High Output Management Quotes

“When the environment changes more rapidly than one can change rules, or when a set of circumstances is so ambiguous and unclear that a contract between the parties that attempted to cover all possibilities would be prohibitively complicated, we need another mode of control, which is based on cultural values. Its most important characteristic is that the interest of the larger group to which an individual belongs takes precedence over the interest of the individual himself. When such values are at work, some emotionally loaded words come into play—words like trust—because you are surrendering to the group your ability to protect yourself. And for this to happen, you must believe that you all share a common set of values, a common set of objectives, and a common set of methods. These, in turn, can only be developed by a great deal of common, shared experience.”
― Andrew S. Grove, High Output Management

“In return for stopping at a red light, we count on other drivers to do the same thing, and we can drive through green lights. But for lawbreakers we need policemen, and with them, as with supervisors, we introduce overhead.”
― Andrew S. Grove, High Output Management

“The nature of control is now based on contractual obligations, which define the kind of work you will do and the standards that will govern it.”
― Andrew S. Grove, High Output Management

“Transactions between companies are usually governed by the free market. When we buy a commodity product from a vendor, we are trying to get it at the best possible price, and vice versa. But what happens when the value of something is not easily defined? What happens, for instance, when it takes a group of people to accomplish a certain task?”
― Andrew S. Grove, High Output Management

“the system is needed to make hybrid organizations work, and while people will strive to find something simpler, the reality is that it doesn’t exist. A strictly functional organization, which is clear conceptually, tends to remove engineering and manufacturing (or the equivalent groups in your firm) from the marketplace, leaving them with no idea of what the customers want. A highly mission-oriented organization, in turn, may have definite crisp reporting relationships and clear and unambiguous objectives at all times. However, the fragmented state of affairs that results causes inefficiency and poor overall performance.”
― Andrew S. Grove, High Output Management

“a strong and positive corporate culture is absolutely essential if dual reporting and decision-making by peers are to work.”
― Andrew S. Grove, High Output Management

“To put a man on the moon, NASA asked several major contractors and many subcontractors to work together, each on a different aspect of the project. An unintended consequence of the moon shot was the development of a new organizational approach: matrix management.”
― Andrew S. Grove, High Output Management

“the most important consideration should be this: the shift back and forth between the two types of organizations can and should be initiated to match the operational styles and aptitudes of the managers running the individual units.”
― Andrew S. Grove, High Output Management

“Do any exceptions exist to the universality of hybrid organizations? The only exceptions that come to my mind are conglomerates, which are typically organized in a totally mission-oriented form. Why are they an exception to our rule? Because they do not have a common business purpose.”
― Andrew S. Grove, High Output Management

“Here I would like to propose Grove’s Law: All large organizations with a common business purpose end up in a hybrid organizational form.”
― Andrew S. Grove, High Output Management

“What are some of the advantages of organizing much of a company in a mission-oriented form? There is only one. It is that the individual units can stay in touch with the needs of their business or product areas and initiate changes rapidly when those needs change. That is it. All other considerations favor the functional-type of organization. But the business of any business is to respond to the demands and needs of its environment, and the need to be responsive is so important that it always leads to much of any organization being grouped in mission-oriented units.”
― Andrew S. Grove, High Output Management

“Having so much of Intel organized in functional units also has its disadvantages. The most important is the information overload hitting a functional group when it must respond to the demands made on it by diverse and numerous business units. Even conveying needs and demands often becomes very difficult—a business unit has to go through a number of management layers to influence decision-making in a functional group. Nowhere is this more evident than in the negotiations that go on to secure a portion of centralized—and limited—resources of the corporation, be it production capacity, computer time, or space in a shared building. Indeed, things often move beyond negotiation to intense and open competition among business units for the resources controlled by the functional groups. The bottom line here is that both the negotiation and competition waste time and energy because neither contributes to the output or the general good of the company.”
― Andrew S. Grove, High Output Management

“Alfred Sloan summed up decades of experience at General Motors by saying, “Good management rests on a reconciliation of centralization and decentralization.” Or, we might say, on a balancing act to get the best combination of responsiveness and leverage.”
― Andrew S. Grove, High Output Management

“The one thing an MBO system should provide par excellence is focus. This can only happen if we keep the number of objectives small. In practice, this is rare, and here, as elsewhere, we fall victim to our inability to say “no”—in this case, to too many objectives.”
― Andrew S. Grove, High Output Management

