High Output Management

by Andrew S. Grove

Put another way, this means that management is a team activity. But 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. The means a manager has at his disposal to

elicit peak individual performance are what the rest of t...

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 ...

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 moti...

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.

How does a manager motivate his subordinates? For most of us, the word implies doing something to another person. But I don’t think that can happen, because motivation has to come from within somebody. Accordingly, all a manager can do is create an environment in which motivated people can flourish.

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.

endeavor. Once someone’s source of motivation is self-actualization, his drive to perform has no limit.

performance. Two inner forces can drive a person to use all of his capabilities. He can be competence-driven or achievement-driven.

The achievement-driven path to self-actualization is not quite like this. Some people—not the majority—are moved by an abstract need to achieve in all that they do.

The point is that both competence- and achievement-oriented people spontaneously try to test the outer limits of their abilities.

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. Output will tend to be greater when everybody strives for a level of achievement beyond his immediate grasp, even though trying means failure half the time. Such goal-setting is extremely important if what you want is peak performance from yourself and your subordinates.

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

So it appears that at the upper level of the need hierarchy, when one is self-actualized, money in itself is no longer a source of motivation but rather a measure of achievement. 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. Thus the second ten million can be just as important to the venture capitalist as the first, since it is not the utilitarian need for the money that drives him but the achievement that it implies, and the need for achievement is boundless.

A simple test can be used to determine where someone is in the motivational hierarchy. If the absolute sum of a raise in salary an individual receives is important to him, he is working mostly within the physiological or safety modes. If, however, what matters to him is how his raise stacks up against what other people got, he is motivated by esteem/recognition or self-actualization, because in this case money is clearly a measure.

The most appropriate measures tie an employee’s performance to the workings of the organization. If performance indicators and milestones in a management-by-objectives system are linked to the performance of the individual, they will gauge his degree of success and will enhance his progress. An obvious and very important responsibility of a manager is to steer his people away from irrelevant and meaningless rewards, such as office size or decor, and toward relevant and significant ones. The most important form of such task-relevant feedback is the performance review every subordinate should receive from his supervisor. More about this later.

In general, in the upper levels of motivation, fear is not something coming from the outside. It is instead fear of not satisfying yourself that causes you to back off. You cannot stay in the self-actualized mode if you’re always worried about failure.

The role of the manager here is also clear: it is that of the coach. First, an ideal coach takes no personal credit for the success of his team, and because of that his players trust him. Second, he is tough on his team. By being critical, he tries to get the best performance his team members can provide. Third, a good coach was likely a good player himself at one time. And having played the game well, he also understands it well. Turning the workplace into a playing field can turn our subordinates into “athletes” dedicated to performing at the limit of their capabilities—the key to making our team consistent winners.

I’ll say again that a manager’s most important responsibility is to elicit top performance from his subordinates.

The conclusion is that varying management styles are needed as task-relevant maturity varies. Specifically, 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. But regardless of what the TRM may be, the manager should always monitor a subordinate’s work closely enough to avoid surprises. The presence or absence of monitoring, as we’ve said before, is the difference between a supervisor’s delegating a task and abdicating it. The characteristics of the effective management style for the supervisor given the varying degrees of TRM are summarized in the table below. A word of caution is in order: do not make a value judgment and consider a structured management style less worthy than a communication-oriented one. What is “nice” or “not nice” should have no place in how yo...

The fundamental variable that determines the effective management style is the task-relevant maturity of the subordinate.

Should the child’s environment suddenly change to one where his life-relevant maturity is inadequate (for example, if he runs into severe academic trouble), the parent may have to revert to a style used earlier. As parental (or managerial) supervision moves from structured to communicating to monitoring, the degree of structure governing the behavior of the child (or the subordinate) does not really change. A teenager knows it is not safe to cross a busy interstate highway on his bicycle, and the parent no longer has to tell him not to do it. Structure moves from being externally imposed to being internally given.

If the parent (or supervisor) imparted early on to the child (or subordinate) the right way to do things (the correct operational values), later the child would be likely to make decisions the way the parent would. In fact, commonality of operational values, priorities, and preferences—how an organization works together—is a must if the progression in managerial style is to occur. Without that commonality, an organization can become easily confused and lose its sense of purpose. Accordingly, the responsibility for transmitting common values rests squarely with the supervisor.

As supervisors, we should try to raise the task-relevant maturity of our subordinates as rapidly as possible for obvious pragmatic reasons.

The appropriate management style for an employee with high TRM takes less time than detailed, structured, supervision requires. Moreover, once operational values are learned and TRM is high enough, the supervisor can delegate tasks to the subordinate, thus increasing his managerial leverage. Finally, at the highest levels of TRM, the subordinate’s training is presumably complete, and motivation is likely to come from within, from self-actualization, which is the most powerful source of energy and effort a manager can harness.

This brings us to the age-old question of whether friendship between supervisor and subordinate is a good thing. Some managers unhesitatingly assert that they never permit social relationships to develop with people they work with. In fact, there are pluses and minuses here. If the subordinate is a personal friend, the supervisor can move into a communicating management style quite easily, but the what-when-how mode becomes harder to revert to when necessary. It’s unpleasant to give orders to a friend. I’ve seen several instances where a supervisor had to make a subordinate-friend toe a disciplinary line. In one case, a friendship was destroyed; in another, the supervisor’s action worked out because the subordinate felt, thanks to the strength of the social relationship, that the supervisor was looking out for his (the subordinate’s) professional interests. Everyone must decide for himself what is professional and appropriate here. A test might be to 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.

