High Output Management by Andy S. Grove

Introduction

• The output of a manager is the output of the organizational units under their supervision or influence.
• The 1:1 meeting is a fundamental tool of management
  • The supervisor can teach their skills and suggest ways to approach things
  • The subordinate can provide details of what they are working on and raise concerns
• You need to retain a competitive advantage to protect your career
  • Are you adding real value and not just passing information?
    • Are you increasing the output of your organization?
  • Are you plugged into what is happening around you?
    • What is happening inside and outside of the organization/company?
  • Are you trying out new ideas?
    • Are you playing with innovative technologies, using them, not just reading about them?

Ben Horowitz’s foreword

• The manager’s job is to scale – your knowledge is worth nothing unless you can transfer it to the rest of the organization.
• Subordinates can be underperforming for two reasons: Lack of skills or motivation.
• When recognizing gaps, our instinct tells us to close the gap – instead of recognizing that it resulted from a failure to plan in the past.

THE BREAKFAST FACTORY

Delivering a Breakfast

• Principle of production: To build and deliver products in response to the demands of the customer at a scheduled delivery time, in acceptable quality, and at the lowest possible cost
• Limiting Step: The overall shape of your process is defined by the limiting step; which steps take the longest or costs the most? Work backward from that.
• Automating a process comes at the cost of flexibility.

Managing the Breakfast Factory

• Indicators: To run an operation, you need a set of indicators, each focusing on a specific operational goal.
• Overreacting: If you focus on one indicator, you will probably overcorrect – you can guard against this by pairing indicators that counteract each other.
• Output: A good indicator measures the output, not the activity of a process.
• Leading Indicators: Provide a way to predict the final outputs before they happen, given that you can rely on their validity.
• Productivity: This can only be increased by working faster or changing the nature of the activity.
• Leverage: The output per activity. You want to increase the leverage of your activities. Automation, simplification, and questioning (“why”) can increase the leverage of an activity or process.

MANAGEMENT IS A TEAM GAME

Managerial Leverage

• Manager’s output = Output of the organization + output of the neighboring organizations under their influence

  • If L is Leverage, and A is an activity, then:

      	Output = L1 x A1 + L2 x A2 …
    

  • The sum of the activity outputs, which are determined by the activity’s leverage

• Managerial activities: Almost all activities of the manager fall into the following categories.
  • Information-gathering
    • Verbal: Most useful information comes from verbal exchanges
      • Written reports: Valuable only because they force the author to think before approaching you
      • Visits: Efficient to visit a location, observe and engage with folks.
  • Information-giving
    • Managers convey knowledge, objectives, priorities, preferences – this is key to delegation.
  • Decision-making
    • You either make or participate in decisions
    • Two types of decisions:
      • Forward-looking decisions
      • Decisions in response to a problem or crisis
  • Nudging
    • Conveying a preference on direction – more than information-giving, but less than decision-making / directing.
    • We need to act as role models in the organization in order to nudge folks into certain behaviors
• Meetings: They provide occasions for managerial activities. Meetings are the medium, not the activity.
• Managerial Leverage: We can increase leverage in three ways:
  • Increase the rate at which activities are performed
  • Increase the leverage of the individual activity
  • Shift the mix from low-leverage to high-leverage activities
• High Leverage Activities
  • When a large group is affected by the manager’s activity
  • When the manager’s input affects the employee over a long period of time
  • When a group is affected by the manager providing unique insight or key information
• Negative Leverage
  • Failure to plan and untimeliness are crucial to leverage – neglecting these can lead to negative leverage (reducing the output of the group through your involvement)
  • Waffling: Lack of decisions are the same as no decision, creating negative leverage
  • Mood: Your mood and visible role-model can directly affect the output of the group
  • Meddling: Using your knowledge to assume command of a situation rather than letting the subordinate figure it out
• Delegation as leverage
  • Delegation only works if the delegator and delegatee have a common information base and notion about solving problems, otherwise the delgatee will always need specific instructions in order to be an effective proxy
  • Holding on to tasks should be a conscious decision; otherwise, it’s meddling
  • Follow-through: You can never fully wash your hands off a task given to you – delegation without follow-through is abdication. You need to monitor what you delegate.
  • Monitoring: Delegated tasks should be monitored at the lowest value-add stage
    • review rough drafts, not near-final reports
    • variable approach: increase or decrease frequency based on the employee’s task-level maturity
    • check-in on details randomly, not for every task
    • Let the subordinate do the work, and then question them in reviews to see if their thinking is sound
• Increasing the rate of output
  • Limiting Step: Identify the “unmovable” tasks and events, and work around those
  • Batching: Group similar tasks together so you reduce setup time; create and maintain re-usable assets
  • Forecasting: A manager can forecast and predict their activities; the medium is the calendar
  • Calendar: Use it as your production planning tool.
    • Say “no” at the outset to things beyond your capacity.
    • Move towards active use of the calendar, filling in important work in-between your limiting steps.
    • Incorporate slack, some tolerance, and looseness in your production line, so that an unexpected event doesn’t ruin your day
    • Inventory: Maintain a set of projects that you can work on that will increase leverage long-term; this will prevent you from meddling in current work if you find you have time
• Built-in leverage in the organization
  • A manager can act as their own subordinate (e.g., lead a group but also act as one of the PMs in the group) to prevent on-the-job retirement and meddling
• Interruptions
  • Uncontrolled interruptions are the biggest problem for managers who need to strive towards regularity
  • Identify the most common interruptions, and prepare standard responses
  • Use batching to move interruptions to staff meetings and one-on-ones
  • Make data available quickly to reduce time spent on answering to interruptions
• Goal: Impose a pattern to how you deal with problems

