High Output Management

Key Concepts

Creating indicators to support decision making

“Indicators tend to direct your attention toward what they are monitoring. It is like riding a bicycle: you will probably steer it where you are looking. If, for example, you start measuring your inventory levels carefully, you are likely to take action to drive your inventory levels down, which is good up to a point. But your inventories could become so lean that you can’t react to changes in demand without creating shortages. So because indicators direct one’s activities, you should guard against overreacting. This you can do by pairing indicators, so that together both effect and counter-effect are measured.” (p. 17)

“The second criterion for a good indicator is that what you measure should be a physical, countable thing. Examples of effective measures of administrative output are shown below. Because those listed here are all quantity or output indicators, their paired counterparts should stress the quality of work.” (p. 17)

“Leading indicators give you one way to look inside the black box by showing you in advance what the future might look like. And because they give you time to take corrective action, they make it possible for you to avoid problems. Of course, for leading indicators to do you any good, you must believe in their validity.” (p. 20)

“Automation is certainly one way to improve the leverage of all types of work. Having machines to help them, human beings can create more output. But in both widget manufacturing and administrative work, something else can also increase the productivity of the black box. This is called work simplification. [...] In the first round of work simplification, our experience shows that you can reasonably expect a 30 to 50 percent reduction.” (p. 35)

“To implement the actual simplification, you must question why each step is performed. Typically, you will find that many steps exist in your work flow for no good reason. Often they are there by tradition or because formal procedure ordains it, and nothing practical requires their inclusion.” (p. 36)

Managerial Leverage

“A manager’s output = The output of his organization + The output of the neighboring organizations under his influence” (p. 40)

“A manager can do his “own” job, his individual work, and do it well, but that does not constitute his output. If the manager has a group of people reporting to him or a circle of people influenced by him, the manager’s output must be measured by the output created by his subordinates and associates.” (p. 40)

“Managerial Output = Output of organization   = L1 × A1 + L2 × A2 +…” (p. 54)

“This equation says that for every activity a manager performs—A1, A2, and so on—the output of the organization should increase by some degree. The extent to which that output is thereby increased is determined by the leverage of that activity—L1, L2, and so on. A manager’s output is thus the sum of the result of individual activities having varying degrees of leverage. Clearly the key to high output means being sensitive to the leverage of what you do during the day.” (p. 54)

“Leverage can also be negative. Some managerial activities can reduce the output of an organization. I mean something very simple. Suppose I am a key participant at a meeting and I arrive unprepared. Not only do I waste the time of the people attending the meeting because of my lack of preparation—a direct cost of my carelessness—but I deprive the other participants of the opportunity to use that time to do something else.” (p. 55)

“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.” (p. 58)

Manages should apply production principles to their approach

“Manufacturers turn out standard products. By analogy, if you can pin down what kind of interruptions you’re getting, you can prepare standard responses for those that pop up most often. Customers don’t come up with totally new questions and problems day in and day out, and because the same ones tend to surface repeatedly, a manager can reduce time spent handling interruptions using standard responses. Having them available also means that a manager can delegate much of the job to less experienced personnel.” (p. 69)

“Also, if you use the production principle of batching—that is, handling a group of similar chores at one time—many interruptions that come from your subordinates can be accumulated and handled not randomly, but at staff and at one-on-one meetings, the subject of the next chapter. If such meetings are held regularly, people can’t protest too much if they’re asked to batch questions and problems for scheduled times, instead of interrupting you whenever they want.” (p. 69)

“The point is to impose a pattern on the way a manager copes with problems. To make something regular that was once irregular is a fundamental production principle, and that’s how you should try to handle the interruptions that plague you.” (p. 70)

Meeting are the medium of managerial work

“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.” (p. 71)

“From what I can tell, regularly scheduled one-on-ones are highly unusual outside of Intel. When I ask a manager from another company about the practice, I usually get an “Oh no, I don’t need scheduled meetings with my supervisor [or subordinate]; I see him several times a day…” But there is an enormous difference between a casual encounter by a supervisor and a subordinate, or even a meeting (mission-oriented) to resolve a specific problem, and a one-on-one.” (p. 73)