The fact is that giving such reviews is the single most important form of task-relevant feedback we as supervisors can provide.

the review will influence a subordinate’s performance—positively or negatively—for a long time, which makes the appraisal one of the manager’s highest-leverage activities.

it is to improve the subordinate’s performance. The review is usually dedicated to two things: first, the skill level of the subordinate, to determine what skills are missing and to find ways to remedy that lack; and second, to intensify the subordinate’s motivation in order to get him on a higher performance curve for the same skill level (see the illustration on this page). The review process also represents the most formal type of institutionalized leadership.

The long and short of it: if performance matters in your operation, performance reviews are absolutely necessary.

To make an assessment less difficult, a supervisor should clarify in his own mind in advance what it is that he expects from a subordinate and then attempt to judge whether he performed to expectations. The biggest problem with most reviews is that we don’t usually define what it is we want from our subordinates, and, as noted earlier, if we don’t know what we want, we are surely not going to get

One big pitfall to be avoided is the “potential trap.” At all times you should force yourself to assess performance, not potential.

the performance rating of a manager cannot be higher than the one we would accord to his organization!

A decision to promote is often linked, as it should be, to the performance review. We must recognize that no action communicates a manager’s values to an organization more clearly and loudly than his choice of whom he promotes.

By elevating someone, we are, in effect, creating role models for others in our organization.

It is hard enough for us to assess our subordinates’ performance, but we must also try to improve it. No matter how well a subordinate has done his job, we can always find ways to suggest improvement, something about which a manager need not feel embarrassed. Blessed with 20/20 hindsight, we can compare what the subordinate did against what he might have done, and the variance can tell both of us how to do things better in the future.

There are three L’s to keep in mind when delivering a review: Level, listen, and leave yourself out. You must level with your subordinate—the credibility and integrity of the entire system depend on your being totally frank. And don’t be surprised to find that praising someone in a straightforward fashion can be just as hard as criticizing him without embarrassment.

The third L is “leave yourself out.” It is very important for you to understand that the performance review is about and for your subordinate.

assessments, analyses of what the subordinate had done in the course of the prior year. Even though their key purpose was to improve the subordinate’s future performance, a majority of the reviews made little or no attempt to define what the subordinate needed to do to improve his performance or even to maintain his current level. It seems that for an achiever the supervisor’s effort goes into determining and justifying the judgment of the superior performance, while giving little attention to how he could do even better. But for a poor performer, the supervisor tends to concentrate heavily on ways he can improve performance, providing detailed and elaborate “corrective action programs,” step-by-step affairs meant to ensure that the marginal employee can pull himself up to meet minimum requirements.

Shouldn’t we spend more time trying to improve the performance of our stars? After all, these people account for a disproportionately large share of the work in any organization. Put another way, concentrating on the stars is a high-leverage activity: if they get better, the impact on group output is very great indeed.

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

to evaluate your performance as his supervisor? I think this might be a good idea. But you should make it clear to your subordinate that it’s your job to assess his performance, while his assessment of you has only advisory status. The point is, he is not your leader; you are his. And under no circumstances should you pretend that you and your subordinates are equal during performance reviews.

In my experience, the best thing to do is to give your subordinate the written review sometime before the face-to-face discussion. He can then read the whole thing privately and digest it. He can react or overreact and then look at the “messages” again. By the time the two of you get together, he will be much more prepared, both emotionally and rationally.

Preparing and delivering a performance assessment is one of the hardest tasks you’ll have to perform as a manager.

The best way to learn how to do one is to think critically about the reviews you...

An interview produces the most insight if you steer the discussion toward subjects familiar to both you and the candidate. The person should talk about himself, his experience, what he has done and why, what he would have done differently if he had it to do over, and so forth, but this should be done in terms familiar to you, so that you can evaluate its significance. In short, make sure the words used mean the same thing to both of you.

group of managers provided me with what they thought were the best questions. They were: — Describe some projects that were highly regarded by your management, especially by the levels above your immediate supervisor. — What are your weaknesses? How are you working to eliminate them? — Convince me why my company should hire you. — What are some of the problems you are encountering in your current position? How are you going about solving them? What could you have done to prevent them from cropping up? — Why do you think you’re ready for this new job? — What do you consider your most significant achievements? Why were they important to you? — What do you consider your most significant failures? What did you learn from them? — Why do you think an engineer should be chosen for a marketing position? (Vary this one according to the situation.) — What was the most important course or project you completed in your college career? Why was it so important? The information to be gained here tends to fall into four distinct categories. First, you’re after an understanding of the candidate’s technical knowledge: not engineering or scientific knowledge, but what he knows about performing the job he wants—his skill level. For an accountant, technical skill means an understanding of accounting; for a tax lawyer, tax laws; for an actuary, statistics and the use of actuarial tables; and so on. Second, you’re trying to assess how this person performed in an earlier job using his sk...

If the absolute amount of a raise in salary is important, that person is probably motivated by physiological or safety/security needs. If the relative amount of a raise—what he got compared to others—is the important issue, that person is likely to be motivated by self-actualization, because money here is a measure, not a necessity.

As managers, our concern is to get a high level of performance from our subordinates. So we want to dispense, allocate, and use money as a way to deliver task-relevant feedback.