meeting necessary? Or desirable? Or justifiable? Don’t call a meeting if all the answers aren’t yes.

An estimate of the dollar cost of a manager’s time, including overhead, is about $100 per hour.

Keep in mind that a meeting called to make a specific decision is hard to keep moving if more than six or seven people attend. Eight people should be the absolute cutoff. Decision-making is not a spectator sport, because onlookers get in the way of what needs to be done.

We named this the peer-plus-one approach, and have used it since then to aid decision-making where we must. Peers tend to look for a more senior manager, even if he is not the most competent or knowledgeable person involved, to take over and shape a meeting. Why? Because most people are afraid to stick their necks out.

What decision needs to be made? • When does it have to be made? • Who will decide? • Who will need to be consulted prior to making the decision? • Who will ratify or veto the decision? • Who will need to be informed of the decision?

“Group decisions do not always come easily. There is a strong temptation for the leading officers to make decisions themselves without the sometimes onerous process of discussion.”

In fact, planning is an ordinary everyday activity; it’s something all of us do all the time with no fanfare, in both our personal and professional lives.

What do my customers want from me now? Am I satisfying them? What will they expect from me one year from now?

What do you need to do to close the gap? The second is, What can you do to close the gap?

As you formulate in words what you plan to do, the most abstract and general summary of those actions meaningful to you is your strategy. What you’ll do to implement the strategy is your tactics.

we put ourselves through an annual strategic long-range planning effort in which we examine our future five years off. But what is really being influenced here? It is the next year—and only the next year.

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.)

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

To make such a body work requires the voluntary surrender of individual decision-making to the group. Being a member means you no longer have complete freedom of individual action, because you must go along with the decisions of your peers in most instances.

It could also turn out that people who are in a subordinate/supervisory relationship in one plane might find the relationship reversed in another. For example, I am president of Intel, but in another plane I am a member of a strategic planning group, where I report to its chairman, who is one of our division controllers.

He learns that if he is on a boat and wants to get ahead, it is better for him to help row than to run to the bow.

Belief and faith are not aspects of the market mode, but stem from adherence to cultural values.

A manager’s output is the output of the organization under his supervision or influence.

no matter how well a team is put together, no matter how well it is directed, the team will perform only as well as the individuals on it. In other words, everything we’ve considered so far is useless unless the members of our team will continually try to offer the best they can do.

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.

To determine which, we can employ a simple mental test: if the person’s life depended on doing the work, could he do it? If the answer is yes, that person is not motivated; if the answer is no, he is not capable.

The single most important task of a manager is to elicit peak performance from his subordinates. So if two things limit high output, a manager has two ways to tackle the issue: through training and motivation.

The physiological, safety/security, and social needs all can motivate us to show up for work, but other needs—esteem and self-actualization—make us perform once we are there.