8 Things I learned from High Output Management

A new year always finds me reviewing things I learned or books I read the previous year. It’s become a tradition of mine, actually.

As I worked my way down the list this year, I came across “High-Output Management”. This book stood out to me because its author, and one of my heroes, Andy Grove died this past year. Volumes could be said about Andy and his tenure at Intel, but what’s most relevant to me are the two books he authored: “High-Output Management” and “Only the Paranoid Survive”. I re-read these books periodically, but this year I thought I’d take a different approach. This year I’m sharing what I learned from this book. Okay, so here goes:

3 "Core" Ideas

  1. Develop an output-oriented approach to management: It’s strange, almost antithetical, to hear a technology CEO with so much reverence for manufacturing processes and ideas, but if you think about the business Intel is in it makes sense. What’s interesting is Grove’s belief that this approach is suited for non-manufacturing industries especially management positions. He felt that putting outputs at the center of a manager’s focus keeps her focused on the things that matter (more on that later).
  2. Recognize that most useful human activities are accomplished by teams- not individuals. Individual contribution doesn’t scale in a vacuum. Companies are nothing but teams of individual contributors working towards a collective goal.
  3. Manager’s Output Equation. A manager’s output is the output of the organizational units under his supervision or influence.
Manager's Output Equation
Manager's Output Equation

Change IS the Environment

We often speak of “the environment” as a static state, as if the business world (or nature or the universe for that matter) is not in constant flux and change is somehow an anomaly. That’s not the case at all. Grove accepts that change and disorder is a normal part of any environment. His “remedy” for dealing with it is to develop a high tolerance for disorder. He literally suggests that you:

..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.

Grove, Andrew S. (2015-11-18). High Output Management . Knopf Doubleday Publishing Group. Kindle Edition.

Measure Everything That Matters

Grove spends a significant amount of time on performance and the importance of measuring things in this book. The key points I took away on this subject were:

  1. Any measurement is better than none. If you aren’t measuring your outputs you aren’t serious about improvement.
  2. Outputs Over Activities. Effective measurements focus on outputs, rather than activities. For instance, an effective sales person is measured on revenue (output)- not sales activities. Every role within the organization should be tied to an output and that output subsequently measured.
  3. Physical Over Abstract. Measure physical, “countable” things- not ideas or concepts.

The True Importance of Reporting

This was an interesting one. Grove felt like reports were important, but not for the reasons one might expect. He felt the value of reporting was not in the reports themselves, but rather in the focus and self-discipline used to create them. In this context, the report elicits a deeper level of thought- a level that you wouldn’t be able to provide verbally. What’s especially interesting for managers is his belief that report writing is invaluable (for the team member), but reading them (as a manager)?-  not so much.

Leverage is King

Leverage stands out as a key concept of Grove’s managerial philosophy. From his perspective, any high productivity management framework depends on managers selecting and executing tasks with high leverage. Output should be tightly coupled with some type of leverage coefficient and as such yields a new manager’s output formula:

Leverage Formula
Leverage Formula

Key Points:

  • Being “high-output focused” means being sensitive to leverage variables every day, all day.
  • A manager can increase their output productivity in 3 ways:
    1. Hitting the Gas – increasing the speed that a manager performs his activities.
    2. Eat and Drink Leverage- increasing the leverage associated with managerial activities.
    3. Mix it Up- shifting the mix of a manager’s low leverage activities and high-leverage activities.

It's About Time

The single most important resource a manager has at her disposal is how she allocates her time. Grove advocates using one’s calendar as a production tool, scheduling non-critical (but necessary) tasks between “limiting” (critical) tasks throughout the day. He continues his manufacturing process analogy by recommending that managers keep a “material inventory” of non-critical, strategically productive projects that don’t need to be completed in the short-term but add value over the long-term. Having this list will prevent managers from meddling with productive employees and creating negative leverage.

Meetings, Meetings, Meetings

Grove spent some on meetings in general. I think the easiest way to describe his framework would be to separate meetings into two categories (my classifications).

The One-On-One

  • Good managers don’t use these meetings to focus on the manager’s problems, they use them to focus on their team member’s problems. In fact, has outlined a principle:

Grove’s Principle of Didactic Management, “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.

Grove, Andrew S. (2015-11-18). High Output Management (p. 76). Knopf Doubleday Publishing Group. Kindle Edition.

  • These one-on-one meetings should pre-planned and include an outline. Both the manager and team member should have a copy of this outline to capture notes and action items.

The Team Meeting

Grove felt that team meetings were critical:

For experience, we at Intel are likely to ask a person in management senior to the other members of the group to come to the meeting. But it is very important that everybody there voice opinions and beliefs as equals throughout the free discussion stage, forgetting or ignoring status differentials.

Grove, Andrew S. (2015-11-18). High Output Management (p. 92). Knopf Doubleday Publishing Group. Kindle Edition.

  • A manager should never use this platform to pontificate. These meetings should be about collective planning or decision making only.
  • If team members get side-tracked into a discussion that doesn’t involve the rest of the team the manager should table that discussion for a later date- the team meeting should focus on team task items.

Managing By Objectives

I’m definitely a fan of MBO (managing by objectives) and I’m not sure about its full etiology, but Grove points out that an effective MBO system answers to questions:

  • Where do I want to go? (objective)
  • How will I pace myself to see if I’m getting there?(key results)

I learned a number of other things from this book: product development, planning frameworks, why hybrid organizational structures exist, etc. but I think you’ll get the most from it if you read it yourself. This is one of those books that keeps giving you more year after year and its worth a read.

I’ll probably tackle “Only The Paranoid Survive” in a future article, so please look out for that.

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