Andrew S. Grove | High Output Management

TODO_AUTHOR, (Grove 1995)

Summary

Thoughts

Notes

High Output Management (Andrew S. Grove)

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Adapt or die. ======== High Output Management (Andrew S. Grove)

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What are the rules of the new environment? First, everything happens faster. Second, anything that can be done will be done, if not by you, then by someone else. Let there be no misunderstanding: These changes lead to a less kind, less gentle, and less predictable workplace. ======== High Output Management (Andrew S. Grove)

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This book contains three basic ideas. The first is an output-oriented approach to management. That is to say, we apply some of the principles and the discipline of the most output-oriented of endeavors—manufacturing—to other forms of business enterprise, including most emphatically the work of managers. ======== High Output Management (Andrew S. Grove)

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The second idea is that the work of a business, of a government bureacracy, of most forms of human activity, is something pursued not by individuals but by teams. This idea is summed up in what I regard as the single most important sentence of this book: 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? To give you a way to answer the question, I introduce the concept of managerial leverage, which measures the impact of what managers do to increase the output of their teams. 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. ======== High Output Management (Andrew S. Grove)

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In a slow or no-growth environment, there is another factor that you have to contend with as well: ambitious junior employees who desire to move upward in the organization. They may very well be ready to do so but can’t because you’re in the way. Sooner or later, your boss will inevitably have to make a choice: whether to hold on to you, who is doing a good job but is in the way of another person. The responsibility to avoid such situations is yours. ======== High Output Management (Andrew S. Grove)

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The key task is to manage your career so that you do not become a casualty. I can offer you no surefire formula. But here are a few questions to ponder: 1. Are you adding real value or merely passing information along? How do you add more value? By continually looking for ways to make things truly better in your department. You are a manager. The central thought of my book is that the output of a manager is the output of his organization. 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. 2. Are you plugged into what’s happening around you? And that includes what’s happening inside your company as well as inside your industry as a whole. Or do you wait for a supervisor or others to interpret whatever is happening? Are you a node connected to a network of plugged-in people or are you floating by yourself? 3. 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? ======== High Output Management (Andrew S. Grove)

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In our example, the customer may want to have a perfect three-minute egg with hot buttered toast and steaming coffee waiting for him the moment he sits down. To fulfill such an expectation, you would either have to have your kitchen idle and poised to serve the customer whenever he drops in, or have a ready-to-consume inventory of perfectly boiled eggs, hot buttered toast, and coffee. Neither is practical. ======== High Output Management (Andrew S. Grove)

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Several companies do just this, minus the goal of “perfect” quality; Little Ceasars ======== High Output Management (Andrew S. Grove)

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The first thing we must do is to pin down the step in the flow that will determine the overall shape of our operation, which we’ll call the limiting step. The issue here is simple: which of the breakfast components takes the longest to prepare? ======== High Output Management (Andrew S. Grove)

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Critical Path Analisis ======== High Output Management (Andrew S. Grove)

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What must happen is illustrated opposite. To work back from the time of delivery, you’ll need to calculate the time required to prepare the three components to ensure that they are all ready simultaneously. ======== High Output Management (Andrew S. Grove)

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the three fundamental types of production operations: process manufacturing, an activity that physically or chemically changes material just as boiling changes an egg; assembly, in which components are put together to constitute a new entity just as the egg, the toast, and the coffee together make a breakfast; and test, which subjects the components or the total to an examination of its characteristics. ======== High Output Management (Andrew S. Grove)

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To avoid such problems, you will want to look at the eggs at the time of receipt, something called incoming or receiving inspection. If ======== High Output Management (Andrew S. Grove)

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Performing a functional test is one way. From time to time you open an egg as it comes out of the machine and check its quality. But you will have to throw away the egg tested. A second way involves in-process inspection, which can take many forms. You could, for example, simply insert a thermometer into the water so that the temperature could be easily and frequently checked. To avoid having to pay someone to read the thermometer, you could connect an electronic gadget to it that would set off bells anytime the temperature varied by a degree or two. ======== High Output Management (Andrew S. Grove)

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The point is that whenever possible, you should choose in-process tests over those that destroy product. ======== High Output Management (Andrew S. Grove)

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To avoid that, you need a raw material inventory. But how large should it be? The principle to be applied here is that you should have enough to cover your consumption rate for the length of time it takes to replace your raw material. That means if your egg man comes by and delivers once a day, you want to keep a day’s worth of inventory on hand to protect yourself. ======== High Output Management (Andrew S. Grove)

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Besides the cost of the raw material and the cost of money, you should also try to gauge the opportunity at risk: what would it cost if you had to shut your egg machine down for a day? How many customers would you lose? How much would it cost to lure them back? Such questions define the opportunity at risk. ======== High Output Management (Andrew S. Grove)

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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. ======== High Output Management (Andrew S. Grove)

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All production flows have a basic characteristic: the material becomes more valuable as it moves through the process. ======== High Output Management (Andrew S. Grove)

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The last carries the perceived value ======== High Output Management (Andrew S. Grove)

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The finished product is worth most of all. Curve likely not linear; 100% worth 2x more than 80%. ======== High Output Management (Andrew S. Grove)

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But to run your operation well, you will need a set of good indicators, or measurements. ======== High Output Management (Andrew S. Grove)

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So because indicators direct one’s activities, you should guard against overreacting. This you can do by pairing indicators, so that together both effect and counter-effect are measured. Thus, in the inventory example, you need to monitor both inventory levels and the incidence of shortages. ======== High Output Management (Andrew S. Grove)

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The first rule is that a measurement—any measurement—is better than none. But a genuinely effective indicator will cover the output of the work unit and not simply the activity involved. Obviously, you measure a salesman by the orders he gets (output), not by the calls he makes (activity). ======== High Output Management (Andrew S. Grove)

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The second criterion for a good indicator is that what you measure should be a physical, countable thing. ======== High Output Management (Andrew S. Grove)

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Because those listed here are all quantity or output indicators, their paired counterparts should stress the quality of work. Thus, in accounts payable, the number of vouchers processed should be paired with the number of errors found either by auditing or by our suppliers. ======== High Output Management (Andrew S. Grove)

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competitive spirit engendered frequently has an electrifying effect on the motivation each group brings to its work, ======== High Output Management (Andrew S. Grove)

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Added legibility reduces overall slack kn the system, increasss competition because “low” performance is now visible an implicitly dangerous for employment/career. ======== High Output Management (Andrew S. Grove)

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Leading indicators give you one way to look inside the black box by showing you in advance what the future might look like. And because they give you time to take corrective action, they make it possible for you to avoid problems. Of course, for leading indicators to do you any good, you must believe in their validity. While this may seem obvious, in practice, confidence is not as easy to come by as it sounds. 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. Thus, the indicators you choose should be credible, so that you will, in fact, act whenever they flash warning signals. ======== High Output Management (Andrew S. Grove)

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linearity indicator. ======== High Output Management (Andrew S. Grove)

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trend indicators. ======== High Output Management (Andrew S. Grove)

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build to forecast, which is a contemplation of future orders. ======== High Output Management (Andrew S. Grove)

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Because neither the sales flow nor the manufacturing flow is completely predictable, we should deliberately build a reasonable amount of “slack” into the system. And inventory is the most obvious place for it. ======== High Output Management (Andrew S. Grove)

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There is a gate-like inspection and a monitoring step. In the former, all material is held at the “gate” until the inspection tests are completed. If the material passes, it is moved on to the next stage in the production process; if the material fails, it will be returned to an earlier stage, where it will be reworked or scrapped. In the latter, a sample of the material is taken, and if it fails, a notation is made from which a failure rate is calculated. The bulk of the material is not held as the sample is taken but continues to move through the manufacturing process. The smoothness of the flow is maintained, but if, for example, three successive samples fail the monitoring test, we can stop the line. What is the trade-off here? If we hold all the material, we add to throughput time and slow down the manufacturing process. A monitor produces no comparable slowdown but might let some bad material escape before we can act on the monitor’s results and shut things down, which means that we might have to reject material later at a higher-value stage. Clearly, for the same money we can do a lot more monitoring than gate-type inspections; if we do the former, we may well contribute more to the overall quality of the product than if we choose less frequent gate-like inspections. The trade-off here is not obvious, and any choice has to be made with a specific case in mind. As a rule of thumb, we should lean toward monitoring when experience shows we are not likely to encounter big problems. ======== High Output Management (Andrew S. Grove)

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Another way to lower the cost of quality assurance is to use variable inspections. Because quality levels vary over time, it is only common sense to vary how often we inspect. For instance, if for weeks we don’t find problems, it would seem logical to check less often. But if problems begin to develop, we can test ever more frequently until quality again returns to the previous high levels. The advantage here is still lower costs and even less interference with the production flow. ======== High Output Management (Andrew S. Grove)

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Later, when we examine managerial productivity, we’ll see that when a manager digs deeply into a specific activity under his jurisdiction, he’s applying the principle of variable inspection. If the manager examined everything his various subordinates did, he would be meddling, which for the most part would be a waste of his time. Even worse, his subordinates would become accustomed to not being responsible for their own work, knowing full well that their supervisor will check everything out closely. The principle of variable inspection applied to managerial work nicely skirts both problems, and, as we shall see, gives us an important tool for improving managerial productivity. ======== High Output Management (Andrew S. Grove)

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Thus, one way to increase productivity is to do whatever we are now doing, but faster. This could be done by reorganizing the work area or just by working harder. Here we’ve not changed what work we do, we’ve just instituted ways to do it faster—getting more activities per employee-hour to go on inside the black box. Because the output of the black box is proportional to the activity that occurs within it, we will get more output per hour. 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.” ======== High Output Management (Andrew S. Grove)

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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. For example, a waiter able to boil two eggs and operate two toasters can deliver two breakfasts for almost the same amount of work as one. His output per activity, and therefore his leverage, is high. A waiter who can handle only one egg and one toaster at a time possesses lower output and leverage. The ======== High Output Management (Andrew S. Grove)

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This is called work simplification. To get leverage this way, you first need to create a flow chart of the production process as it exists. Every single step must be shown on it; no step should be omitted in order to pretty things up on paper. Second, count the number of steps in the flow chart so that you know how many you started with. Third, set a rough target for reduction of the number of steps. In the first round of work simplification, our experience shows that you can reasonably expect a 30 to 50 percent reduction. To implement the actual simplification, you must question why each step is performed. Typically, you will find that many steps exist in your work flow for no good reason. Often they are there by tradition or because formal procedure ordains it, and nothing practical requires their inclusion. ======== High Output Management (Andrew S. Grove)

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no matter what reason may be given for a step, you must critically question each and throw out those that common sense says you can do without. ======== High Output Management (Andrew S. Grove)

