High Output Management

by Andrew S. Grove

As a micro CEO, you can improve your own and your group’s performance and productivity, whether or not the rest of the company follows suit.

The output of a manager is the output of the organizational units under his or her supervision or influence. The question then becomes, what can managers do to increase the output of their teams? Put another way, what specifically should they be doing during the day when a virtually limitless number of possible tasks calls for their attention?

High managerial productivity, I argue, depends largely on choosing to perform tasks that possess high leverage. A team will perform well only if peak performance is elicited from the individuals in it. This is the third idea of the book.

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.

Intel was known as the best company in the technology industry. It had pulled off the greatest transformation in the history of the business: moving from the memory business to microprocessors more than a decade after its founding.

Andy replied with an answer that I did not expect: “CEOs always act on leading indicators of good news, but only act on lagging indicators of bad news.”

“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.”

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.

Because the art and science of forecasting is so complex, you might be tempted to give all forecasting responsibility to a single manager who can be made accountable for it. But this usually does not work very well. What works better is to ask both the manufacturing and the sales departments to prepare a forecast, so that people are responsible for performing against their own predictions.

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.

A 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.

Let’s call it “nudging” because through it you nudge an individual or a meeting in the direction you would like. This is an immensely important managerial activity in which we engage all the time, and it should be carefully distinguished from decision-making that results in firm, clear directives.

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. For me, paying close attention to customer complaints constitutes a high-leverage activity. Aside from making a customer happy, the pursuit tends to produce important insights into the workings of my own operation.

At Intel we use three kinds of process-oriented meetings: the one-on-one, the staff meeting, and the operation review.

A key point about a one-on-one: It should be regarded as the subordinate’s meeting, with its agenda and tone set by him. There’s good reason for this. Somebody needs to prepare for the meeting. The supervisor with eight subordinates would have to prepare eight times; the subordinate only once. So the latter should be asked to prepare an outline, which is very important because it forces him to think through in advance all of the issues and points he plans to raise.

was informed that I was released, I was told, ‘Bill, in general, people who do well in this company wait until they hear their superiors express their view and then contribute something in support of that view.’ ” This is a terrible way to manage. All it produces is bad decisions, because if knowledgeable people withhold opinions, whatever is decided will be based on information and insight less complete than it could have been otherwise.

In other words, one of the manager’s key tasks is to settle six important questions in advance: • What decision needs to be made? • When does it have to be made? • Who will decide? • Who will need to be consulted prior to making the decision? • Who will ratify or veto the decision? • Who will need to be informed of the decision?

The idea behind MBO is extremely simple: If you don’t know where you’re going, you will not get there. Or, as an old Indian saying puts it, “If you don’t know where you’re going, any road will get you there.”

Here I would like to propose Grove’s Law: All large organizations with a common business purpose end up in a hybrid organizational form.

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

Finally, as you review a manager, should you be judging his performance or the performance of the group under his supervision? You should be doing both. Ultimately what you are after is the performance of the group, but the manager is there to add value in some way.

One big pitfall to be avoided is the “potential trap.” At all times you should force yourself to assess performance, not potential. By “potential” I mean form rather than substance.

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?

A manager generally has two ways to raise the level of individual performance of his subordinates: by increasing motivation, the desire of each person to do his job well, and by increasing individual capability, which is where training comes in. It is generally accepted that motivating employees is a key task of all managers, one that can’t be delegated to someone else. Why shouldn’t the same be true for the other principal means at a manager’s disposal for increasing output?