Mission-Oriented Meetings

“Unlike a process-oriented meeting, which is a regularly scheduled affair held to exchange knowledge and information, the mission-oriented meeting is usually held ad hoc and is designed to produce a specific output, frequently a decision. The key to success here is what the chairman does. Very often no one is officially given that title, but by whatever name, one person usually has more at stake in the outcome of the meeting than others. In fact, it is usually the chairman or the de facto chairman who calls the meeting, and most of what he contributes should occur before it begins. All too often he shows up as if he were just another attendee and hopes that things will develop as he wants. When a mission-oriented meeting fails to accomplish the purpose for which it was called, the blame belongs to the chairman.” (p. 84)

“The absolute truth is that if you don’t know what you want, you won’t get it. So before calling a meeting, ask yourself: What am I trying to accomplish? Then ask, is a meeting necessary? Or desirable? Or justifiable? Don’t call a meeting if all the answers aren’t yes.” (p. 84)

“Keep in mind that a meeting called to make a specific decision is hard to keep moving if more than six or seven people attend. Eight people should be the absolute cutoff. Decision-making is not a spectator sport, because onlookers get in the way of what needs to be done.” (p. 85)

“Ideally, a manager should never have to call an ad hoc, mission-oriented meeting, because if all runs smoothly, everything is taken care of in regularly scheduled, process-oriented meetings. In practice, however, if all goes well, routine meetings will take care of maybe 80 percent of the problems and issues; the remaining 20 percent will still have to be dealt with in mission-oriented meetings. Remember, Peter Drucker said that if people spend more than 25 percent of their time in meetings, it is a sign of malorganization. I would put it another way: the real sign of malorganization is when people spend more than 25 percent of their time in ad hoc mission-oriented meetings.” (p. 87)

Planning should focus on tomorrow, not today

“The key to both Bruce’s and Cindy’s efforts is that their planning produced tasks that had to be performed now in order to affect future events. I have seen far too many people who upon recognizing today’s gap try very hard to determine what decision has to be made to close it. But today’s gap represents a failure of planning sometime in the past. By analogy, forcing ourselves to concentrate on the decisions needed to fix today’s problem is like scurrying after our car has already run out of gas. Clearly we should have filled up earlier. To avoid such a fate, remember that as you plan you must answer the question: What do I have to do today to solve—or better, avoid—tomorrow’s problem?” (p. 108)

Strategy should be iterative

“How far ahead should the planners look? 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. We will have another chance to replan the second of the five years in the next year’s long-range planning meeting, when that year will become the first year of the five. So, keep in mind that you implement only that portion of a plan that lies within the time window between now and the next time you go through the exercise. Everything else you can look at again. We should also be careful not to plan too frequently, allowing ourselves time to judge the impact of the decisions we made and to determine whether our decisions were on the right track or not. In other words, we need the feedback that will be indispensable to our planning the next time around.” (p. 109)

Planning should be inclusive, not the province of “planners”

“Who should be involved in the planning process? The operating management of the organization. Why? Because the idea that planners can be people apart from those implementing the plan simply does not work. Planning cannot be made a separate career but is instead a key managerial activity, one with enormous leverage through its impact on the future performance of an organization. But this leverage can only be realized through a marriage, and a good collaborative one at that, between planning and implementation.” (p. 109)

Management by Objectives

“The idea behind MBO is extremely simple: If you don’t know where you’re going, you will not get there.” (p. 110)

“A successful MBO system needs only to answer two questions: 

“1.  Where do I want to go? (The answer provides the objective.) 