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nixamitilization ======== High Output Management (Andrew S. Grove)

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the application of the principle to improve the productivity of the “soft professions”—the administrative, professional, and managerial workplace—is new and slow to take hold. The major problem to be overcome is defining what the output of such work is or should be. As we will see, in the work of the soft professions, it becomes very difficult to distinguish between output and activity. And as noted, stressing output is the key to improving productivity, while looking to increase activity can result in just the opposite. ======== High Output Management (Andrew S. Grove)

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What Is a Manager’s Output? I asked a group of middle managers just that question. I got these responses: judgments and opinions direction allocation of resources mistakes detected personnel trained and subordinates developed courses taught products planned commitments negotiated Do these things really constitute the output of a manager? I don’t think so. They are instead activities, or descriptions of what managers do as they try to create a final result, or output. What, then, is a manager’s output? At Intel, if she is in charge of a wafer fabrication plant, her output consists of completed, high-quality, fully processed silicon wafers. If he supervises a design group, his output consists of completed designs that work correctly and are ready to go into manufacturing. If a manager is the principal of a high school, her output will be trained and educated students who have either completed their schooling or are ready to move on to the next year of their studies. If a manager is a surgeon, his output is a fully recovered, healed patient. We can sum matters up with the proposition that: A manager’s output = The output of his organization + The output of the neighboring organizations under his influence Why? Because business and education and even surgery represent work done by teams. 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. The internal consultant who supplies needed insight to a group struggling with a problem will affect the work and the output of the entire group. ======== High Output Management (Andrew S. Grove)

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Thus, the definition of “manager” should be broadened: individual contributors who gather and disseminate know-how and information should also be seen as middle managers, because they exert great power within the organization. ======== High Output Management (Andrew S. Grove)

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the output of a manager is a result achieved by a group either under her supervision or under her influence. While the manager’s own work is clearly very important, that in itself does not create output. Her organization does. ======== High Output Management (Andrew S. Grove)

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And, always, it takes a team to win. ======== High Output Management (Andrew S. Grove)

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Consider my own managerial role. As president of a company, I can affect output through my direct subordinates—group general managers and others like them—by performing supervisory activities. I can also influence groups not under my direct supervision by making observations and suggestions to those who manage them. Both types of activity will, I hope, contribute to my output as a manager by contributing to the output of the company as a whole. I was once asked by a middle manager at Intel how I could teach in-plant courses, visit manufacturing plants, concern myself with the problems of people several levels removed from me in the organization, and still have time to do my job. I asked him what he thought my job was. He thought for a moment, and then answered his own question, “I guess those things are your job too, aren’t they?” They are absolutely my job—not my entire job, but part of it, because they help add to the output of Intel. Let me give another example. Cindy, an engineer at Intel, supervises an engineering group in a wafer fabrication plant. She also spends some of her time as a member of an advisory body that establishes standard procedures by which all the plants throughout the company perform a certain technical process. In both roles, Cindy contributes to the output of the wafer fabrication plants. As a supervising engineer, she performs activities that increase the output of the plant in which she works; as a member of the advisory body, she provides specialized knowledge that will influence and increase the output of “neighboring organizations”—all the other Intel wafer fabrication plants. 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. ======== High Output Management (Andrew S. Grove)

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I feel uncomfortable with this definition in how I read it as defending the idea that those further up the corporate hierarchy claim themselves responsible, individually, for the combined work of those below them. The CEO earned their 300x-rank-and-file-employee annual pay because they own the work of all those below them. ======== High Output Management (Andrew S. Grove)

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“Daddy, What Do You Really Do?” Most of us have had to struggle to answer that question. 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. The latter seems important, significant, and worthwhile. The former often seems trivial, insignificant, and messy. But a surgeon whose output is a cured patient spends his time scrubbing and cutting and suturing, and this hardly sounds very respectable either. ======== High Output Management (Andrew S. Grove)

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Not always bout X ======== High Output Management (Andrew S. Grove)

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Call was ostensibly about a meeting of an industry-wide society, but in reality he was feeling out how I saw business conditions. I did the same. (Information-gathering.) ======== High Output Management (Andrew S. Grove)

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My day always ends when I’m tired and ready to go home, not when I’m done. I am never done. ======== High Output Management (Andrew S. Grove)

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There is always more to be done, more that should be done, always more than can be done. ======== High Output Management (Andrew S. Grove)

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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. ======== High Output Management (Andrew S. Grove)

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managers schedule ======== High Output Management (Andrew S. Grove)

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As you can see, much of my day is spent acquiring information. And as you can also see, I use many ways to get it. I read standard reports and memos but also get information ad hoc. ======== High Output Management (Andrew S. Grove)

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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 should remember, apart from whether we do as they ask. ======== High Output Management (Andrew S. Grove)

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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 presentation. Reports are more a medium of self-discipline than a way to communicate information. Writing the report is important; reading it often is not. There are many parallels to this. As we will see later, the 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. ======== High Output Management (Andrew S. Grove)

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Writing to think ======== High Output Management (Andrew S. Grove)

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Writing to think; writing as thinking ======== High Output Management (Andrew S. Grove)

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To improve and maintain your capacity to get information, you have to understand the way it comes to you. ======== High Output Management (Andrew S. Grove)

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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. ======== High Output Management (Andrew S. Grove)

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a shared corporate culture becomes indispensable to a business. ======== High Output Management (Andrew S. Grove)

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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. ======== High Output Management (Andrew S. Grove)

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You often do things at the office designed to influence events slightly, maybe making a phone call to an associate suggesting that a decision be made in a certain way, or sending a note or a memo that shows how you see a particular situation, or making a comment during an oral presentation. In such instances you may be advocating a preferred course of action, but you are not issuing an instruction or a command. 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. 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. In reality, for every unambiguous decision we make, we probably nudge things a dozen times. ======== High Output Management (Andrew S. Grove)

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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. ======== High Output Management (Andrew S. Grove)

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the single most important resource that we allocate from one day to the next is our own time. In principle 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 use therefore deserve considerable attention. How you handle your own time is, in my view, the single most important aspect of being a role model and leader. ======== High Output Management (Andrew S. Grove)

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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. ======== High Output Management (Andrew S. Grove)

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Leverage is the measure of the output generated by any given managerial activity. Accordingly, managerial output can be linked to managerial activity by the equation: Managerial Output = Output of organization = L 1 × A1 + L2 × A2 +… This equation says that for every activity a manager performs—A1, A2, and so on—the output of the organization should increase by some degree. The extent to which that output is thereby increased is determined by the leverage of that activity—L1, L2, and so on. A manager’s output is thus the sum of the result of individual activities having varying degrees of leverage. Clearly the key to high output means being sensitive to the leverage of what you do during the day. 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. ======== High Output Management (Andrew S. Grove)

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HIGH-LEVERAGE ACTIVITIES These can be achieved in three basic ways: • When many people are affected by one manager. • When a person’s activity or behavior over a long period of time is affected by a manager’s brief, well-focused set of words or actions. • When a large group’s work is affected by an individual supplying a unique, key piece of knowledge or information. ======== High Output Management (Andrew S. Grove)

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Leverage can also be negative. Some managerial activities can reduce the output of an organization. I mean something very simple. Suppose I am a key participant at a meeting and I arrive unprepared. Not only do I waste the time of the people attending the meeting because of my lack of preparation—a direct cost of my carelessness—but I deprive the other participants of the opportunity to use that time to do something else. ======== High Output Management (Andrew S. Grove)

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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. For example, if a senior manager sees an indicator showing an undesirable trend and dictates to the person responsible a detailed set of actions to be taken, that is managerial meddling. In general, 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. ======== High Output Management (Andrew S. Grove)

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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. ======== High Output Management (Andrew S. Grove)

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Because managerial time has a hierarchy of values, delegation is an essential aspect of management. 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. ======== High Output Management (Andrew S. Grove)

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We all have some things that we don’t really want to delegate simply because we like doing them and would rather not let go. For your managerial effectiveness, this is not too bad so long as it is based on a conscious decision that you will hold on to certain tasks that you enjoy performing, even though you could, if you chose, delegate them. But be sure to know exactly what you’re doing, and avoid the charade of insincere delegation, which can produce immense negative managerial leverage. ======== High Output Management (Andrew S. Grove)

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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. ======== High Output Management (Andrew S. Grove)

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Extreme ownership ======== High Output Management (Andrew S. Grove)

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Monitoring the results of delegation resembles the monitoring used in quality assurance. 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. A second principle applies to the frequency with which you check your subordinates’ work. A variable approach should be employed, using different sampling schemes with various subordinates; you should increase or decrease your frequency depending on whether your subordinate is performing a newly delegated task or one that he has experience handling. How often you monitor should not be based on what you believe your subordinate can do in general, but on his experience with a specific task and his prior performance with it—his task-relevant maturity, something I’ll talk about in detail later. As the subordinate’s work improves over time, you should respond with a corresponding reduction in the intensity of the monitoring. ======== High Output Management (Andrew S. Grove)

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Of course, the most obvious way to increase managerial output is to increase the rate, or speed, of performing work. The relationship here is: where L is the leverage of the activity. 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. ======== High Output Management (Andrew S. Grove)

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In short, if we determine what is immovable and manipulate the more yielding activities around it, we can work more efficiently. ======== High Output Management (Andrew S. Grove)

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Time management note link ======== High Output Management (Andrew S. Grove)

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time-management suggestions ======== High Output Management (Andrew S. Grove)

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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. ======== High Output Management (Andrew S. Grove)

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Another production principle can be applied here. 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. Other kinds of managers find this hard to apply because their indicators of capacity are not as well established or not as believable. How much time do you need to read your mail, to write your reports, to meet with a colleague? You may not know precisely, but you surely have a feel for the time required. And you should exploit that sense to schedule your work. To use your calendar as a production-planning tool, you must accept responsibility for two things: 1. You should move toward the active use of your calendar, taking the initiative to fill the holes between the time-critical events with non-time-critical though necessary activities. 2. You should say “no” at the outset to work beyond your capacity to handle. It is important to say “no” earlier rather than later because we’ve learned that to wait until something reaches a higher value stage and then abort due to lack of capacity means losing more money and time. You can obviously say “no” either explicitly or implicitly, because by not delivering you end up saying what amounts to “no.” 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. ======== High Output Management (Andrew S. Grove)

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Link to slack ======== High Output Management (Andrew S. Grove)

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slack—a ======== High Output Management (Andrew S. Grove)

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Link to slack; schedule yourself to 70-80% capacity ======== High Output Management (Andrew S. Grove)

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A manager should carry a raw material inventory in terms of projects. ======== High Output Management (Andrew S. Grove)

