High Output Management

by Andrew S. Grove

Let’s refer again to our black box. If the machinery within an organization can be compared to a series of gears, we can visualize how a middle manager affects output. In times of crisis, he provides power to the organization. When things aren’t working as smoothly as they should, he applies a bit of oil.

And, of course, he provides intelligence to the machine to direct its purpose.

9:00–12:00 Executive Staff Meeting (a regular weekly meeting of the company’s senior management). Subjects covered at this particular one:

I decided to conduct a meeting with a group of people to decide what organization would move to a new site we were opening in another state. (This was a decision to hold a decision-making meeting.)

Discussed a variety of requests for my time for a number of meetings in the upcoming week. Suggested alternatives where I decided not to attend.

including progress reports.

When you look at what happened, you won’t see any obvious patterns. I dealt with things in seemingly random fashion.

My day always ends when I’m tired and ready to go home, not when I’m done. I am never done. Like a housewife’s, a manager’s work is never done. There is always more to be done, more that should be done, always more than can be done.

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.

much of my day is spent acquiring...

I use many ways to get it. I read standard reports and memos but also get information ad hoc. I talk to people inside and outside the company, managers at other firms or financial analysts or members of the press. Customer complaints, both external and internal, are also a very important source of information. For example, the Intel...

To cut myself off from the casual complaints of people in that group would be a mistake because I would miss getting an evaluation of my ...

People also tell us things because they want us to do something for them; to advance their case, they will sometimes shower us with useful information. This is something we shoul...

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 t...

So why are written reports necessary at all? They obviously can’t provide timely information. What they do is constitute an archive of data, help to validate ad hoc inputs, and catch, in safety-net fashion, anything you may have missed. But reports also have another totally different function. As they are formulated and written, the author is forced to be more precise than he might be verbally. Hence their value stems from the discipline and the thinking the writer is forced to impose upon himself as he identifies and deals with trouble spots in his presentat...

preparation of an annual plan is in itself the end, not the resulting bound volume. Similarly, our capital authorization process itself is important, not the authorization itself. To prepare and justify a capital spending request, people go through a lot of soul-searching analysis and juggling, and it is this mental exercise that is valuable. The formal authorization is useful only because it enforces the discipline of the process.

Each level in your information hierarchy is important, and you can rely on none alone.

a manager not only gathers information but is also a source of it. He must convey his knowledge to members of his own organization and to other groups he influences.

Beyond relaying facts, 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.

The third major kind of managerial activity, of course, is decision-making. To be sure, once in a while we managers in fact make a decision. But for every time that happens, we participate in the making of many, many others, and we do that in a variety of ways. We provide factual inputs or just offer opinions, we debate the pros and cons of alternatives and thereby force a better decision to emerge, we review decisions made or about to be made by others, encourage or discourage them, ratify or veto them.

decisions can be separated into two kinds. The forward-looking sort are made, for example, in the capital authorization process. Here we allocate the financial resources of the company among various future undertakings. The second type is made as we respond to a developing problem or a crisis, which can either be technical (a quality control problem, for example) or involve people (talking somebody out of quitting).

your decision-making depends finally on how well you comprehend the facts and issues facing your business. This is why information-gathering is so important in a manager’s life. Other activities—conveying information, making decisions, and being a role model for your subordinates—are all governed by the base of information that you, the manager, have about the tasks, the issues, the needs, and the problems facing your organization. In short, information-gathering is the basis of all other managerial work, which is why I choose to spend so much of my day doing it.

In reality, for every unambiguous decision we make, we probably nudge things a dozen times.

While we move about, doing what we regard as our jobs, we are role models for people in our organization—our subordinates, our peers, and even our supervisors. Much has been said and written about a manager’s need to be a leader. The fact is, no single managerial activity can be said to constitute leadership, and nothing leads as well as example.

By this I mean something straightforward. Values and behavioral norms are simply not transmitted easily by talk or memo, but are conveyed very effectively by doing and doing visibly.

Some of us feel comfortable dealing with large groups and talking about our feelings and values openly in that fashion. Others prefer working one-on-one with people in a quieter, more intellectual environment. These and other styles of leadership will work, but only if we recognize and consciously stress the need for us to be role models for people in our organization.

A lawyer who returns to his office after lunch a little drunk does the same. On the other hand, a supervisor in a company, large or small,

who takes his work seriously exemplifies to his associates the most important managerial value of all.

A great deal of a manager’s work has to do with allocating resources: manpow...

most important resource that we allocate from one day to the n...

more money, more manpower, or more capital can always be made available, but our own time is the one absolutely finite resource we each have. Its allocation and ...

