High Output Management

by Andrew S. Grove

One of the fundamental tenets of Intel’s managerial philosophy is the one-on-one meeting between a supervisor and a subordinate. Its main purposes are mutual education and the exchange of information. By talking about specific problems and situations, the supervisor teaches the subordinate his skills and know-how, and suggests ways to approach things. At the same time, the subordinate provides the supervisor with detailed information about what he is doing and what he is concerned about.

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The point is, the clichés of globalization and the information revolution have real meaning—potentially deadly meaning—for your career. The sad news is, nobody owes you a career. You own it as a sole proprietor. You must compete with millions of individuals every day, and every day you must enhance your value, hone your competitive advantage, learn, adapt, get out of the way, move from job to job, even from industry to industry if you must and retrench if you need to do so in order to start again. The key task is to manage your career so that you do not become a casualty.

How do you add more value? By continually looking for ways to make things truly better in your department.

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?

“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.

“CEOs always act on leading indicators of good news, but only act on lagging indicators of bad news.” “Why?” I asked him. He answered in the style resonant of his entire book: “In order to build anything great, you have to be an optimist, because by definition you are trying to do something that most people would consider impossible. Optimists most certainly do not listen to leading indicators of bad news.”

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.

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

“The good time users among managers do not talk to their subordinates about their problems but they know how to make the subordinates talk about theirs.”

The key to success here is what the chairman does. Very often no one is officially given that title, but by whatever name, one person usually has more at stake in the outcome of the meeting than others. In fact, it is usually the chairman or the de facto chairman who calls the meeting, and most of what he contributes should occur before it begins. All too often he shows up as if he were just another attendee and hopes that things will develop as he wants.

The absolute truth is that if you don’t know what you want, you won’t get it. So before calling a meeting, ask yourself: What am I trying to accomplish?

You can overcome the peer-group syndrome if each of the members has self-confidence, which stems in part from being familiar with the issue under consideration and from experience.

So it is entirely possible for a subordinate to perform well and be rated well even though he missed his specified objective. The MBO system is meant to pace a person—to put a stopwatch in his own hand so he can gauge his own performance. It is not a legal document upon which to base a performance review, but should be just one input used to determine how well an individual is doing. 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.

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

So if two things limit high output, a manager has two ways to tackle the issue: through training and motivation.

An associate of mine who had always done an outstanding job hired a junior person to handle some old tasks, while he himself took on some new ones. The subordinate did poor work. My associate’s reaction: “He has to make his own mistakes. That’s how he learns!” The problem with this is that the subordinate’s tuition is paid by his customers. And that is absolutely wrong. 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 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.

The old saying has it that when we promote our best salesman and make him a manager, we ruin a good salesman and get a bad manager. But if we think about it, we see we have no choice but to promote the good salesman.

The main issue is that becoming a manager is considered as a promotion

The purpose of the review is not to cleanse your system of all the truths you may have observed about your subordinate, but to improve his performance.

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.

I think we have our priorities reversed. 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.

If you have to tell your supervisor about your accomplishments, he obviously doesn’t pay much attention to what you are doing.

Admiral Rickover apparently personally interviewed each candidate and employed techniques like having the candidate sit on a three-legged chair. When it tipped over, the poor man would be left sprawling on the floor. Rickover evidently thought the trick tested strength of character in the face of embarrassment.

For training to be effective, it also has to maintain a reliable, consistent presence. Employees should be able to count on something systematic and scheduled, not a rescue effort summoned to solve the problem of the moment. In other words, training should be a process, not an event.

There is another reason that you and only you can fill the role of the teacher to your subordinates. Training must be done by a person who represents a suitable role model. Proxies, no matter how well versed they might be in the subject matter, cannot assume that role. The person standing in front of the class should be seen as a believable, practicing authority on the subject taught.