1983 HighOutputManagement
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- (Grove, 1983) ⇒ Andrew S. Grove. (1983). “High Output Management.” Random House. ISBN:9780394532640
Subject Headings: Objectives and Key Results, (Grove, 1983) Chatbot.
Notes
- Managerial Leverage: Focuses on how managers can maximize their output by increasing the productivity of their teams and influencing neighboring organizations.
- Objectives and Key Results (OKRs): Introduces the OKR framework, which focuses on setting clear, measurable goals and tracking progress towards them.
- Production Principles in Management: Applies manufacturing principles to management tasks, identifying bottlenecks and optimizing processes for efficiency.
- Effective Meetings: Categorizes different types of meetings (e.g., one-on-ones, operational reviews) and provides guidance on conducting them effectively.
- Training and Motivation: Stresses the importance of training and motivating employees to maximize team output.
- Performance Reviews: Offers detailed guidance on conducting performance reviews and interviews to select and develop high-performing teams.
- Indicators for Success: Emphasizes the use of measurable indicators like sales forecasts and quality checks to guide decision-making and ensure efficiency.
- Managing Constraints: Discusses identifying bottlenecks or limiting steps in processes and focusing on improving them to increase overall output.
- Decision-Making Frameworks: Provides tools for making timely decisions, balancing competing priorities, and using data-driven insights.
- Production Analogy: Uses the analogy of running a breakfast café to explain management concepts like process optimization and quality control.
Cited By
References
2024
- (Wikipedia, 2024) ⇒ https://en.wikipedia.org/wiki/High_Output_Management Retrieved:2024-9-7.
- High Output Management is a 1983 book by Andy Grove, CEO of Intel. It describes many of the management and productivity concepts that Grove used at Intel, such as the objectives and key results (OKR).
High Output Management never reached best seller lists during the 1980s or 1990s, but became a cult classic within Silicon Valley decades later and is frequently praised for its influence by tech founders such as Mark Zuckerberg of Meta, Evan Williams of Twitter, Brian Chesky of Airbnb, and Ben Horowitz of venture capital firm a16z.
- High Output Management is a 1983 book by Andy Grove, CEO of Intel. It describes many of the management and productivity concepts that Grove used at Intel, such as the objectives and key results (OKR).
Quotes
- “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.”
- “The absolute truth is that if you don’t know what you want, you won’t get it.”
- “Let chaos reign, then rein in chaos.”
- “But in the end self-confidence mostly comes from a gut-level realization that nobody has ever died from making a wrong business decision, or taking inappropriate action, or being overruled.”
- “Here I’d like to introduce the concept of 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.”
- “My day always ends when I’m tired and ready to go home, not when I’m done. I am never done.”
- “Remember that by saying “yes”—to projects, a course of action, or whatever—you are implicitly saying “no” to something else.”
- “We must recognize that no amount of formal planning can anticipate changes such as globalization and the information revolution. You need to plan the way a fire department plans.”
- “Just as you would not permit a fellow employee to steal a piece of office equipment worth $2,000, you shouldn’t let anyone walk away with the time of his fellow managers.”
- “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. 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.”
- “Reports are more a medium of self-discipline than a way to communicate information. Writing the report is important; reading it often is not.”
- “[..] 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.”
- “The old saying has it that when we promote our best salesman and make him a manager, we ruin a good salesman and get a bad manager. But if we think about it, we see we have no choice but to promote the good salesman. Should our worst salesman get the job? When we promote our best, we are saying to our subordinates that performance is what counts.”
- “To get acceptable quality at the lowest cost, it is vitally important to reject defective material at a stage where its accumulated value is at the lowest possible level. Thus, as noted, we are better off catching a bad raw egg than a cooked one, and screening out our college applicant before he visits Intel. In short, reject before investing further value.”
- “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.”
- “At Intel, 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.”
- “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.”
- “Delegation without follow-through is abdication.”
- “The output of a manager is the output of the organizational units under his or her supervision or influence.”
- “You have to accept that no matter where you work, you are not an employee—you are in a business with one employee: yourself. You are in competition with millions of similar businesses. There are millions of others all over the world, picking up the pace, capable of doing the same work that you can do and perhaps more eager to do it. Now, you may be tempted to look around your workplace and point to your fellow workers as rivals, but they are not. They are outnumbered—a thousand to one, one hundred thousand to one, a million to one—by people who work for organizations that compete with your firm. So if you want to work and continue to work, you must continually dedicate yourself to retaining your individual competitive advantage.”
- “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?”
- “We confused the manager’s general competence and maturity with his task-relevant maturity.”
- “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.”
- “Eliciting peak performance means going up against something or somebody. Let me give you a simple example. 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. This is key to the manager’s approach and involvement: he has to see the work as it is seen by the people who do that work every day and then create indicators so that his subordinates can watch their “racetrack” take shape.”
- “The key to survival is to learn to add more value—and”
- “The single most important task of a manager is to elicit peak performance from his subordinates. So if two things limit high output, a manager has two ways to tackle the issue: through training and motivation.”
- “High managerial productivity, I argue, depends largely on choosing to perform tasks that possess high leverage.”
- “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. Thus I will assert again that a meeting is nothing less than the medium through which managerial work is performed. That means we should not be fighting their very existence, but rather using the time spent in them as efficiently as possible.”
- “Adapt or die.”
- “All production flows have a basic characteristic: the material becomes more valuable as it moves through the process.”
