Book: High Output Management

These are the passages and lessons I took away from High Output Management by Andrew Grove. All content credit goes to the author(s).

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The New Business Environment

• “As a manager, you need to develop a higher tolerance for disorder. You need to try to do the impossible, to anticipate the unexpected. And when the unexpected happens, you should double your efforts to make order from the disorder it creates in your life. “Let chaos reign, then rein in chaos”.”

Managing Your Career

• “You must continually dedicate yourself to retaining your individual competitive advantage.”
• “Nobody owes you a career. You own it as a sole proprietor. You must compete with millions of individuals every day, and every day you must enhance your value, hone your competitive advantage, learn, adapt, get out of the way, move from job to job, even from industry to industry if you must and retrench if you need to do so in order to start again. “

Production

• “The most cost-effective way to deploy your resources, is the one that can give you the best delivery time and product quality at the lowest possible cost. To find that right answer, you must develop a clear understanding of the trade-offs between the various factors – manpower, capacity, and inventory – and you must reduce the understanding to a quantifiable set of relationships.”

Production Performance

• “Indicators can be a big help in solving all types of problems. If something goes wrong, you will have a bank of information that readily shows all the parameters of your operation, allowing you to scan them for unhealthy departures from the norm.”

Managerial Output

Manager’s Output = The output of his organization + The output of neighbouring organizations under his influence

Managerial Leverage

• “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.”

Meetings

• “A meeting is nothing less than the medium through which managerial work is performed. Understand the differences between process-oriented (knowledge sharing) and mission-oriented (problem solving) meetings and leverage them accordingly.”

Decisions

• “Any decision should be worked out and reached at the lowest competent level, such that it can be made by the people closest to the situation and who know most about it.”

• “Employ consistent ways by which decisions are to be made, such that people objectively trust the output of the decision making process.”

Planning

• “Focus on answering: “What do I have to do today to solve – or better avoid – tomorrow’s problem?”

• “A manager’s objectives are supported by an appropriate set of key results. His objectives are tied to his supervisor’s objectives, so that if the manager meets his objectives, his supervisor will meet his.”

• “Saying “yes” to a course of action implies saying “no” to something else. You have to have the guts, honesty, and discipline to drop projects as well as to initiate them, to shake your head “no” as well to smile “yes”.”

Teams

• “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.”

Hybrid Organizations

• “Organizations come in two extreme forms: in totally mission-oriented (decentralized) or in totally functional form (centralized). Mission-oriented empowers responsiveness while functional-oriented enables leverage.”

• “The most important task of an organization is the optimum and timely allocation of its resources and the efficient resolution of conflict arising over that allocation.”

Dual Reporting

• “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.”

Modes of Control

• “Bring your people in at a relatively low-level, well-defined jobs with low CUA factors (Complexity, Uncertainty, Ambiguity) and over time they will share experiences with their peers, supervisors, and subordinates and will learn the values, objectives, and methods of the organization. They will gradually accept, even flourish in, the complex of multiple bosses and peer decision-making.”

• “Managers and subordinates shift between modes of works based on the task and problem being solved.”

Team Performance

• “Our role as managers is first, to train the individuals, and second, to bring them to the point where self-actualization motivates them, because once there, their motivation will be self-sustaining and limitless.”

Manager as Coach

• “First, an ideal coach takes no personal credit for the success of his team, and because of that his players trust him.”

• “Second, he is tough on his team. By being critical, he tries to get the best performance his team members can provide.”

• “Third, a good coach was likely a good player himself at one time, and thus understands the game well.”

Task-Relevant Maturity (TRM)

• “We should try to raise the TRM 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.”

Performance Appraisal

• “The purpose of the performance review is to improve the subordinate’s performance. It’s dedicated to two things: 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.”

Hiring and Retaining

• “Make a judgement about how the candidate would perform in your company’s environment. Project the candidate’s future performance in a new environment based on his own description of past performance.”

• “This subordinate is valuable and important because he has attributes that make him so. Other employees respect him; and if they are like him, they identify with him. So other superior performers like him will track what happens to him, and their morale and commitment to the company will hinge on the outcome of this person’s fate.”

Compensation

• “As manager’s our concern is to get a high level of performance from our subordinates. So we want to dispense, allocate, and use money as a way to deliver task-relevant feedback.”

• Peter Principle → “an individual keeps getting promoted until he reaches his level of incompetence and then stays there.”

• “We managers must be responsible and provide our subordinates with honest performance ratings and honest merit-based compensation. If we do, the eventual result will be performance valued for its own sake throughout our organization.”

Training is the Boss’s Job

• “Insufficiently trained employees produce inefficiencies, excess costs, unhappy customers, and sometimes even dangerous situations.”

• “Make a list of the things you feel your subordinates or the members of your department should be trained in. Don’t limit the scope of your list. Items should range from what seems simple to loftier and more general things like the objectives and value systems of your department, your plant, and your company.”

• “Training must be done by a person who represents a suitable role model. The person should be seen as a believable, practicing authority on the subject taught.”

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More:

• Buy the book: High Output Management, by Andy Grove (Amazon)