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this inventory should consist of things you need to do but don’t need to finish right away—discretionary projects, the kind the manager can work on to increase his group’s productivity over the long term. ======== High Output Management (Andrew S. Grove)

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Most production practices follow well-established procedures and, rather than reinventing the wheel repeatedly, use a specific method that has been shown to work before. But managers tend to be inconsistent and bring a welter of approaches to the same task. We should work to change that. As we become more consistent, we should also remember that the value of an administrative procedure is contained not in formal statements but in the real thinking that led to its establishment. This means that even as we try to standardize what we do, we should continue to think critically about what we do and the approaches we use. ======== High Output Management (Andrew S. Grove)

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As a rule of thumb, a manager whose work is largely supervisory should have six to eight subordinates; three or four are too few and ten are too many. This range comes from a guideline that a manager should allocate about a half day per week to each of his subordinates. (Two days a week per subordinate would probably lead to meddling; an hour a week does not provide enough opportunity for monitoring.) ======== High Output Management (Andrew S. Grove)

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anyone who spends about a half day per week as a member of a planning, advisory, or coordinating group has the equivalent of a subordinate. ======== High Output Management (Andrew S. Grove)

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strive toward regularity. ======== High Output Management (Andrew S. Grove)

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we should try to make our managerial work take on the characteristics of a factory, not a job shop. Accordingly, we should do everything we can to prevent little stops and starts in our day as well as interruptions brought on by big emergencies. Even though some of the latter are unavoidable, we should always be looking for sources of future high-priority trouble by cutting windows into the black box of our organization. Recognizing you’ve got a time bomb on your hands means you can address a problem when you want to, not after the bomb has gone off. But because you must coordinate your work with that of other managers, you can only move toward regularity if others do too. In other words, the same blocks of time must be used for like activities. ======== High Output Management (Andrew S. Grove)

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Let’s apply a production concept. Manufacturers turn out standard products. 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. Customers don’t come up with totally new questions and problems day in and day out, and because the same ones tend to surface repeatedly, a manager can reduce time spent handling interruptions using standard responses. Having them available also means that a manager can delegate much of the job to less experienced personnel. Also, if you use the production principle of batching—that is, handling a group of similar chores at one time—many interruptions that come from your subordinates can be accumulated and handled not randomly, but at staff and at one-on-one meetings, the subject of the next chapter. If such meetings are held regularly, people can’t protest too much if they’re asked to batch questions and problems for scheduled times, instead of interrupting you whenever they want. The use of indicators, especially the bank of indicators kept over time, can also reduce the time a manager spends dealing with interruptions. How fast he can answer a question depends on how fast he can put his finger on the information he needs for a response. By maintaining an archive of information, a manager doesn’t have to do ad hoc research every time the phone rings. ======== High Output Management (Andrew S. Grove)

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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. ======== High Output Management (Andrew S. Grove)

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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 point is to impose a pattern on the way a manager copes with problems. To make something regular that was once irregular is a fundamental production principle, and that’s how you should try to handle the interruptions that plague you. ======== High Output Management (Andrew S. Grove)

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meeting is nothing less than the medium through which managerial work is performed. ======== High Output Management (Andrew S. Grove)

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we should not be fighting their very existence, but rather using the time spent in them as efficiently as possible. ======== High Output Management (Andrew S. Grove)

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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. ======== High Output Management (Andrew S. Grove)

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To make the most of this kind of meeting, we should aim to infuse it with regularity. In other words, the people attending should know how the meeting is run, what kinds of substantive matters are discussed, and what is to be accomplished. It should be designed to allow a manager to “batch” transactions, to use the same “production” set-up time and effort to take care of many similar managerial tasks. Moreover, given the regularity, you and the others attending can begin to forecast the time required for the kinds of work to be done. Hence, a “production control” system, as recorded on various calendars, can take shape, which means that a scheduled meeting will have minimum impact on other things people are doing. ======== High Output Management (Andrew S. Grove)

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a one-on-one is a meeting between a supervisor and a subordinate, and it is the principal way their business relationship is maintained. Its main purpose is mutual teaching and 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. ======== High Output Management (Andrew S. Grove)

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Shows the age and impact of this book, at least in tech these are ubiqutous ======== High Output Management (Andrew S. Grove)

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regularly scheduled one-on-ones are highly unusual outside of Intel. ======== High Output Management (Andrew S. Grove)

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Accordingly, you should have one-on-ones frequently (for example, once a week) with a subordinate who is inexperienced in a specific situation and less frequently (perhaps once every few weeks) with an experienced veteran. ======== High Output Management (Andrew S. Grove)

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I feel that a one-on-one should last an hour at a minimum. Anything less, in my experience, tends to make the subordinate confine himself to simple things that can be handled quickly. ======== High Output Management (Andrew S. Grove)

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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. Moreover, with an outline, the supervisor knows at the outset what is to be covered and can therefore help to set the pace of the meeting according to the “meatiness” of the items on the agenda. An outline also provides a framework for supporting information, which the subordinate should prepare in advance. The subordinate should then walk the supervisor through all the material. ======== High Output Management (Andrew S. Grove)

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What should be covered in a one-on-one? We can start with performance figures, indicators used by the subordinate, such as incoming order rates, production output, or project status. Emphasis should be on indicators that signal trouble. The meeting should also cover anything important that has happened since the last meeting: current hiring problems, people problems in general, organizational problems and future plans, and—very, very important—potential problems. Even when a problem isn’t tangible, even if it’s only an intuition that something’s wrong, a subordinate owes it to his supervisor to tell him, because it triggers a look into the organizational black box. The most important criterion governing matters to be talked about is that they be issues that preoccupy and nag the subordinate. These are often obscure and take time to surface, consider, and resolve. ======== High Output Management (Andrew S. Grove)

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“Ask one more question!” When the supervisor thinks the subordinate has said all he wants to about a subject, he should ask another question. He should try to keep the flow of thoughts coming by prompting the subordinate with queries until both feel satisfied that they have gotten to the bottom of a problem. ======== High Output Management (Andrew S. Grove)

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keep a running digital document capable of assigning tasks and tracking completion, or move into bug/etc tracking software ======== High Output Management (Andrew S. Grove)

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Exchanging notes after the meeting is a way to make sure each knows what the other committed himself to do. ======== High Output Management (Andrew S. Grove)

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What is the leverage of the one-on-one? Let’s say you have a one-on-one with your subordinate every two weeks, and it lasts one and a half hours. Ninety minutes of your time can enhance the quality of your subordinate’s work for two weeks, or for some eighty-plus hours, and also upgrade your understanding of what he’s doing. Clearly, one-on-ones can exert enormous leverage. This happens through the development of a common base of information and similar ways of doing and handling things between the supervisor and the subordinate. And this, as noted, is the only way in which efficient and effective delegation can take place. At the same time, the subordinate teaches the supervisor, and what is learned is absolutely essential if the supervisor is to make good decisions. During a recent one-on-one meeting, my subordinate, who is responsible for Intel’s sales organization, reviewed trend indicators of incoming orders. While I was vaguely familiar with them, he laid out a lot of specific information and convinced me that our business had stopped growing. Even though the summer is typically slow, he proved to me that what was going on was not just seasonal. After we pondered the data for a while and considered their relationship to other indicators of business activity in our industry, we came to the reluctant conclusion that business was in fact slowing down. This meant we should take a conservative approach to near-term investment—no small matter. By sharing his base of information with me, the two of us developed a congruent attitude, approach, and conclusion: conservatism in our expansion plans. He left the meeting having decided to scale back growth in his own area of responsibility. I left having decided to share what we had concluded with the business groups I supervised. Thus, this one-on-one produced substantial leverage: the Intel sales manager affected all the other managers who reported to me. ======== High Output Management (Andrew S. Grove)

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I also think that one-on-ones at home can help family life. As the father of two teenage daughters, I have found that the conversation in such a time together is very different in tone and kind from what we say to each other in other circumstances. The one-on-one makes each of us take the other seriously and allows subtle and complicated matters to come up for discussion. Obviously, no notes are taken, as father and daughter usually go out for dinner at a restaurant, but a family one-on-one very much resembles a business one-on-one. I strongly recommend both practices. ======== High Output Management (Andrew S. Grove)

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A staff meeting is one in which a supervisor and all of his subordinates participate, and which therefore presents an opportunity for interaction among peers. ======== High Output Management (Andrew S. Grove)

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Staff meetings also create opportunities for the supervisor to learn from the exchange and confrontation that often develops. In my own case, I get a much better understanding of an issue with which I am not familiar by listening to two people with opposing views discuss it than I do by listening to one side only. ======== High Output Management (Andrew S. Grove)

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What should be discussed at a staff meeting? Anything that affects more than two of the people present. If the meeting degenerates into a conversation between two people working on a problem affecting only them, the supervisor should break it off and move on to something else that will include more of the staff, while suggesting that the two continue their exchange later. ======== High Output Management (Andrew S. Grove)

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How structured should the meeting be? A free-for-all brainstorming session or controlled with a detailed agenda? It should be mostly controlled, with an agenda issued far enough in advance that the subordinates will have had the chance to prepare their thoughts for the meeting. But it should also include an “open session”—a designated period of time for the staff to bring up anything they want. This is when a varied set of housekeeping matters can be disposed of, as well as when important issues can be given a tentative first look. If it is justified, you can provide time for a more formal discussion about an issue in the scheduled portion of a future meeting. ======== High Output Management (Andrew S. Grove)

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What is the role of the supervisor in the staff meeting—a leader, observer, expediter, questioner, decision-maker? The answer, of course, is all of them. Please note that lecturer is not listed. A supervisor should never use staff meetings to pontificate, which is the surest way to undermine free discussion and hence the meeting’s basic purpose. ======== High Output Management (Andrew S. Grove)

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OPERATION REVIEWS This is the medium of interaction for people who don’t otherwise have much opportunity to deal with one another. The format here should include formal presentations in which managers describe their work to other managers who are not their immediate supervisors, and to peers in other parts of the company. The basic purpose of an operation review at Intel is to keep the teaching and learning going on between employees several organizational levels apart—people who don’t have one-on-ones or staff meetings with each other. This is important for both the junior and senior manager. The junior person will benefit from the comments, criticisms, and suggestions of the senior manager, who in turn will get a different feel for problems from people familiar with their details. Such meetings are also a source of motivation: managers making the presentations will want to leave a good impression on their supervisor’s supervisor and on their outside peers. Who are the players at an operation review? The organizing manager, the reviewing manager, the presenters, and the audience. Each of these players has a distinct role to play if the review is to be a useful one. The supervisor of the presenting managers—an Intel divisional marketing manager, let’s say—should organize the meeting. He should help the presenters decide what issues should be talked about and what should not, what should be emphasized, and what level of detail to go into. The supervisor should also be in charge of housekeeping (the meeting room, visual materials, invitations, and so on). Finally, he should be the timekeeper, scheduling the presentations and keeping them moving along. Though it’s hard to judge in advance the time needed for any discussion, the supervisor has presumably had more experience running meetings. In any case, he should pace the presenters using inconspicuous gestures, so that the manager talking doesn’t suddenly find himself out of time with only half his points covered. The reviewing manager is the senior supervisor at whom the review is aimed—like the general manager of an Intel division. He has a very important although more subtle role to play: he should ask questions, make comments, and in general impart the appropriate spirit to the meeting. He is the catalyst needed to provoke audience participation, and by his example he should encourage free expression. He should never preview the material, since that will keep him from reacting spontaneously. Because the senior supervisor is a role model for the junior managers present, he should take his role at the review extremely seriously. ======== High Output Management (Andrew S. Grove)

