Andrew S. Grove was one of the founders and the CEO of Intel Corporation, helping transform the company into the world’s largest manufacturer of semiconductors.
He passed away in March of 2016, but left behind a fantastic legacy, including High Output Management, which illustrates how he successfully ran one of the world’s leading companies for decades.
Below, you’ll find an outline of the key points I took away from this title. I explain why I outline books in this post. I’d recommend it for not only middle-managers, but also for their subordinates (myself), as you can understand what makes a great manager, in addition to improving your one-on-ones, how to increase your leverage, and get others to commit to key decisions.
In addition, here is a great blog post with some pull quote from the book, which offer more context behind many of the points below.
I – The Breakfast Factory
Questions to ponder
- Am I adding real value, or just passing along information?
- Am I plugged into what is happening?
- Am I trying new things?
“Every hour should be spent increasing output or value of the output of those around you.”
“The output of a manager is the output of the organization + units under management’s influence.”
Companies such as Intel typically have their staff base broken down into:
- 25% Make the product
- 25% Supervision
- 25% Administration
- 25% Design
Rules of a new environment
- Things happen faster
- Anything that can be done, will be done, either by you, or someone else
Chapter 1 – The Basics of Production
Find the most cost effective way to deploy your resources.
- There is one right answer, one that can give you the best delivery time and product quality at the lowest possible cost
Testing / Inspection
2 options for testing / inspection:
Choose in-process tests over those that destroy the product. Items become more valuable as they get further through down the chain of production.
Chapter 2 – Managing the Breakfast Factory
Measure them by their output (orders), and not their activity (calls)
Why use indicators?
- Spell out objectives
- Provider a degree of objectivity
- Measure to compare different organizations performing the same task
Reliability: – Gate-like inspection vs. monitoring
- Lean towards monitoring
- Ex: The IRS monitors and randomly checks, instead of watching every person who files taxes
How to Increase productivity – 2 ways
- Work faster
- Change the nature of your work
- Show what the future may look like
- Give time to take corrective action
- Make it possible to avoid problems
- Show output over time
- Force you to look at the future, as you can extrapolate from the past
- Forecast output over several months
- Great for economic trends
“People will find ways to let whatever they’re doing, fill the time available for completion”
II – Management is a Team Game
Chapter 3 – Managerial Leverage
Manager’s Output: Output of the org / Output of the neighboring orgs under mgt influence
- Writing them is important, but reading them is not nearly as important
- Author is forced to be more precise vs. what they would say if it were only a verbal explanation
Basis of all managerial work. Managers also do:
- Info Gathering
- Description Making
Output generated by managerial activity
Can be increased in 3 ways:
- Speed of work
- Increasing Leverage
- Shifting your mix of activities and resources
Using a manager’s experience & knowledge of a subordinates responsibilities to assume control.
Don’t do this.
- Must share a common information base & open ideas with subordinate for this to work
- You must also follow through after the activity is completed by someone else, to verify
- Delegate the activities you know best
Should be used as a production planning tool
Chapter 4 – Meetings, The Medium of Managerial Work
Two types of meetings
- Process oriented
- Knowledge is shared, and info is exchanged. Take place on a regular basis.
- Mission oriented
- Purpose is to solve problems
- Frequently used to produce a decision
- Not scheduled long in advance, b/c they usually can’t be
Process oriented meetings
- Staff meetings
- Operational review
“If you spend 25% or more of your time in meetings, it’s a sign of mis-management.” – Peter Drucker
- This is the subordinate’s meeting
- Emphasis should be on indicators signaling trouble
Opportunity to share learning b/t employees who are several ranks apart
Why take notes during meetings?
- Allows you to keep focus6
- You can digest information better
Chapter 5 – Decisions, Decisions
Goal: Not to get people to agree with you, simply means you need them to get on board with the decision.
6 points of every decision
- What decision needs to be made?
- When does it need to be made?
- Who will decide?
- Who needs to be consulted?
- Who will veto / ratify
- Who needs to be informed of the decision?
At the end of big decisions
- Announce the decision
- Meet again at a later date, and gather feedback
Chapter 6 – Planning: Today’s Actions for Tomorrow’s Output
- Determine expectations of you
- Keep aware of team advances
- Evaluate performance of your vendors
- Determine your present status
- Close the game
- What can you do to close the gap?
- What do you need to do to close the gap?
Strategy vs. Tactics
- Summary of general actions meaningful to you
- What you’ll do to implement the strategy
Today’s gap represents a failure in prior planning.
Allow for time to judge if decisions have been effective. Don’t plan too often.
MBO – Management By Objectives
- Where do you want to go?
- How will I pace myself? (milestones)
III – Team of Teams
Chapter 8 – Hybrid Orgs
Mission Oriented vs Functional
Most companies are a hybrid
- Each business unit pursues what it does best
- Little tie-in to other units
- Completely centralized
- Performs work for other groups
3 Benefits of functional
- Economies of scale
- Resources can be shifted
- Can concentrate on mastering a specific trade
2 Disadvantages of functional
- Information overload
- Competition for resources
Which businesses are an exception to the hybrid approach?
Conglomerates are typically mission oriented
Chapter 9 – Dual Reporting
- Started by NASA in the 1960s
- An outsider can wield as much influence as internal management
Chapter 10 – Modes of Control
Behavior: Controlled by 3 factors
- Free market forces
- Contractual obligations
- Cultural values
In exchange for a monopoly, gov’t can dictate pricing and profit generated by utility companies
Cultural Values: Can be imposed on employees in two ways:
Appropriate modes of control
- Nature of a person’s motivation
- Nature of the environment
IV – The Players
Chapter 11 – The Sports Analogy
#1 task of managers should be to elicit maximum performance from subordinates
Motivation comes from within the individual
Managers should create an environment where motivated people can succeed
Needs -> Drive -> Motivation
When an individual reaches this on Mazlow’s Hierarchy of Needs, there is no limit to their drive
2 inner forces driving people
- Competence drive
- Achievement driven
How to decide if money is a huge factor in an employee’s decision
- Absolute sum
- How much am I making?
- Individual is working within physiological or safety modes.
- Relative to others
- How do I stack up against my teammates’ pay?
- Esteem / recognition based, or self-actualization
- Best employees! Need measures to gauge his progress and achievement.
- Money is a measure to the employee- they value recognition over money
Chapter 12 – Task Relevant Maturity
What is it?
Combo of the degree of their achievement, orientation, and readiness to take on responsibility
When TRM is high, you can delegate tasks to those high TRM employees, thereby increasing your managerial leverage
At highest levels, employee training is complete, and their motivation comes from within — best employees
Chapter 13 – Performance Appraisal
Single most valuable feedback to an employee
Purpose: Improve subordinate’s performance
How to hold a performance review
- Be objective
- Clarify expectations of the subordinate
- Judge whether subordinate has met expectations
How to judge during a performance review
Both performance of the group & the individual need to be taken into consideration
- Asses the subordinate’s performance, not their potential
- Performance reviews should not contain any surprises
- Poor performers have a tendency to ignore their flaws
- Management should focus on their best employees to increase their own leverage
There are three outcomes of the performance review
- Sub agrees the assessment, commits to improve
- Sub disagrees w/ assessment, commits to improve
- Sub disagrees w/ assessment, does not commit to improve