Table of Contents:
Part I: The Breakfast Factory
The Basics of Production: Delivering a breakfast (or a college graduate, or a compiler, or a convicted criminal ...) p.3
Managing the Breakfast Factory p.24
Part II: Management is a Team Game
Managerial Leverage p.39
Chapter 4. Meetings: The Medium of Managerial Work p.55
Chapter 5. Decisions, Decisions p.73
- NOTE: Decision-Making Stages:
- Free Discussion: Create an open environment where all opinions and data are shared freely.
- Reaching a Clear Decision: Ensure the decision is articulated clearly, even if there is disagreement.
- Full Support: Participants must commit to supporting the final decision, regardless of personal agreement.
- NOTE: Knowledge vs. Position Power:
- Knowledge Power diverges from Position Power over time.
- Middle Managers act as connectors, aligning knowledge-based and position-based power to balance decision-making.
- NOTE: Challenges in Decision-Making:
- Avoid “[Peer Group Syndrome|peer group syndrome],” where participants defer expressing opinions until a consensus seems likely.
- When consensus fails to emerge, a senior manager should make the final decision based on comprehensive discussions.
- NOTE: Implementing Effective Decision-Making:
- Decisions should be made at the lowest competent level.
- Senior Managers should use their authority only after ensuring all viewpoints have been thoroughly considered.
- NOTE: Output of Decision-Making:
- The primary output is a clear decision that leads to aligned action and implementation.
Planning: Today’s Actions for Tomorrow’s Output p.95
- NOTE: Three-Step Planning Process:
- Determine Market Demand: Assess the external environment to forecast future needs.
- Establish Present Status: Evaluate the organization’s current capabilities and project pipeline.
- Reconcile Gaps: Identify changes needed to bridge the gap between present status and future requirements.
- NOTE: Management by Objectives (MBO):
- Set clear objectives and define key results to maintain focus.
- Align individual goals with organizational strategy using a cascading system of objectives.
- NOTE: Strategic Planning vs. Tactical Planning:
- Strategic Planning: Outlines broad, long-term goals.
- Tactical Planning: Focuses on specific short-term actions and measurable milestones.
- NOTE: Implementation Guidelines:
- Objectives must be time-bound and measurable.
- Regular feedback loops are essential for tracking progress and making timely adjustments.
Part III: Team of Teams
The Breakfast Factory Goes National p.115
- NOTE: Centralization vs. Decentralization:
- Centralized Activities: Leverage economies of scale (e.g., equipment purchasing, quality control).
- Decentralized Activities: Allow local managers to respond to market-specific needs (e.g., hiring, advertising).
- NOTE: Balancing Local and Central Control:
- Determine which functions are best managed centrally (e.g., quality standards) and which should be adapted locally (e.g., advertising, labor practices).
- Regional hubs can help bridge local needs with central standards.
- NOTE: Key Challenges:
- Managing autonomy while maintaining brand consistency.
- Establishing uniform processes that still allow flexibility for local adaptation.
Hybrid Organizations p.133
- NOTE: Structure:
- Combines elements of both functional and mission-oriented organizations.
- Functional Groups provide specialized services across the organization (e.g., HR, Finance).
- Mission-Oriented Divisions focus on specific product lines or geographic markets.
- NOTE: Advantages of Hybrid Organizations:
- Achieves economies of scale while maintaining local responsiveness.
- Expertise and resources are shared across divisions.
- NOTE: Challenges of Hybrid Organizations:
- Increased complexity and potential for information overload.
- Conflicts can arise over the allocation of shared resources.
- NOTE: Groves' Law:
- All large organizations with a common business purpose will eventually adopt a hybrid organizational form to balance efficiency and responsiveness.
Dual Reporting p.151
- NOTE: Concept:
- Employees report to both a functional and a mission-oriented supervisor.
- Example: A finance controller may report to both the divisional general manager and the corporate finance manager.
- NOTE: Implementation Challenges:
- Requires strong corporate culture and clear communication to manage ambiguities.
- Trust and cooperation are essential to prevent conflicts and ensure alignment between dual supervisors.
- NOTE: Peer Groups and Councils:
- Created to handle technical issues and share expertise across divisions.
- Peer Councils serve as an informal supervisory structure, helping to coordinate and align technical efforts.
- NOTE: Modes of Control:
- Functional Managers provide technical oversight.
- Divisional Managers prioritize mission-related objectives, ensuring alignment with business goals.
Part IV: The Players
The Sports Analogy p.169
- NOTE: Compares organizational management to coaching, emphasizing the use of organizational metrics and feedback to drive team performance.
Task-Relevant Maturity p.177
- NOTE: Introduces the concept of task-relevant maturity, where a manager adapts their leadership style based on an employee’s competence and readiness for specific tasks.
Performance Appraisal p.189
- NOTE: Frames performance appraisal as a dual role of managers acting as both judges (evaluating outcomes) and coaches (providing developmental feedback).
Manager as Judge and Jury p.201
- NOTE: Discusses the challenges of balancing fairness and consistency in performance evaluation while driving improvement.
Two Difficult Tasks p.213
- NOTE: Addresses managing employee terminations and making compensation decisions effectively to maintain team morale and fairness.
Compensation as Task-Relevant Feedback p.225
- NOTE: Highlights compensation as an essential form of feedback, aligning performance with rewards to incentivize desired behaviors.
Why Training is the Boss's Job p.237
- NOTE: Stresses the manager’s responsibility in providing training and skill development to maximize team output and adaptability.
One More Thing...
References
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Author | volume | Date Value | title | type | journal | titleUrl | doi | note | year | |
---|---|---|---|---|---|---|---|---|---|---|
1983 HighOutputManagement | Andrew Grove (1936-2016) | High Output Management | 1983 |