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The people presenting the reviews—a group of marketing supervisors, for example—should use visual aids ======== High Output Management (Andrew S. Grove)

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Mission-Oriented Meetings Unlike a process-oriented meeting, which is a regularly scheduled affair held to exchange knowledge and information, the mission-oriented meeting is usually held ad hoc and is designed to produce a specific output, frequently a decision. 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. When a mission-oriented meeting fails to accomplish the purpose for which it was called, the blame belongs to the chairman. Thus the chairman must have a clear understanding of the meeting’s objective—what needs to happen and what decision has to be made. 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? Then ask, is a meeting necessary? Or desirable? Or justifiable? Don’t call a meeting if all the answers aren’t yes. ======== High Output Management (Andrew S. Grove)

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even if you’re just an invited participant, you should ask yourself if the meeting—and your attendance—is desirable and justified. Tell the chairman—the person who invited you—if you do not feel it is. Determine the purpose of a meeting before committing your time and your company’s resources. Get it called off early, at a low-value-added stage, if a meeting makes no sense, and find a less costly way (a one-on-one meeting, a telephone call, a note) to pursue the matter. ======== High Output Management (Andrew S. Grove)

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a meeting called to make a specific decision is hard to keep moving if more than six or seven people attend. Eight people should be the absolute cutoff. Decision-making is not a spectator sport, because onlookers get in the way of what needs to be done. ======== High Output Management (Andrew S. Grove)

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send out an agenda that clearly states the purpose of the meeting, as well as what role everybody there is expected to play to get the desired output. ======== High Output Management (Andrew S. Grove)

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Once the meeting is over, the chairman must nail down exactly what happened by sending out minutes that summarize the discussion that occurred, the decision made, and the actions to be taken. And it’s very important that attendees get the minutes quickly, before they forget what happened. The minutes should also be as clear and as specific as possible, telling the reader what is to be done, who is to do it, and when. All this may seem like too much trouble, but if the meeting was worth calling in the first place, the work needed to produce the minutes is a small additional investment (an activity with high leverage) to ensure that the full benefit is obtained from what was done. ======== High Output Management (Andrew S. Grove)

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the real sign of malorganization is when people spend more than 25 percent of their time in ad hoc mission-oriented meetings. ======== High Output Management (Andrew S. Grove)

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Ideally, a manager should never have to call an ad hoc, mission-oriented meeting, because if all runs smoothly, everything is taken care of in regularly scheduled, process-oriented meetings. In practice, however, if all goes well, routine meetings will take care of maybe 80 percent of the problems and issues; the remaining 20 percent will still have to be dealt with in mission-oriented meetings. ======== High Output Management (Andrew S. Grove)

Your Highlight on page 97 | Location 1475-1490 | Added on Saturday, June 13, 2015 6:59:19 AM

In traditional industries, where the management chain of command was precisely defined, a person making a certain kind of decision was a person occupying a particular position in the organization chart. As the saying went, authority (to make decisions) went with responsibility (position in the management hierarchy). However, in businesses that mostly deal with information and know-how, a manager has to cope with a new phenomenon. Here a rapid divergence develops between power based on position and power based on knowledge, which occurs because the base of knowledge that constitutes the foundation of the business changes rapidly. What do I mean? When someone graduates from college with a technical education, at that time and for the next several years, that young person will be fully up-to-date in the technology of the time. Hence, he possesses a good deal of knowledge-based power in the organization that hired him. If he does well, he will be promoted to higher and higher positions, and as the years pass, his position power will grow but his intimate familiarity with current technology will fade. Put another way, even if today’s veteran manager was once an outstanding engineer, he is not now the technical expert he was when he joined the company. At Intel, anyway, we managers get a little more obsolete every day. So a business like ours has to employ a decision-making process unlike those used in more conventional industries. If Intel used people holding old-fashioned position power to make all its decisions, decisions would be made by people unfamiliar with the technology of the day. And in general, the faster the change in the know-how on which the business depends or the faster the change in customer preferences, the greater the divergence between knowledge and position power is likely to be. If your business depends on what it knows to survive and prosper, what decision-making mechanism should you use? The key to success is again the middle manager, who not only is a link in the chain of command but also can see to it that the holders of the two types of power mesh smoothly. ======== High Output Management (Andrew S. Grove)

Your Highlight on page 98 | Location 1491-1520 | Added on Saturday, June 13, 2015 7:03:42 AM

Illustrated on this page is an ideal model of decision-making in a know-how business. 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. This sounds obvious, but it’s not often the practice. Usually when a meeting gets heated, participants hang back, trying to sense the direction of things, saying nothing until they see what view is likely to prevail. They then throw their support behind that view to avoid being associated with a losing position. Bizarre as it may seem, some organizations actually encourage such behavior. Let me quote from a news account relating to the woes of a certain American automobile company: “In the meeting in which I 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. The ideal decision-making process. 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. Again, our tendency is to do just the opposite: when we know a decision is controversial we want to obscure matters to avoid an argument. But the argument is not avoided by our being mealy-mouthed, merely postponed. People who don’t like a decision will be a lot madder if they don’t get a prompt and straight story about it. 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. Many people have trouble supporting a decision with which they do not agree, but that they need to do so is simply inevitable. Even when we all have the same facts and we all have the interests of an organization in mind, we tend to have honest, strongly felt, real differences of opinion. No matter how much time we may spend trying to forge agreement, we just won’t be able to get it on many issues. But 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. All a manager can expect is that the commitment to support is honestly present, and this is something he can and must get from everyone. The ideal decision-making model seems an easy one to follow. Yet I have found that it comes easily to only two classes of professional employees—senior managers who have been in the company for a long time, who feel at home with the way things are done, and who identify with the values of the organization; and the new graduates that we hire, because they used the model as students doing college work. This is the way a team of students working on a laboratory experiment will resolve its differences, so for the young engineer the Intel model is a continuation of what he was used to. But for middle managers, the decision-making model is easier to accept intellectually than it is to practice. Why? Because they often have trouble expressing their views forcefully, a hard time making unpleasant or difficult decisions, and an even harder time with the idea that they are expected to support a decision with which they don’t agree. It may take a while, but the logic of the ideal scheme will eventually win everyone over. ======== High Output Management (Andrew S. Grove)

Your Highlight on page 101 | Location 1542-1543 | Added on Saturday, June 13, 2015 7:12:01 AM

managers working on the problem did nothing but go around in circles for some fifteen minutes, ======== High Output Management (Andrew S. Grove)

Your Highlight on page 101 | Location 1546-1554 | Added on Saturday, June 13, 2015 7:12:17 AM

We named this the peer-plus-one approach, and have used it since then to aid decision-making where we must. Peers tend to look for a more senior manager, even if he is not the most competent or knowledgeable person involved, to take over and shape a meeting. Why? Because most people are afraid to stick their necks out. This is how John, an Intel software engineer, sees things: One of the reasons why people are reluctant to come out with an opinion in the presence of their peers is the fear of going against the group by stating an opinion that is different from that of the group. Consequently, the group as a whole wanders around for a while, feeling each other out, waiting for a consensus to develop before anyone risks taking a position. If and when a group consensus emerges, one of the members will state it as a group opinion (“I think our position seems to be…”), not as a personal position. After a weak statement of the group position, if the rest of the mob buys in, the position becomes more solid and is restated more forcefully. ======== High Output Management (Andrew S. Grove)

Your Highlight on page 104 | Location 1580-1586 | Added on Saturday, June 13, 2015 6:52:08 PM

Sometimes no amount of discussion will produce a consensus, yet the time for a decision has clearly arrived. When this happens, the senior person (or “peer-plus-one”) who until now has guided, coached, and prodded the group along has no choice but to make a decision himself. 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. ======== High Output Management (Andrew S. Grove)

Your Highlight on page 104 | Location 1590-1591 | Added on Saturday, June 13, 2015 6:52:46 PM

don’t push for a decision prematurely. Make sure you have heard and considered the real issues rather than the superficial comments that often dominate the early part of a meeting. ======== High Output Management (Andrew S. Grove)

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decision-making has an output associated with it, which in this case is the decision itself. ======== High Output Management (Andrew S. Grove)

Your Highlight on page 105 | Location 1597-1602 | Added on Sunday, June 14, 2015 12:04:14 AM

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? ======== High Output Management (Andrew S. Grove)

Your Highlight on page 107 | Location 1634-1634 | Added on Sunday, June 14, 2015 12:07:17 AM

Employing consistent ways by which decisions are to be made has value beyond simply expediting the decision-making itself. ======== High Output Management (Andrew S. Grove)

Your Highlight on page 107 | Location 1638-1640 | Added on Sunday, June 14, 2015 12:07:29 AM

Politics and manipulation or even their appearance should be avoided at all costs. And I 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. ======== High Output Management (Andrew S. Grove)

Your Highlight on page 107 | Location 1640-1644 | Added on Sunday, June 14, 2015 12:08:05 AM

If the final word has to be dramatically different from the expectations of the people who participated in the decision-making process (had I chosen, for example, to cancel the Philippine plant project altogether), make your announcement but don’t just walk away from the issue. People need time to adjust, rationalize, and in general put their heads back together. Adjourn, reconvene the meeting after people have had a chance to recover, and solicit their views of the decision at that time. This will help everybody accept and learn to live with the unexpected. ======== High Output Management (Andrew S. Grove)

Your Highlight on page 108 | Location 1644-1645 | Added on Sunday, June 14, 2015 12:08:18 AM

If good decision-making appears complicated, that’s because it is and has been for a long time. ======== High Output Management (Andrew S. Grove)

Your Highlight on page 109 | Location 1662-1664 | Added on Sunday, June 14, 2015 12:10:02 AM

Our job was to match the factory’s output at a given time with the orders for it. If the projected output did not match the projected market demand, either we made additional production starts or we reduced them to eliminate the excess. ======== High Output Management (Andrew S. Grove)