How you handle your own time is, in my view, the single most important aspect of bein...

typical day of mine one can count some twenty-five separate activities in which I participated, mostly information-gathering and -giving,...

activities—information-gathering, information-giving, decision-making, nudging, and being a role model—

Meetings provide an occasion for managerial activities. Getting together with others is not, of course, an activity—it is a medium. You as a manager can do your work in a meeting, in a memo, or through a loudspeaker for that matter. But you must choose the most effective medium for what you want to accomplish, and that is the one that gives you the greatest leverage. More about meetings later.

Managerial productivity—that is, the output of a manager per unit of time worked—can be increased in three ways: 1. Increasing the rate with which a manager performs his activities, speeding up his work. 2. Increasing the leverage associated with the various managerial activities. 3. Shifting the mix of a manager’s activities from those with lower to those with higher leverage.

The first is the most obvious example. Consider Robin, an Intel finance manager, responsible for setting up the annual financial planning process for the company. When Robin defines in advance exactly what information needs to be gathered and presented at each stage of the planning process and lays out who is responsible for what, she directly affects the subsequent work of perhaps two hundred people who participate in the planning process. By spending a certain amount of time in advance of the planning activities, Robin will help to eliminate confusion and ambiguity for a large population of managers over an extended period of time. Consequently, her work contributes to the productivity of the entire organization and clearly has great leverage, leverage that depends, however, on when it is performed. Work done in advance of the planning meeting obviously has great leverage. If Robin has to scramble later to help a manager define guidelines and milestones, her work will clearly have much less leverage. Another example of leverage that depends on timely action is what you do when you learn that a valued subordinate has decided to quit. In such a case, you must direct yourself to the situation immediately if you want to change the person’s mind. If you put it off, all your chances are lost. Thus to maximize the leverage of his activities, a manager must keep timeliness, which is often critical, firmly in mind. Leverage can also be negative. Some managerial activities can red...

another example of this kind of leverage. To train a group of salesmen, Barbara, an Intel marketing engineer, sets out to teach them what the organization’s products are. If she does her job well, the salespeople will be better equipped to sell the line. If she does it poorly, great and obvious damage is done.

A manager can also exert high leverage by engaging in an activity that takes him only a short time, but that affects another person’s performance over a long time. A performance review represents a good example of this. With the few hours’ work that a manager spends preparing and delivering the review, he can affect the work of its recipient enormously. Here too a manager can exert either positive or negative leverage. A subordinate can be motivated and even redirected in his efforts, or the review can discourage and demoralize him for who knows how long.

Another example is waffling, when a manager puts off a decision that will affect the work of other people. In effect, 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.

Managerial meddling is also an example of negative leverage. This occurs when a supervisor uses his superior knowledge and experience of a subordinate’s responsibilities to assume command of a situation rather than letting the subordinate work things through himself.

meddling stems from a supervisor exploiting too much superior work knowledge (real or imagined). The negative leverage produced comes from the fact that after being exposed to many such instances, the subordinate will begin to take a much more restricted view of what is expected of him, showing less initiative in solving his own problems and referring them instead to his supervisor. Because the output of the organization will consequently be reduced in the long run, meddling is clearly an activity having negative managerial leverage.

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. Unless both parties share the relevant common base, the delegatee can become an effective proxy only with specific instructions. As in meddling, where specific activities are prescribed in detail, this produces low managerial leverage.

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.

Making certain types of decisions is something managers frequently delegate to subordinates. How is this best done? By monitoring their decision-making process. How do you do that? Let’s examine what Intel goes through to approve a capital equipment purchase. We ask a subordinate to think through the entire matter carefully before presenting a request for approval. And to monitor how good his thinking is, we ask him quite specific questions about his request during a review meeting. If he answers them convincingly, we’ll approve what he wants. This technique allows us to find out how good the thinking is without having to go through it ourselves.

if we determine what is immovable and manipulate the more yielding activities around it, we can work more efficiently.

From my experience a large portion of managerial work can be forecasted.

important way to minimize the feeling and the reality of fragmentation experienced in managerial work. Forecasting and planning your time around key events are literally like running an efficient factory.

What is the medium of a manager’s forecast? It is something very simple: his calendar. Most people use their calendars as a repository of “orders” that come in. Someone throws an order to a manager for his time, and it automatically shows up on his calendar. This is mindless passivity. To gain better control of his time, the manager should use his calendar as a “production” planning tool, taking a firm initiative to schedule work that is not time-critical between those “limiting steps” in the day.