“High Output Management” – Part 2

The journey in the universe of the book “High Output Management” by Andrew Grove continues. In the first article we covered the management’s equation, in the second one we learned about the importance of having indicators, and now it’s time to understand the management as a team game.

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💡Managerial leverage

What is a manager’s output ?

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 influence 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” organization is enormous.

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.

But the key definition here is that 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, the in itself does not create output. Her organization does. By analogy, a coach or a quarterback alone does not score touchdowns and win games. Entire teams with their participation and guidance and direction do. League standings are kept by team, not by individual. Business – and this means not just the business of commerce but the business of education, the business of government, the business of medicine – is a team activity. And, always, it takes a team to win.

It is important to understand that a manager will find himself engaging in an array of activities in order to affect output. A manager must form opinions and make judgement, he/she must provide direction, he/she must allocate resources, he/she must detect mistakes, and so on. All these are necessary to achieve output. But output and activity are by no means the same thing.

A manager’s work is never done. There is always more to be done, more that should be done, always more than can be done.

Most useful information to all managers, comes from quick, often casual verbal exchanges. This usually reaches a manager faster than anything written down. And usually the more timely the information, the more valuable it is.

So why are written reports necessary at all? They obviously can’t provide timely information. What they do is constitute an archive of data, help to validate ad hoc inputs, and catch, in safety-net fashion, anything you may have missed. But reports also have another totally different function. As they are formulated and written, the author is forced to be more precise than he/she 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/her representation. Reports are more medium of self-discipline than a way to communicate information. Writing the report is important; reading it often is not.

Then why are they underutilized? Because of the awkwardness that managers feel about walking through an area without a specific task in mind. At Intel this problem is combated by using programmed visits meant to accomplish formal tasks, but which also set the stage for ad hoc mini-transactions.

The third major kind of managerial activity, of course, is decision making. Decisions can be separated into 2 kinds:

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

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

In 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.

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 going visibly.

Before you are horrified by how much time we spend in meetings, answer a question: which of the activities-information-gathering, information-giving, decision-making, nudging, and being a role model – could we have performed outside a meeting?

You as a manager can do your work in a meeting, in a memo, or through a loudspeaker for that matter. But you must choose the most effective medium for what you want to accomplish, and that is the one that gives you the greatest leverage. More about meetings later.

We agreed that 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 (L1*A1 + L2*A2 + …)

Managerial productivity – that is, the output of a manager per unit of time worked – can be increased in 3 ways:

  1. increasing the rate with which a manager performs his/her activities, speeding up his/her 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-leverage activities can be achieved in 3 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 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

Leverage can also be negative. Some managerial activities can reduce the output of an organization. Like something very simple. Suppose you are a key participant at a meeting and you arrived unprepared. Not only do you waste the time of the people attending the meeting because of your lack of preparation – a direct cost of your carelessness – but you deprive the other participants of the opportunity to use that time to do something else.

In effect, the lack of a decision is the same as negative decision; no green light is a red light, and work can stop for a whole organization.

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

The 3rd kind of managerial activity with high leverage is exercised by a person with unique skills and knowledge.

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.

💡Delegation as leverage

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 on 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 activities are prescribed in detail, this produces low managerial leverage.

Given a choice, should you delegate activities that are familiar to you or those that aren’t? Before answering, consider the following principle: 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 preceding in line with expectations. Because it is easier to monitor something with which you are familiar, if you have a choice you should delegate those activities you know best. But recall the pencil experiment and understand before the fact that this will very likely go against your emotional gain.

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.

To use quality assurance principle effectively, the manager should only go into details randomly, just enough to try to ensure that the subordinate is moving ahead satisfactorily. To check into all the details of a delegated task would be like quality assurance testing 100 percent of what manufacturing turned out.

Increasing managerial activity rate: speeding up the line

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

Built-in leverage: how many subordinates should you have …

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.)

The six to eight rule is right for the classically hierarchical manager whose primary work is the supervision of others. What about a know-how manager, the middle manager who mainly supplies expertise and information? Even if he works without a single subordinate, servicing a number of varied “customers” as an internal consultant can in itself be a full-time job. In fact, anyone who spends about a half day per week as a member of planning, advisory, or coordinating group has the equivalent of a subordinate. So as a rule of thumb, if a manager is both a hierarchical supervisor and a supplier of know-how, he/she should try to have a total six to eight subordinates or their equivalent.