Your Highlight on page 109 | Location 1664-1670 | Added on Sunday, June 14, 2015 12:10:33 AM

How one plans at the factory can then be summarized as follows: step 1, determine the market demand for product; step 2, establish what the factory will produce if no adjustment is made; and step 3, reconcile the projected factory output with the projected market demand by adjusting the production schedule. 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? ======== High Output Management (Andrew S. Grove)

Your Highlight on page 109 | Location 1672-1673 | Added on Sunday, June 14, 2015 12:11:17 AM

If you look at your own group within an organization as if it were a stand-alone company, you see that your environment is made up of other such groups that directly influence what you do. ======== High Output Management (Andrew S. Grove)

Your Highlight on page 110 | Location 1676-1689 | Added on Sunday, June 14, 2015 12:12:25 AM

What should you look for when you examine your environment? You should attempt to determine your customers’ expectations and their perception of your performance. You should keep abreast of technological developments like electronic mail and other alternative ways of doing your job. You should evaluate the performance of your vendors. You should also evaluate the performance of other groups in the organization to which you belong. Does some other group (like the traffic department) affect how well you can do your work? Can that group meet your needs? Once you have established what constitutes your environment, you need to examine it in two time frames—now, and sometime in the future, let’s say in a year. The questions then become: What do my customers want from me now? Am I satisfying them? What will they expect from me one year from now? You need to focus on the difference between what your environment demands from you now and what you expect it to demand from you a year from now. Such a difference analysis is crucial, because if your current activities satisfy the current demands placed on your business, anything more and new should be undertaken to match this difference. How you react to this difference is in fact the key outcome of the planning process. Should you at this stage consider what practical steps you can actually take to handle matters? No, that will just confuse the issue. What would happen to a factory, for instance, if the marketing organization adjusted its demand forecast on the basis of its own assessment of the manufacturing unit’s ability to deliver? If marketing knew they could sell 100 widgets per month but thought that manufacturing could only deliver ten, and so submitted a demand forecast of ten units, manufacturing would never tool up to satisfy the real demand. ======== High Output Management (Andrew S. Grove)

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determine your present status. You do this by listing your present capabilities and the projects you have in the works. As you account for them, be sure to use the same terms, or “currency,” in which you stated demand. For instance, if your demand is listed in terms of completed product designs, your work-in-process should be listed as partially completed product designs. You also need to look at timing; namely, when will these projects come out of your “pipeline”? You must ask yourself, will every project now moving through be completed? Chances are, no, some will get scrapped or aborted, and you have to factor this into your forecasted output. ======== High Output Management (Andrew S. Grove)

Your Highlight on page 111 | Location 1696-1696 | Added on Sunday, June 14, 2015 12:13:20 AM

while it is impossible to be precise in every case, it is prudent to factor in some percentage of loss for managerial projects as well. ======== High Output Management (Andrew S. Grove)

Your Highlight on page 111 | Location 1699-1701 | Added on Sunday, June 14, 2015 12:13:52 AM

What do you need to do to close the gap? The second is, What can you do to close the gap? Consider each question separately, and then decide what you actually will do, evaluating what effect your actions will have on narrowing the gap, and when. The set of actions you decide upon is your strategy. ======== High Output Management (Andrew S. Grove)

Your Note on page 111 | Location 1700 | Added on Sunday, June 14, 2015 12:14:55 AM

Backcast ======== High Output Management (Andrew S. Grove)

Your Highlight on page 112 | Location 1703-1705 | Added on Sunday, June 14, 2015 12:16:19 AM

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. ======== High Output Management (Andrew S. Grove)

Your Highlight on page 114 | Location 1744-1744 | Added on Sunday, June 14, 2015 12:23:31 AM

today’s gap represents a failure of planning sometime in the past. ======== High Output Management (Andrew S. Grove)

Your Highlight on page 114 | Location 1742-1743 | Added on Sunday, June 14, 2015 12:23:41 AM

their planning produced tasks that had to be performed now in order to affect future events. ======== High Output Management (Andrew S. Grove)

Your Highlight on page 114 | Location 1746-1747 | Added on Sunday, June 14, 2015 12:23:55 AM

What do I have to do today to solve—or better, avoid—tomorrow’s problem? ======== High Output Management (Andrew S. Grove)

Your Highlight on page 115 | Location 1751-1757 | Added on Sunday, June 14, 2015 12:25:22 AM

we put ourselves through an annual strategic long-range planning effort in which we examine our future five years off. But what is really being influenced here? It is the next year—and only the next year. We will have another chance to replan the second of the five years in the next year’s long-range planning meeting, when that year will become the first year of the five. So, keep in mind that you implement only that portion of a plan that lies within the time window between now and the next time you go through the exercise. Everything else you can look at again. We should also be careful not to plan too frequently, allowing ourselves time to judge the impact of the decisions we made and to determine whether our decisions were on the right track or not. In other words, we need the feedback that will be indispensable to our planning the next time around. ======== High Output Management (Andrew S. Grove)

Your Highlight on page 115 | Location 1758-1761 | Added on Sunday, June 14, 2015 12:25:47 AM

the idea that planners can be people apart from those implementing the plan simply does not work. Planning cannot be made a separate career but is instead a key managerial activity, one with enormous leverage through its impact on the future performance of an organization. But this leverage can only be realized through a marriage, and a good collaborative one at that, between planning and implementation. ======== High Output Management (Andrew S. Grove)

Your Highlight on page 115 | Location 1761-1762 | Added on Sunday, June 14, 2015 12:26:00 AM

remember that by saying “yes”—to projects, a course of action, or whatever—you are implicitly saying “no” to something else. ======== High Output Management (Andrew S. Grove)

Your Highlight on page 116 | Location 1769-1772 | Added on Sunday, June 14, 2015 12:26:48 AM

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.) ======== High Output Management (Andrew S. Grove)

Your Highlight on page 122 | Location 1870-1873 | Added on Sunday, June 14, 2015 4:50:50 AM

Earlier, we established the fact that the game of management is a team game: a manager’s output is the output of the organizations under his supervision or influence. We now discover that management is not just a team game, it is a game in which we have to fashion a team of teams, where the various individual teams exist in some suitable and mutually supportive relationship with each other. ======== High Output Management (Andrew S. Grove)

Your Highlight on page 123 | Location 1879-1880 | Added on Sunday, June 14, 2015 4:52:48 AM

Though most are mixed, organizations can come in two extreme forms: in totally mission-oriented form or in totally functional form. ======== High Output Management (Andrew S. Grove)

Your Highlight on page 123 | Location 1881-1882 | Added on Sunday, June 14, 2015 4:53:09 AM

In the mission-oriented organization (a), which is completely decentralized, each individual business unit pursues what it does—its mission—with little tie-in to other units. ======== High Output Management (Andrew S. Grove)

Your Highlight on page 124 | Location 1887-1887 | Added on Sunday, June 14, 2015 4:53:17 AM

At the other extreme is the totally functional organization (b), which is completely centralized. ======== High Output Management (Andrew S. Grove)

Your Highlight on page 124 | Location 1892-1895 | Added on Sunday, June 14, 2015 4:53:41 AM

we look for a compromise between the two extremes. In fact, the search for the appropriate compromise has preoccupied managers for a long, long time. 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. ======== High Output Management (Andrew S. Grove)

Your Highlight on page 126 | Location 1924-1928 | Added on Sunday, June 14, 2015 6:11:16 AM

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. ======== High Output Management (Andrew S. Grove)

Your Highlight on page 126 | Location 1930-1931 | Added on Sunday, June 14, 2015 6:11:36 AM

But no matter how many times we have examined possible organizational forms, we have always concluded that there is simply no alternative to the hybrid organizational structure. ======== High Output Management (Andrew S. Grove)

Your Highlight on page 132 | Location 2024-2033 | Added on Sunday, June 14, 2015 6:27:44 AM

Consider the following scenario, which could be taken from an ordinary day at Intel. Our manufacturing manager is sitting in the cafeteria having a cup of coffee, and the manufacturing manager from another division (whose boss, the general manager, has a finance background) comes over. They start chatting about what’s going on in their respective divisions and begin to realize that they have a number of technical problems in common. Applying the theory that two heads are better than one, they decide to meet a bit more often. Eventually the meetings become regularly scheduled and manufacturing managers from other divisions join the two to exchange views about problems they share. Pretty soon a committee or a council made up of a group of peers comes into existence to tackle issues common to all. In short, they have found a way to deal with those technical issues that their bosses, the general managers, can’t help them with. In effect, they now have supervision that a general manager competent in manufacturing could have given them, but that supervision is being exercised by a peer group. The manufacturing managers report to two supervisors: to this group and to their respective general managers, ======== High Output Management (Andrew S. Grove)

Your Highlight on page 134 | Location 2052-2054 | Added on Sunday, June 14, 2015 6:28:51 AM

To make hybrid organizations work, you need a way to coordinate the mission-oriented units and the functional groups so that the resources of the latter are allocated and delivered to meet the needs of the former. ======== High Output Management (Andrew S. Grove)

Your Highlight on page 141 | Location 2150-2152 | Added on Sunday, June 14, 2015 6:53:22 AM

our behavior in a work environment can be controlled by three invisible and pervasive means. These are: • free-market forces • contractual obligations • cultural values ======== High Output Management (Andrew S. Grove)

Your Highlight on page 141 | Location 2153-2155 | Added on Sunday, June 14, 2015 6:53:35 AM

When you bought your tires, your actions were governed by free-market forces, which are based on price: goods and services are being exchanged between two entities (individuals, organizational units, or corporations), with each seeking only to enrich himself or itself. ======== High Output Management (Andrew S. Grove)

Your Highlight on page 143 | Location 2189-2194 | Added on Sunday, June 14, 2015 6:56:00 AM

You don’t need management to supervise the workings of free-market forces; no one supervises sales made at a flea market. In a contractual obligation, management has a role in setting and modifying the rules, monitoring adherence to them, and evaluating and improving performance. As for cultural values, management has to develop and nurture the common set of values, objectives, and methods essential for the existence of trust. How do we do that? One way is by articulation, by spelling out these values, objectives, and methods. The other, even more important, way is by example. If our behavior at work will be regarded as in line with the values we profess, that fosters the development of a group culture. ======== High Output Management (Andrew S. Grove)

Your Highlight on page 144 | Location 2200-2200 | Added on Sunday, June 14, 2015 6:58:04 AM

complexity, uncertainty, and ambiguity, which we’ll call the CUA factor. ======== High Output Management (Andrew S. Grove)

Your Highlight on page 145 | Location 2209-2215 | Added on Sunday, June 14, 2015 6:58:20 AM