Meetings – the medium of managerial work

• A manager's job includes
  • sharing knowledge
  • imparting a sense of the preferred way of doing things
  • making decisions
• These activities mostly happen in meetings.
• We should not fight the existence of meetings, but rather use them efficiently.
• Two basic types of meetings:
  • Process-oriented
    • People attending should know how the meeting is run and what is usually discussed
    • Opportunity to "batch" transactions
      • One-on-One
        • Principal way the relationship between manager and subordinate is maintained
        • Venue for mutual teaching and exchange of information
        • Dedicated space to talk about specific problems and situations
        • Frequency depends on the task relevant maturity - how much experience does the employee have in the current role or the task at hand?
        • Frequency also depends on the job area - e.g. how dynamic is the job area and how often do things change in the environment?
        • Duration should be at least 1 hour to allow for deeper discussion and complex problems, otherwise the subordinate
  • Mission oriented
    • Held ad-hoc and aimed at a specific outcome, often a decision
    • Chairman often just shows up as an attendee, and meeting fails to achieve intended outcome
    • Chairman's obligations:
      • Send invite and pre-empt or follow up to get commitments - if someone can't attend, they should send a deputy
      • Ensure a meeting is less than 8 people, otherwise attendees get passive
      • Don't allow people to be late, and call them out
      • Send an agenda ahead of the meeting
      • Send minutes after the meeting
  • Meetings are not evil per se, the real sign of misorganization is if people spend more than 25% of their time in ad-hoc mission-oriented meetings.

Decisions

• Rapid divergence in knowledge-driven companies between power based on position and power based on knowledge. The middle manager is the link between the two.
• Ideal model of decision making
  • Free discussion: Allow everyone to speak, and ask those who haven't said anything to contribute - that's why they are in the meeting.
  • Clear decision: Make sure to frame the terms of the decision clearly.
  • Full support: Disagree-and-commit; even if not everyone is on board, ask them to support the decision.
• This method is natural for younger graduates, but managers struggle because they fear embarassment if they express their views forcefully.
• Decisions should be always made at the lowest competent level, allowing discussion at an equal level at least during the free discussion phase
• Side note: The lack of status symbols is a feature of tech companies, not a bug, exactly for the above reasons
• Peer-group syndrome
  • Often meetings will wander on without a clear decision being made
  • This can be fixed with the peer-plus-one approach, inviting one additional person who is in a higher position to step in if the subordinates cannot reach agreement.
  • Peers often won't stick their neck out, this leads to a danger of group opinion, where one member states a weak opinion, which is then restated by a peer more forcefully, and eventually becomes the ruling opinion just because it feels comfortable.
  • The person who has most at stake should take charge in meetings, and invite the senior to take over if needed.
• Optimimum point for decision
  • A manager strives for the output by finding the optimum point for making a decision.
    • Too early if you haven't heard the real issues from everyone
    • Too late if the discussion meanders on with no new information
    • Manager needs to have the courage to force a decision
• Six questions about decisions
  • What decision needs to be made?
  • When does the decision have to be made?
  • Who will decide?
  • Who will need to be consulted before and after the decision is made?
  • Who will ratify or veto the decision?
  • Who will need to be informed of the decision?

Planning

• General planning process consists of three steps:
  1. Establish a projected need or demand
  2. Establish your present status
  3. Compare and reconcile steps 1 and 2
• The set of actions you decide to close the gap between projection and present is your strategy.
• The implementation of these actions are your tactics.
• Management by Objectives
  • Basically outlines OKRs
    1. Where do you want to go (Objective)?
    2. How will I pace myself to see if I'm getting there (Key Result)?

TEAM OF TEAMS

Hybrid Organizations

• Organzations come in two extremes:
  • Mission-oriented organisations: Decentralized, each group pursues its own business with little interaction with other groups.
  • Functional organisations: Centralized, each group provides a function at scale (Finance, Operations, Merchandising, etc.)
• Sloan: "Good management rests on a reconciliation of decentralization and centralization."
• Grove's Law: All large organizations with a common business purpose end up in a hybrid organizational form.

Modes of Control

• Behaviour in work environments can be controlled by three invisible and pervasive means
  1. Free-market forces
  2. Contractual obligations
  3. Cultural values
• Free market forces