High Output Management

by Andrew S. Grove

The organization of one of the managers reporting to me had had a superb year. All output measures were excellent, sales increased, profit margins were good, the products worked—you could hardly even think of giving anything but a superior review to the person in charge. Yet I had some misgivings. Turnover in his group was higher than it should have been, and his people were grumbling too much. There were other such straws in the wind, but who could give credence to elusive signs when tangible, measurable performance was so outstanding? So the manager got a very positive review. The next year his organization took a nose dive. Sales growth disappeared, profitability declined, product development was delayed, and the turmoil among his subordinates deepened. As I prepared the next review of this manager, I struggled to sort out what had happened. Did the manager’s performance deteriorate as suddenly as his organization’s output measures indicated? What was going on? I concluded that in fact the manager’s performance was improving in the second year, even as things seemed to go to hell. The problem was that his performance had not been good a year earlier. The output indicators merely represented work done years ago—the light from distant stars, as it were—which was still holding up. The time offset between the manager’s work and the output of his organization was just about a year. Greatly embarrassed, I regretfully concluded that the superior rating I had given him was tota...