Let’s now conceive a simple chart with four quadrants, shown above. The individual motivation can run from self-interest to group-interest, and the CUA factor of a working environment can vary from low to high. Now look for the best mode of control for each quadrant. When self-interest is high and the CUA factor is low, the most appropriate is the market mode, which governed our tire purchase. As individual motivation moves toward group interest, the contractual mode becomes appropriate, which governed our stopping for a red light. When group-interest orientation and the CUA factor are both high, the cultural values mode becomes the best choice, which explains to us why we tried to help at the scene of the accident. And finally, when the CUA factor is high and individual motivation is based on self-interest, no mode of control will work well. This situation, like every man for himself on a sinking ship, can only produce chaos. ======== High Output Management (Andrew S. Grove)

Your Highlight on page 145 | Location 2218-2218 | Added on Sunday, June 14, 2015 6:58:46 AM

if he is on a boat and wants to get ahead, it is better for him to help row than to run to the bow. ======== High Output Management (Andrew S. Grove)

Your Highlight on page 145 | Location 2215-2217 | Added on Sunday, June 14, 2015 6:58:57 AM

Your Highlight on page 145 | Location 2215-2220 | Added on Sunday, June 14, 2015 6:59:47 AM

Let’s apply our model to the work of a new employee. What is his motivation? It is very much based on self-interest. So you should give him a clearly structured job with a low CUA factor. If he does well, he will begin to feel more at home, worry less about himself, and start to care more about his team. He learns that if he is on a boat and wants to get ahead, it is better for him to help row than to run to the bow. The employee can then be promoted into a more complex, uncertain, ambiguous job. (These tend to pay more.) As time passes, he will continue to gain an increasing amount of shared experience with other members of the organization and will be ready to tackle more and more complex, ambiguous, and uncertain tasks. ======== High Output Management (Andrew S. Grove)

Your Highlight on page 148 | Location 2262-2264 | Added on Sunday, June 14, 2015 7:02:59 AM

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. ======== High Output Management (Andrew S. Grove)

Your Highlight on page 148 | Location 2264-2265 | Added on Sunday, June 14, 2015 7:03:17 AM

To determine which, we can employ a simple mental test: if the person’s life depended on doing the work, could he do it? If the answer is yes, that person is not motivated; if the answer is no, he is not capable. ======== High Output Management (Andrew S. Grove)

Your Highlight on page 148 | Location 2268-2268 | Added on Sunday, June 14, 2015 7:03:36 AM

a manager has two ways to tackle the issue: through training and motivation. ======== High Output Management (Andrew S. Grove)

Your Highlight on page 148 | Location 2267-2267 | Added on Sunday, June 14, 2015 7:03:42 AM

The single most important task of a manager is to elicit peak performance from his subordinates. ======== High Output Management (Andrew S. Grove)

Your Highlight on page 149 | Location 2273-2273 | Added on Sunday, June 14, 2015 7:04:22 AM

motivation has to come from within somebody. ======== High Output Management (Andrew S. Grove)

Your Highlight on page 149 | Location 2273-2274 | Added on Sunday, June 14, 2015 7:04:33 AM

Accordingly, all a manager can do is create an environment in which motivated people can flourish. ======== High Output Management (Andrew S. Grove)

Your Highlight on page 149 | Location 2284-2285 | Added on Sunday, June 14, 2015 7:05:25 AM

In other words, fear won’t work as well with computer architects as with galley slaves; hence, new approaches to motivation are needed. ======== High Output Management (Andrew S. Grove)

Your Highlight on page 150 | Location 2289-2289 | Added on Sunday, June 14, 2015 7:06:22 AM

if we are to create and maintain a high degree of motivation, we must keep some needs unsatisfied at all times. ======== High Output Management (Andrew S. Grove)

Your Highlight on page 153 | Location 2341-2343 | Added on Sunday, June 14, 2015 7:11:26 AM

Once someone’s source of motivation is self-actualization, his drive to perform has no limit. Thus, its most important characteristic is that unlike other sources of motivation, which extinguish themselves after the needs are fulfilled, self-actualization continues to motivate people to ever higher levels of performance. ======== High Output Management (Andrew S. Grove)

Your Highlight on page 153 | Location 2344-2359 | Added on Sunday, June 14, 2015 7:13:14 AM

competence-driven or achievement-driven. The former concerns itself with job or task mastery. A virtuoso violinist who continues to practice day after day is obviously moved by something other than a need for esteem and recognition. He works to sharpen his own skill, trying to do a little bit better this time than the time before, just as a teenager on a skateboard practices the same trick over and over again. The same teenager may not sit still for ten minutes to do homework, but on a skateboard he is relentless, driven by the self-actualization need, a need to get better that has no limit. The achievement-driven path to self-actualization is not quite like this. Some people—not the majority—are moved by an abstract need to achieve in all that they do. A psychology lab experiment illustrated the behavior of such people. Some volunteers were put into a room in which pegs were set at various places on the floor. Each person was given some rings but not instructed what to do with them. People eventually started to toss the rings onto the pegs. Some casually tossed the rings at faraway pegs; others stood over the pegs and dropped the rings down onto them. Still others walked just far enough away from the pegs so that to toss a ring onto a peg constituted a challenge. These people worked at the boundary of their capability. Researchers classified the three types of behavior. The first group, termed gamblers, took high risks but exerted no influence on the outcome of events. The second group, termed conservatives, were people who took very little risk. The third group, termed achievers, had to test the limits of what they could do, and with no prompting demonstrated the point of the experiment: namely, that some people simply must test themselves. By challenging themselves, these people were likely to miss a peg several times, but when they began to ring the peg consistently, they gained satisfaction and a sense of achievement. The point is that both competence- and achievement-oriented people spontaneously try to test the outer limits of their abilities. ======== High Output Management (Andrew S. Grove)

Your Highlight on page 154 | Location 2360-2363 | Added on Sunday, June 14, 2015 7:14:15 AM

objectives should be set at a point high enough so that even if the individual (or organization) pushes himself hard, he will still only have a fifty-fifty chance of making them. Output will tend to be greater when everybody strives for a level of achievement beyond his immediate grasp, even though trying means failure half the time. Such goal-setting is extremely important if what you want is peak performance from yourself and your subordinates. ======== High Output Management (Andrew S. Grove)

Your Note on page 154 | Location 2361 | Added on Sunday, June 14, 2015 7:14:33 AM

70% okr ======== High Output Management (Andrew S. Grove)

Your Highlight on page 155 | Location 2363-2368 | Added on Sunday, June 14, 2015 7:15:02 AM

if we want to cultivate achievement-driven motivation, we need to create an environment that values and emphasizes output. My first job was with a research and development laboratory, where a lot of people were very highly motivated but tended to be knowledge-centered. They were driven to know more, but not necessarily to know more in order to produce concrete results. Consequently, relatively little was actually achieved. The value system at Intel is completely the reverse. The Ph.D. in computer science who knows an answer in the abstract, yet does not apply it to create some tangible output, gets little recognition, but a junior engineer who produces results is highly valued and esteemed. And that is how it should be. ======== High Output Management (Andrew S. Grove)

Your Highlight on page 156 | Location 2378-2379 | Added on Sunday, June 14, 2015 7:17:39 AM

Money in the physiological- and security-driven modes only motivates until the need is satisfied, but money as a measure of achievement will motivate without limit. ======== High Output Management (Andrew S. Grove)

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If the absolute sum of a raise in salary an individual receives is important to him, he is working mostly within the physiological or safety modes. If, however, what matters to him is how his raise stacks up against what other people got, he is motivated by esteem/recognition or self-actualization, because in this case money is clearly a measure. ======== High Output Management (Andrew S. Grove)

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Once in the self-actualization mode, a person needs measures to gauge his progress and achievement. The most important type of measure is feedback on his performance. For the self-actualized person driven to improve his competence, the feedback mechanism lies within that individual himself. ======== High Output Management (Andrew S. Grove)

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Accordingly, if the possibility for improvement does not exist, the desire to keep practicing vanishes. ======== High Output Management (Andrew S. Grove)

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You cannot stay in the self-actualized mode if you’re always worried about failure. ======== High Output Management (Andrew S. Grove)

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We’ve studied motivation to try to understand what makes people want to work so that as managers we can elicit peak performance from our subordinates—their “personal best.” Of course, what we are really after is the performance of the organization as a whole, but that depends on how skilled and motivated the people within it are. Thus, our role as managers is, first, to train the individuals (to move them along the horizontal axis shown in the illustration on this page), and, second, to bring them to the point where self-actualization motivates them, because once there, their motivation will be self-sustaining and limitless. Is there a systematic way to lead people to self-actualization? For an answer, let’s ask another question. Why does a person who is not terribly interested in his work at the office stretch himself to the limit running a marathon? What makes him run? He is trying to beat other people or the stopwatch. This is a simple model of self-actualization, wherein people will exert themselves to previously undreamed heights, forcing themselves to run farther or faster, while their efforts fill barrels with sweat. They will do this not for money, but just to beat the distance, the clock, or other people. ======== High Output Management (Andrew S. Grove)

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For years the performance of the Intel facilities maintenance group, which is responsible for keeping our buildings clean and neat, was mediocre, and no amount of pressure or inducement seemed to do any good. We then initiated a program in which each building’s upkeep was periodically scored by a resident senior manager, dubbed a “building czar.” The score was then compared with those given the other buildings. The condition of all of them dramatically improved almost immediately. Nothing else was done; people did not get more money or other rewards. What they did get was a racetrack, an arena of competition. If your work is facilities maintenance, having your building receive the top score is a powerful source of motivation. ======== High Output Management (Andrew S. Grove)

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Perhapz not. A score implies performance is legible, and therefore subpar performance can be punished. There is an imlicit threat in rankings. ======== High Output Management (Andrew S. Grove)

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Is there a single best management style, one approach ======== High Output Management (Andrew S. Grove)

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Is there a single best management style, one approach that will work better than all others? ======== High Output Management (Andrew S. Grove)

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Imagine how productive our country would become if managers could endow all work with the characteristics of competitive sports. To try to do this, we must first overcome cultural prejudice. Our society respects someone’s throwing himself into sports, but anybody who works very long hours is regarded as sick, a workaholic. So the prejudices of the majority say that sports are good and fun, but work is drudgery, a necessary evil, and in no way a source of pleasure. ======== High Output Management (Andrew S. Grove)

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It was hard to escape the conclusion that no optimal management style existed. My own observations bear this out. ======== High Output Management (Andrew S. Grove)

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high output is associated with particular combinations of certain managers and certain groups of workers. ======== High Output Management (Andrew S. Grove)

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This also suggests that a given managerial approach is not equally effective under all conditions. ======== High Output Management (Andrew S. Grove)