💡Interruptions – the plague of managerial work

Meetings – the medium of managerial work

One school of management though considers them the curse of the manger’s existence. But there is another way to regard meetings. Earlier we said that a big part of a middle manager’s work is to supply information and know-how, and to impart a sense of the preferred method of handling things to the groups under his control and influence. A manager also makes and helps to make decisions. Both kinds of basic managerial tasks can only occur during face-to-face encounters, and therefore only during meetings.

Process-oriented meetings

One-on-ones

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/she is doing and what he/she is concerned about.

How often should you have one-on-ones? Or put another way, how do you decide how often somebody needs such a meeting? The answer is the job or task-relevant maturity of each of your subordinates. In other words, how much experience does a given subordinate have with the specific task at hand? This is not the same as the experience he/she has in general or how old he/she is.

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.

Staff meetings

Staff meetings is one in which a supervisor and all of his/her subordinates participate, and which therefore presents an opportunity for interaction among peers.

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.

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 for 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.

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 the lecturer is not listed.

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. For example, 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.

Mission-oriented meetings

Put it another way: the real sign of mal-organization is when people spend more than 25 percent of their time in ad hoc mission-oriented meetings.

Decisions, decisions

Making decisions – or more properly, participating in the process by which they are made – is an important and essential part of every manger’s work from one day to the next.

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 business 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 we mean by that? 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/she possesses a good deal of knowledge-based power in the organization that hired him/her. If he/she does well, he/she will be promoted to higher and higher positions, and as the years pass, his/her position power will grow but his/her intimate familiarity with current technology will fade. Put another way, even if today’s veteran manager was once an outstanding engineer, he/she is not now the technical expert he/she was when he/she joined the company. At Intel, based on the author perspective, the managers get a little more obsolete every day.

Ideal model of decision-making is a know-how business. The first stage should be free discussions, in which all points of view and aspects of 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 and avoid being associated with a losing position. Bizarre as it may seem, some organization actually encourage such behavior.

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.

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 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/she can and must get from everyone.

Striving for the output

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/herself. 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 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/her to wield that authority any earlier.

Planning: today’s actions for tomorrow’s output

The planning process:

Most people think “planning” is one of the loftier responsibilities of management – we all learned somewhere that “a manager plans, organizes, controls.” In fact, planning is an ordinary everyday activity; it’s something all of us do all the time with no fanfare, in both our personal and professional lives. For instance, as you’re driving to work in the morning, you are likely to decide whether or not you need gasoline. You look at the gauge to see how much gas you have in the tank, you estimate how far it is you need to go, and you then make a rough guess as to know how much gas you need to get to and from your office. By comparing in your mind the gas you need with the gas you have, you decide whether you should stop for gas or not. This is a simple example of planning.

STEP 1 – environmental demand

Just what is your environment? If you look at your own group within an organization as if it were stand-alone company, you see that your environment is made up of other such groups that directly influence what you do. 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 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.

STEP 2 – present status

The second step of planning is to 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.

STEP 3 – what to do to close the gap

The final step of planning consists of undertaking new tasks or modifying old ones to close the gap between your environmental demand and what your present activities will yield. The questions that should be addressed:

  • What do you need to do to close the gap?
  • 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.

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

The output of the planning process

Output of the planning process is the set of tasks it causes to be implemented. From the book, the output of Intel’s annual plan, for instance, is the actions taken and changes prompted as a result of the thinking process that took place throughout the organization. In other words, the output of the planning process is the decisions made and the actions taken as a result of the process. Who should be involved in the planning process? The operating management of the organization. Why? Because 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 though 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.

💡Management by objectives(MBO): the planning process applied to daily work

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 place myself to see if I am getting there? (The answer gives us milestones, or key results.)

To illustrate an objective and a key result, consider the following: I want to go to the airport to catch a plane in an hour. That is my objective. I know that I must drive through towns A,B and C on my way there. My key results become reaching A,B and C in 10, 20 and 30 minutes respectively. If I have been driving for 20 minutes and haven’t yet made town A, I know I’m lost. Unless I get off the highway and ask someone for directions, I probably won’t make my flight.

An MBO system should set objectives for a relatively short period. For example, if we plan on a yearly basis, the corresponding MBO system’s time frame should be at least as often as quarterly or perhaps even monthly.

The MBO is the parent of OKR (Objective and Key Results).


This is the third article built as a summary from the book “High Output Management” by Andrew Grove. Enjoy it and feel free to leave a comment if you have questions or any kind of observations. And if you like it please share! Thank you for reading! 😊

2 thoughts on ““High Output Management” – Part 2

  1. Pingback: “High Output Management” – Part 3 | alin miu

  2. Pingback: “High Output Management” – Part 4 | alin miu

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