High Output Management

by Andrew S. Grove

Being second best in a tough environment is just not good enough.

If the world operates as one big market, every employee will compete with every person anywhere in the world who is capable of doing the same job. There are a lot of them, and many of them are very hungry.

anything that can be done will be done, if not by you, then by someone else.

Again, as a manager in such a workplace, you need to develop a higher tolerance for disorder.

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

High managerial productivity, I argue, depends largely on choosing to perform tasks that possess high leverage.

You need to plan the way a fire department plans. It cannot anticipate where the next fire will be, so it has to shape an energetic and efficient team that is capable of responding to the unanticipated as well as to any ordinary event.

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.

In principle, 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 point is that whenever possible, you should choose in-process tests over those that destroy product.

All production flows have a basic characteristic: the material becomes more valuable as it moves through the process. A boiled egg is more valuable than a raw one, a fully assembled breakfast is more valuable than its constituent parts, and finally, the breakfast placed in front of the customer is more valuable still.

But to run your operation well, you will need a set of good indicators, or measurements.

Indicators tend to direct your attention toward what they are monitoring. It is like riding a bicycle: you will probably steer it where you are looking.

So because indicators direct one’s activities, you should guard against overreacting.

To take big, costly, or worrisome steps when you are not yet sure you have a problem is hard. But unless you are prepared to act on what your leading indicators are telling you, all you will get from monitoring them is anxiety.

There is a second way to improve productivity. We can change the nature of the work performed: what we do, not how fast we do it. We want to increase the ratio of output to activity, thereby increasing output even if the activity per employee-hour remains the same. As the slogan has it, we want to “work smarter, not harder.”

Here I’d like to introduce the concept of leverage, which is the output generated by a specific type of work activity. An activity with high leverage will generate a high level of output; an activity with low leverage, a low level of output.

Thus, a very important way to increase productivity is to arrange the work flow inside our black box so that it will be characterized by high output per activity, which is to say high-leverage activities.

As we will see, in the work of the soft professions, it becomes very difficult to distinguish between output and activity.

A manager can do his “own” job, his individual work, and do it well, but that does not constitute his output. If the manager has a group of people reporting to him or a circle of people influenced by him, the manager’s output must be measured by the output created by his subordinates and associates. If the manager is a knowledge specialist, a know-how manager, his potential for influencing “neighboring” organizations is enormous.

While the manager’s own work is clearly very important, that in itself does not create output. Her organization does. By analogy, a coach or a quarterback alone does not score touchdowns and win games. Entire teams with their participation and guidance and direction do.

What we actually do is difficult to pin down and sum up. Much of it often seems so inconsequential that our position in the business hardly seems justified. Part of the problem here stems from the distinction between our activities, which is what we actually do, and our output, which is what we achieve.

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.

Reports are more a medium of self-discipline than a way to communicate information. Writing the report is important; reading it often is not.

As can be seen from my schedule, 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.

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.

Yet you’re doing something stronger than merely conveying information. Let’s call it “nudging” because through it you nudge an individual or a meeting in the direction you would like.

Finally, something more subtle pervades the day of all managers. 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.

great deal of a manager’s work has to do with allocating resources: manpower, money, and capital. But the single most important resource that we allocate from one day to the next is our own time.

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

Clearly the key to high output means being sensitive to the leverage of what you do during the day.

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.

The art of management lies in the capacity to select from the many activities of seemingly comparable significance the one or two or three that provide leverage well beyond the others and concentrate on them.

Because managerial time has a hierarchy of values, delegation is an essential aspect of management.

Picture this. I am your supervisor, and I walk over to you with pencil in hand and tell you to take it. You reach for the pencil, but I won’t let go. So I say, “What is wrong with you? Why can’t I delegate the pencil to you?”

Before answering, consider the following principle: delegation without follow-through is abdication.

We should apply quality assurance principles and monitor at the lowest-added-value stage of the process. For example, review rough drafts of reports that you have delegated; don’t wait until your subordinates have spent time polishing them into final form before you find out that you have a basic problem with the contents.

To use quality assurance principles effectively, the manager should only go into details randomly, just enough to try to ensure that the subordinate is moving ahead satisfactorily.

The most common approach to increasing a manager’s productivity—his output over time—has been time-management techniques, which try to reduce the denominator on both sides of this equation. Any number of consultants will tell a manager that the way to higher productivity is to handle a piece of paper only once, to hold only stand-up meetings (which will presumably be short), and to turn his desk so that he presents his back to the door.

First, we must identify our limiting step: what is the “egg” in our work? In a manager’s life some things really have to happen on a schedule that is absolute. For me, an example is the class I teach.

A second production principle we can apply to managerial work is batching similar tasks.

What is the medium of a manager’s forecast? It is something very simple: his calendar.

Because manufacturing people trust their indicators, they won’t allow material to begin its journey through the factory if they think it is already operating at capacity. If they did, material might go halfway through and back up behind a bottleneck. Instead, factory managers say “no” at the outset and keep the start level from overloading the system.

Remember too that your time is your one finite resource, and when you say “yes” to one thing you are inevitably saying “no” to another.

An important component of managerial leverage is the number of subordinates a manager has. If he does not have enough, his leverage is obviously reduced.

So as a rule of thumb, if a manager is both a hierarchical supervisor and a supplier of know-how, he should try to have a total of six to eight subordinates or their equivalent.

The next important production concept we can apply to managerial work is to strive toward regularity.

By analogy, if you can pin down what kind of interruptions you’re getting, you can prepare standard responses for those that pop up most often.

So, instead of going into hiding, a manager can hang a sign on his door that says, “I am doing individual work. Please don’t interrupt me unless it really can’t wait until 2:00.” Then hold an open office hour, and be completely receptive to anybody who wants to see you. The key is this: understand that interrupters have legitimate problems that need to be handled. That’s why they’re bringing them to you. But you can channel the time needed to deal with them into organized, scheduled form by providing an alternative to interruption—a scheduled meeting or an office hour.

The two basic managerial roles produce two basic kinds of meetings. In the first kind of meeting, called a process-oriented meeting, knowledge is shared and information is exchanged. Such meetings take place on a regularly scheduled basis. The purpose of the second kind of meeting is to solve a specific problem. Meetings of this sort, called mission-oriented, frequently produce a decision. They are ad hoc affairs, not scheduled long in advance, because they usually can’t be.