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Some researchers in this field argue that there is a fundamental variable that tells you what the best management style is in a particular situation. That variable is the task-relevant maturity (TRM) of the subordinates, which is a combination of the degree of their achievement orientation and readiness to take responsibility, as well as their education, training, and experience. Moreover, all this is very specific to the task at hand, and it is entirely possible for a person or a group of people to have a TRM that is high in one job but low in another. ======== High Output Management (Andrew S. Grove)

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The conclusion is that varying management styles are needed as task-relevant maturity varies. Specifically, when the TRM is low, the most effective approach is one that offers very precise and detailed instructions, wherein the supervisor tells the subordinate what needs to be done, when, and how: in other words, a highly structured approach. As the TRM of the subordinate grows, the most effective style moves from the structured to one more given to communication, emotional support, and encouragement, in which the manager pays more attention to the subordinate as an individual than to the task at hand. As the TRM becomes even greater, the effective management style changes again. Here the manager’s involvement should be kept to a minimum, and should primarily consist of making sure that the objectives toward which the subordinate is working are mutually agreed upon. But regardless of what the TRM may be, the manager should always monitor a subordinate’s work closely enough to avoid surprises. The presence or absence of monitoring, as we’ve said before, is the difference between a supervisor’s delegating a task and abdicating it. ======== High Output Management (Andrew S. Grove)

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A word of caution is in order: do not make a value judgment and consider a structured management style less worthy than a communication-oriented one. What is “nice” or “not nice” should have no place in how you think or what you do. Remember, we are after what is most effective. ======== High Output Management (Andrew S. Grove)

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TASK-RELEVANT MATURITY OF SUBORDINATE CHARACTERISTICS OF THE EFFECTIVE MANAGEMENT STYLE low Structured; task-oriented; tell “what,” “when,” “how” medium Individual-oriented; emphasis on two-way communication, support, mutual reasoning high Involvement by manager minimal: establishing objectives and monitoring The fundamental variable that determines the effective management style is the task-relevant maturity of the subordinate.

======== High Output Management (Andrew S. Grove)

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As supervisors, we should try to raise the task-relevant maturity of our subordinates as rapidly as possible for obvious pragmatic reasons. The appropriate management style for an employee with high TRM takes less time than detailed, structured, supervision requires. Moreover, once operational values are learned and TRM is high enough, the supervisor can delegate tasks to the subordinate, thus increasing his managerial leverage. Finally, at the highest levels of TRM, the subordinate’s training is presumably complete, and motivation is likely to come from within, from self-actualization, which is the most powerful source of energy and effort a manager can harness. ======== High Output Management (Andrew S. Grove)

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Though monitoring is on paper a manager’s most productive approach, we have to work our way up to it in the real world. Even if we achieve it, if things suddenly change we have to revert quickly to the what-when-how mode. ======== High Output Management (Andrew S. Grove)

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That mode is one that we don’t think an enlightened manager should use. As a result, we often don’t take it up until it is too late and events overwhelm us. We managers must learn to fight such prejudices and regard any management mode not as either good or bad but rather as effective or not effective, given the TRM of our subordinates within a specific working environment. ======== High Output Management (Andrew S. Grove)

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A test might be to imagine yourself delivering a tough performance review to your friend. Do you cringe at the thought? If so, don’t make friends at work. If your stomach remains unaffected, you are likely to be someone whose personal relationships will strengthen work relationships. ======== High Output Management (Andrew S. Grove)

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giving such reviews is the single most important form of task-relevant feedback ======== High Output Management (Andrew S. Grove)

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giving such reviews is the single most important form of task-relevant feedback we as supervisors can provide. It is how we assess our subordinates’ level of performance and how we deliver that assessment to them individually. It is also how we allocate the rewards—promotions, dollars, stock options, or whatever we may use. As we saw earlier, the review will influence a subordinate’s performance—positively or negatively—for a long time, which makes the appraisal one of the manager’s highest-leverage activities. ======== High Output Management (Andrew S. Grove)

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to improve the subordinate’s performance. ======== High Output Management (Andrew S. Grove)

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first, the skill level of the subordinate, to determine what skills are missing and to find ways to remedy that lack; and second, to intensify the subordinate’s motivation in order to get him on a higher performance curve for the same skill level (see the illustration on this page). ======== High Output Management (Andrew S. Grove)

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What preparation have we had to do the job properly? About the only thing I can think of is that as subordinates we’ve been on the receiving end. But in general our society values avoiding confrontation. Even the word “argument” is frowned upon, something I learned many years ago when I first came to this country from Hungary. In Hungarian, the word “argument” is frequently used to describe a difference of opinion. When I began to learn English and used the word “argument,” I would be corrected, as people would say, “Oh no, you don’t mean ‘argument,’ you mean ‘debate,’ " or “you mean ‘discussion.’ " Among friends and peers you are not supposed to discuss politics, religion, or anything that might possibly produce a difference of opinion and a conflict. Football scores, gardening, and the weather are okay. We are taught that the well-mannered skirt potentially emotional issues. The point is, delivering a good performance review is really a unique act given both our cultural background and our professional training. ======== High Output Management (Andrew S. Grove)

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They should be part of managerial practice in organizations of any size and kind, ======== High Output Management (Andrew S. Grove)

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Anybody who supervises professionals, therefore, walks a tightrope: he needs to be objective, but must not be afraid of using his judgment, even though judgment is by definition subjective. ======== High Output Management (Andrew S. Grove)

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a supervisor should clarify in his own mind in advance what it is that he expects from a subordinate and then attempt to judge whether he performed to expectations. The biggest problem with most reviews is that we don’t usually define what it is we want from our subordinates, and, as noted earlier, if we don’t know what we want, we are surely not going to get it. ======== High Output Management (Andrew S. Grove)

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we can characterize performance by output measures and internal measures. The first represent the output of the black box, and include such things as completing designs, meeting sales quotas, or increasing the yield in a production process—things we can and should plot on charts. The internal measures take into account activities that go on inside the black box: whatever is being done to create output for the period under review and also that which sets the stage for the output of future periods. ======== High Output Management (Andrew S. Grove)

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the proper weighting could be 50/50, 90/10, or 10/90 and could even shift from one month to the next. ======== High Output Management (Andrew S. Grove)

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weighing long-term-oriented against short-term-oriented performance. ======== High Output Management (Andrew S. Grove)

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A way to help weigh questions like this is the idea of “present value” used in finance: how much will the future-oriented activity pay back over time? And how much is that worth today? ======== High Output Management (Andrew S. Grove)

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time factor to consider. ======== High Output Management (Andrew S. Grove)

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The subordinate’s output during the review period may have all, some, or nothing to do with his activities during the same period. Accordingly, the supervisor should look at the time offset between the activity of the subordinate and the output that results from that activity. ======== High Output Management (Andrew S. Grove)

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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. You need to determine what that is. You must ask: Is he doing anything with his group? Is he hiring new people? Is he training the people he has, and doing other things that are likely to improve the output of the team in the future? The most difficult issues in determining a professional’s performance will be based on asking questions and making judgments of this sort. ======== High Output Management (Andrew S. Grove)

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At all times you should force yourself to assess performance, not potential. ======== High Output Management (Andrew S. Grove)

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the performance rating of a manager cannot be higher than the one we would accord to his organization! ======== High Output Management (Andrew S. Grove)

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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. ======== High Output Management (Andrew S. Grove)

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Level, listen, and leave yourself out. ======== High Output Management (Andrew S. Grove)

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You must level with your subordinate—the credibility and integrity of the entire system depend on your being totally frank. ======== High Output Management (Andrew S. Grove)

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watch the person you are talking to. ======== High Output Management (Andrew S. Grove)

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How then can you be sure you are being truly heard? ======== High Output Management (Andrew S. Grove)

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What you must do is employ all of your sensory capabilities. ======== High Output Management (Andrew S. Grove)

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listening: employing your entire arsenal of sensory capabilities to make certain your points are being properly interpreted by your subordinate’s brain. ======== High Output Management (Andrew S. Grove)

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The third L is “leave yourself out.” It is very important for you to understand that the performance review is about and for your subordinate. So your own insecurities, anxieties, guilt, or whatever should be kept out of it. At issue are the subordinate’s problems, not the supervisor’s, and it is the subordinate’s day in court. Anyone called upon to assess the performance of another person is likely to have strong emotions before and during the review, just as actors have stage fright. You should work to control these emotions so that they don’t affect your task, though they will well up no matter how many reviews you’ve given. ======== High Output Management (Andrew S. Grove)

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Common problems here include superficiality, clichés, and laundry lists of unrelated observations. All of these will leave your subordinate bewildered and will hardly improve his future performance, the review’s basic purpose. ======== High Output Management (Andrew S. Grove)

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The key is to recognize that your subordinate, like most people, has only a finite capacity to deal with facts, issues, and suggestions. You may possess seven truths about his performance, but if his capacity is only four, at best you’ll waste your breath on the other three. ======== High Output Management (Andrew S. Grove)

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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. So here less may very well be more. ======== High Output Management (Andrew S. Grove)

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How can you target a few key areas? First, consider as many aspects of your subordinate’s performance as possible. You should scan material such as progress reports, performance against quarterly objectives, and one-on-one meeting notes. Then sit down with a blank piece of paper. As you consider your subordinate’s performance, write everything down on the paper. Do not edit in your head. Get everything down, knowing that doing so doesn’t commit you to do anything. Things major, minor, and trivial can be included in no particular order. When you have run out of items, you can put all of your supporting documentation away. Now, from your worksheet, look for relationships between the various items listed. You will probably begin to notice that certain items are different manifestations of the same phenomenon, and that there may be some indications why a certain strength or weakness exists. When you find such relationships, you can start calling them “messages” for the subordinate. At this point, your worksheet might look something like that shown on the next page. Now, again from your worksheet, begin to draw conclusions and specific examples to support them. Once your list of messages has been compiled, ask yourself if your subordinate will be able to remember all of the messages you have chosen to deliver. If not, you must delete the less important ones. Remember, what you couldn’t include in this review, you can probably take up in the next one. ======== High Output Management (Andrew S. Grove)

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Preferably, a review should not contain any surprises, but if you uncover ======== High Output Management (Andrew S. Grove)

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A poor performer has a strong tendency to ignore his problem. Here a manager needs facts and examples so that he can demonstrate its reality. Progress of some sort is made when the subordinate actively denies the existence of a problem rather than ignoring it passively, as before. Evidence can overcome resistance here as well, and we enter the third stage, when the subordinate admits that there is a problem, but maintains it is not his problem. Instead he will blame others, a standard defense mechanism. Using this defense, he can continue to avoid the responsibility and burden of remedying the situation. These three steps usually follow one another in fairly rapid succession. But things tend to get stuck at the blame-others stage. If your subordinate does have a problem, there’s no way of resolving it if he continues to blame it on others. He has to take the biggest step: namely assuming responsibility. He has to say not only that there is a problem but that it is his problem. This is fateful, because it means work: “If it is my problem, I have to do something about it. If I have to do something, it is likely to be unpleasant and will definitely mean a lot of work on my part.” Once responsibility has been assumed, however, finding the solution is relatively easy. This is because the 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. ======== High Output Management (Andrew S. Grove)