“For the feedback to be effective, it must be received very soon after the activity it is measuring occurs. Accordingly, an MBO system should set objectives for a relatively short period. For example, if we plan on a yearly basis, the corresponding MBO system’s time frame should be at least as often as quarterly or perhaps even monthly.”
― Andrew S. Grove, High Output Management

“A successful MBO system needs only to answer two questions: 1.  Where do I want to go? (The answer provides the objective.) 2.  How will I pace myself to see if I am getting there? (The answer gives us milestones, or key results.)”
― Andrew S. Grove, High Output Management

“management by objectives—MBO”
― Andrew S. Grove, High Output Management

“Finally, remember that by saying “yes”—to projects, a course of action, or whatever—you are implicitly saying “no” to something else. Each time you make a commitment, you forfeit your chance to commit to something else.”
― Andrew S. Grove, High Output Management

“remember that as you plan you must answer the question: What do I have to do today to solve—or better, avoid—tomorrow’s problem? Thus, the true output of the planning process is the set of tasks it causes to be implemented. The output of Intel’s annual plan, for instance, is the actions taken and changes prompted as a result of the thinking process that took place throughout the organization. I, for one, hardly ever look at the bound volume finally called the Annual Plan. In other words, the output of the planning process is the decisions made and the actions taken as a result of the process.”
― Andrew S. Grove, High Output Management

“Much confusion exists between what is strategy and what is tactics. Although the distinction is rarely of practical significance, here’s one that might be useful. As you formulate in words what you plan to do, the most abstract and general summary of those actions meaningful to you is your strategy. What you’ll do to implement the strategy is your tactics. Frequently, a strategy at one managerial level is the tactical concern of the next higher level.”
― Andrew S. Grove, High Output Management

“Your general planning process should consist of analogous thinking. Step 1 is to establish projected need or demand: What will the environment demand from you, your business, or your organization? Step 2 is to establish your present status: What are you producing now? What will you be producing as your projects in the pipeline are completed? Put another way, where will your business be if you do nothing different from what you are now doing? Step 3 is to compare and reconcile steps 1 and 2. Namely, what more (or less) do you need to do to produce what your environment will demand?”
― Andrew S. Grove, High Output Management

“can think of no better way to make the decision-making process straightforward than to apply before the fact the structure imposed by our six questions.”
― Andrew S. Grove, High Output Management

“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?”
― Andrew S. Grove, High Output Management

“If the decision-making process has proceeded correctly up to this point, the senior manager will be making the decision having had the full benefit of free discussion wherein all points of view, facts, opinions, and judgments were aired without position-power prejudice. In other words, it is legitimate—in fact, sometimes unavoidable—for the senior person to wield position-power authority if the clear decision stage is reached and no consensus has developed. It is not legitimate—in fact, it is destructive—for him to wield that authority any earlier. This is often not easy. We Americans tend to be reluctant to exercise position power deliberately and explicitly—it is just “not nice” to give orders. Such reluctance on the part of the senior manager can prolong the first phase of the decision-making process—the time of free discussion—past the optimum point, and the decision will be put off.”
― Andrew S. Grove, High Output Management

“an organization does not live by its members agreeing with one another at all times about everything. It lives instead by people committing to support the decisions and the moves of the business.”
― Andrew S. Grove, High Output Management

“Finally, everyone involved must give the decision reached by the group full support. This does not necessarily mean agreement: so long as the participants commit to back the decision, that is a satisfactory outcome.”
― Andrew S. Grove, High Output Management

“The next stage is reaching a clear decision. Again, the greater the disagreement about the issue, the more important becomes the word clear. In fact, particular pains should be taken to frame the terms of the decision with utter clarity.”
― Andrew S. Grove, High Output Management

“The first stage should be free discussion, in which all points of view and all aspects of an issue are openly welcomed and debated. The greater the disagreement and controversy, the more important becomes the word free.”
― Andrew S. Grove, High Output Management

“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. When a mission-oriented meeting fails to accomplish the purpose for which it was called, the blame belongs to the chairman”
― Andrew S. Grove, High Output Management

“if a presenter makes a factual error, it is your responsibility to go on record. Remember, you are being paid to attend the meeting, which is not meant to be a siesta in the midst of an otherwise busy day. Regard attendance at the meeting for what it is: work.”
― Andrew S. Grove, High Output Management