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It is the reviewer’s job to get the subordinate to move through all of the stages to that of assuming responsibility, though finding the solution should be a shared task. The supervisor should keep track of what stage things are in. If the supervisor wants to go on to find the solution when the subordinate is still denying or blaming others, nothing can happen. ======== High Output Management (Andrew S. Grove)

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I feel very strongly that any outcome that includes a commitment to action is acceptable. ======== High Output Management (Andrew S. Grove)

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up to a point you should try to get your subordinate to agree with you. But if you can’t, accept his commitment to change and go on. Don’t confuse emotional comfort with operational need. To make things work, people do not need to side with you; you only need them to commit themselves to pursue a course of action that has been decided upon. There seems to be something not quite nice about expecting a person to walk down a path he’d rather not be on. But on the job we are after a person’s performance, not our psychological comfort. ======== High Output Management (Andrew S. Grove)

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If it becomes clear that you are not going to get your subordinate past the blame-others stage, you will have to assume the formal role of the supervisor, endowed with position power, and say, “This is what I, as your boss, am instructing you to do. I understand that you do not see it my way. You may be right or I may be right. But I am not only empowered, I am required by the organization for which we both work to give you instructions, and this is what I want you to do…” And proceed to secure your subordinate’s commitment to the course of action you want and thereafter monitor his performance against that commitment. ======== High Output Management (Andrew S. Grove)

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It seems that for an achiever the supervisor’s effort goes into determining and justifying the judgment of the superior performance, while giving little attention to how he could do even better. But for a poor performer, the supervisor tends to concentrate heavily on ways he can improve performance, providing detailed and elaborate “corrective action programs,” step-by-step affairs meant to ensure that the marginal employee can pull himself up to meet minimum requirements. ======== High Output Management (Andrew S. Grove)

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concentrating on the stars is a high-leverage activity: if they get better, the impact on group output is very great indeed. ======== High Output Management (Andrew S. Grove)

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there is always room for improvement. ======== High Output Management (Andrew S. Grove)

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In my experience, the best thing to do is to give your subordinate the written review sometime before the face-to-face discussion. He can then read the whole thing privately and digest it. He can react or overreact and then look at the “messages” again. By the time the two of you get together, he will be much more prepared, both emotionally and rationally. ======== High Output Management (Andrew S. Grove)

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Preparing and delivering a performance assessment is one of the hardest tasks you’ll have to perform as a manager. ======== High Output Management (Andrew S. Grove)

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If performance appraisal is difficult, interviewing is just about impossible. The fact is, we managers have no choice but to perform the interview, no matter how hard it is. But we must realize that the risks of failure are high. ======== High Output Management (Andrew S. Grove)

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The applicant should do 80 percent of the talking during the interview, and what he talks about should be your main concern. ======== High Output Management (Andrew S. Grove)

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First, you’re after an understanding of the candidate’s technical knowledge: not engineering or scientific knowledge, but what he knows about performing the job he wants—his skill level. ======== High Output Management (Andrew S. Grove)

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Second, you’re trying to assess how this person performed in an earlier job using his skills and technical knowledge; in short, not just what the candidate knows, but also what he did with what he knows. ======== High Output Management (Andrew S. Grove)

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Third, you are after the reasons why there may be any discrepancy between what he knew and what he did, between his capabilities and his performance. And finally, you are trying to get a feel for his set of operational values, those ======== High Output Management (Andrew S. Grove)

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a subordinate, highly valued and esteemed, decides to quit. I am talking not about someone whose motives are more money and better perks at another company, but about an employee who is dedicated and loyal yet feels his work is not appreciated. You and the company don’t want to lose him, and his decision to leave reflects on you. If he feels his efforts have gone unrecognized, you have not done your job and have failed as his manager. ======== High Output Management (Andrew S. Grove)

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The opening shot usually occurs when you are on the run. On your way to what you consider an important meeting, your subordinate timidly stops you and mutters under his breath, “Do you have a minute?” He then mutters further that he has decided to leave the company. You look at him wide-eyed. Your initial reaction to his announcement is absolutely crucial. If you’re human, you’ll probably want to escape to your meeting, and you mumble something back about talking things over later. But in almost all such cases, the employee is quitting because he feels he is not important to you. If you do not deal with the situation right at the first mention, you’ll confirm his feelings and the outcome is inevitable. Drop what you are doing. Sit him down and ask him why he is quitting. Let him talk—don’t argue about anything with him. Believe me, he’s rehearsed his speech countless times during more than one sleepless night. After he’s finished going through all his reasons for wanting to leave (they won’t be good ones), ask him more questions. Make him talk, because after the prepared points are delivered, the real issues may come out. Don’t argue, don’t lecture, and don’t panic. Remember, this is only the opening skirmish, not the war. And you cannot win the war here—but you can lose it! You have to convey to him by what you do that he is important to you, and you have to find out what is really troubling him. Don’t try to change his mind at this point, but buy time. After he’s said all he has to say, ask for whatever time you feel is necessary to prepare yourself for the next round. But know that you must follow through on whatever you’ve committed yourself to do. What’s your next move? Because you have a major problem, you go to your supervisor for help and advice. He no doubt is also on his way to an important meeting…He, like you, will try to put things off, and most probably not because he doesn’t care, but because the situation affects you more than your supervisor—after all, it is your subordinate who has decided to quit. It is up to you to make it your supervisor’s problem and make him participate in the solution to your problem. Corporate citizenship will probably play a substantial role in what happens next. Your subordinate is a valued employee—of the company. You now must vigorously pursue every avenue available to you to keep him with the firm, even if it means transferring him to another department. If it seems that is the likely solution, you must become the project manager of that solution until the whole thing is settled. You may ask why you should put yourself out to keep an employee whom you are going to lose. There is a basic principle involved: you owe it to your employer to save an employee for the company. Beyond this, the golden rule can become more than a nice ideal in situations of this sort. Today you save a valued contributor for the company by virtually giving him to a fellow manager. Tomorrow it will be his turn to do you the same favor. In the long run, if all managers take this position, they will all win. Now you may be ready to go back to your subordinate with a solution, one that addresses his real reasons for wanting to quit and one that in turn will benefit the company. By now he should know that he is important to you, but he might say that you should have offered him the new position long ago. He might go on to say that you’re only doing it now because he forced you into it, his feeling being that “If I stay, you’ll think of me as the blackmailer forever!” You now have to make him feel comfortable with the new arrangement. You might say something like, “You did not blackmail us into doing anything we shouldn’t have done anyway. When you almost quit, you shook us up and made us aware of the error of our ways. We are just doing what we should have done without any of this happening.” ======== High Output Management (Andrew S. Grove)

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If the absolute amount of a raise in salary is important, that person is probably motivated by physiological or safety/security needs. If the relative amount of a raise—what he got compared to others—is the important issue, that person is likely to be motivated by self-actualization, because money here is a measure, not a necessity. ======== High Output Management (Andrew S. Grove)

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Training is, quite simply, one of the highest-leverage activities a manager can perform. ======== High Output Management (Andrew S. Grove)

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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. ======== High Output Management (Andrew S. Grove)

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You yourself should instruct your direct subordinates and perhaps the next few ranks below them. Your subordinates should do the same thing, and the supervisors at every level below them as well. ======== High Output Management (Andrew S. Grove)

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Training must be done by a person who represents a suitable role model. ======== High Output Management (Andrew S. Grove)

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The person standing in front of the class should be seen as a believable, practicing authority on the subject taught. ======== High Output Management (Andrew S. Grove)

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The first task is teaching new members of our organization the skills needed to perform their jobs. The second task is teaching new ideas, principles, or skills to the present members of our organization. The distinction between new-employee and new-skill training is important because the magnitude of the tasks is very different. The size of the job of delivering a new-employee course is set by the number of new people joining the organization. For instance, a department that has 10 percent annual turnover and grows 10 percent per year has to teach 20 percent of its staff the basics of their work each year. Training even 20 percent of your employees can be a huge undertaking. ======== High Output Management (Andrew S. Grove)

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Teaching new principles or skills to an entire department is an even bigger job. If we want to train all of our staff within a year, the task will be five times as large as the annual task of training the 20 percent who represent new members. ======== High Output Management (Andrew S. Grove)

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You will find that skills that you have had for years—things that you could do in your sleep, as it were—are much harder to explain than to practice. You may find that in your attempt to explain things, you’ll be tempted to go into more and more background until this begins to obscure the original objective of your course. To avoid letting yourself bog down in the difficult task of course preparation, set a schedule for your course, with deadlines, and commit yourself to it. Create an outline for the whole course, develop just the first lecture, and go. ======== High Output Management (Andrew S. Grove)

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Tacit knowledge ======== High Output Management (Andrew S. Grove)

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Develop the second lecture after you have given the first. ======== High Output Management (Andrew S. Grove)

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Crawl, walk, run. ======== High Output Management (Andrew S. Grove)

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After you’ve given the course, ask for anonymous critiques from the employees in your class. Prompt them with a form that asks for numerical ratings but that also poses some open-ended questions. Study and consider the responses, but understand that you will never be able to please all members of your class: typical feedback will be that the course was too detailed, too superficial, and just right, in about equal balance. Your ultimate aim should be to satisfy yourself that you are accomplishing what you set out to do. If this is your first time teaching, you’ll discover a few interesting things: • Training is hard work. Preparing lectures and getting yourself ready to handle all the questions thrown at you is difficult. Even if you have been doing your job for a long time and even if you have done your subordinates’ jobs in great detail before, you’ll be amazed at how much you don’t know. Don’t be discouraged—this is typical. Much deeper knowledge of a task is required to teach that task than simply to do it. If you don’t believe me, try explaining to someone over the phone how to drive a stick-shift car. • Guess who will have learned most from the course? You. The crispness that developing it gave to your understanding of your own work is likely in itself to have made the effort extremely worthwhile. • You will find that when the training process goes well, it is nothing short of exhilarating. And even this exhilaration is dwarfed by the warm feeling you’ll get when you see a subordinate practice something you have taught him. Relish the exhilaration and warmth—it’ll help you to arm yourself for tackling the second course. ======== High Output Management (Andrew S. Grove)

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One More Thing… ======== =======

Bibliography

Grove, Andrew S. 1995. High Output Management. 2nd Vintage Books ed. New York: Vintage.

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Summary

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