“2.  How will I pace myself to see if I am getting there? (The answer gives us milestones, or key results.)” (p. 110)

“The one thing an MBO system should provide par excellence is focus. This can only happen if we keep the number of objectives small. In practice, this is rare, and here, as elsewhere, we fall victim to our inability to say “no”—in this case, to too many objectives. We must realize—and act on the realization—that if we try to focus on everything, we focus on nothing. A few extremely well-chosen objectives impart a clear message about what we say “yes” to and what we say “no” to—which is what we must have if an MBO system is to work.” (p. 111)

Task-Relevant Maturity

“Finally, as university behavioral science departments developed and grew, the theories of motivation and leadership became subjects of carefully controlled experiments. Surprisingly, none of the early intuitive presumptions could be borne out: the hard findings simply would not show that one style of leadership was better than another. It was hard to escape the conclusion that no optimal management style existed.” (p. 172)

“The inevitable conclusion is that high output is associated with particular combinations of certain managers and certain groups of workers. This also suggests that a given managerial approach is not equally effective under all conditions.” (p. 173)

“That mode is one that we don’t think an enlightened manager should use. As a result, we often don’t take it up until it is too late and events overwhelm us. We managers must learn to fight such prejudices and regard any management mode not as either good or bad but rather as effective or not effective, given the TRM of our subordinates within a specific working environment. This is why researchers cannot find the single best way for a manager to work. It changes day by day and sometimes hour by hour.” (p. 178)

Why Training Is the Boss’s Job

“For the already overscheduled manager, the trickier issue may be who should do the training. Most managers seem to feel that training employees is a job that should be left to others, perhaps to training specialists. I, on the other hand, strongly believe that the manager should do it himself.” (p. 222)

“If you accept that training, along with motivation, is the way to improve the performance of your subordinates, and that what you teach must be closely tied to what you practice, and that training needs to be a continuing process rather than a one-time event, it is clear that the who of the training is you, the manager. You yourself should instruct your direct subordinates and perhaps the next few ranks below them. Your subordinates should do the same thing, and the supervisors at every level below them as well.” (p. 224)

“There is another reason that you and only you can fill the role of the teacher to your subordinates. Training must be done by a person who represents a suitable role model. Proxies, no matter how well versed they might be in the subject matter, cannot assume that role. The person standing in front of the class should be seen as a believable, practicing authority on the subject taught.” (p. 224)

Quotables

“When you look at what happened, you won’t see any obvious patterns. I dealt with things in seemingly random fashion. My wife’s reaction to my day was that it looked very much like one of her own. She was right in noting a similarity. My day always ends when I’m tired and ready to go home, not when I’m done. I am never done. Like a housewife’s, a manager’s work is never done. There is always more to be done, more that should be done, always more than can be done.” (p. 47)

“Picture this. I am your supervisor, and I walk over to you with pencil in hand and tell you to take it. You reach for the pencil, but I won’t let go. So I say, “What is wrong with you? Why can’t I delegate the pencil to you?” We all have some things that we don’t really want to delegate simply because we like doing them and would rather not let go.” (p. 59)

“You should say “no” at the outset to work beyond your capacity to handle.” (p. 64)

“To digress a bit, I also think that one-on-ones at home can help family life. As the father of two teenage daughters, I have found that the conversation in such a time together is very different in tone and kind from what we say to each other in other circumstances. The one-on-one makes each of us take the other seriously and allows subtle and complicated matters to come up for discussion. Obviously, no notes are taken, as father and daughter usually go out for dinner at a restaurant, but a family one-on-one very much resembles a business one-on-one. I strongly recommend both practices.” (p. 78)

“When such values are at work, some emotionally loaded words come into play—words like trust—because you are surrendering to the group your ability to protect yourself. And for this to happen, you must believe that you all share a common set of values, a common set of objectives, and a common set of methods. These, in turn, can only be developed by a great deal of common, shared experience.” (p. 147)

“Let’s talk about surprises. If you have discharged your supervisory responsibilities adequately throughout the year, holding regular one-on-one meetings and providing guidance when needed, there should never be any surprises at a performance review, right? Wrong. When you are using the worksheet, sometimes you come up with a message that will startle you. So what do you do? You’re faced with either delivering the message or not, but if the purpose of the review is to improve your subordinate’s performance, you must deliver it. Preferably, a review should not contain any surprises, but if you uncover one, swallow hard and bring it up.” (p. 192)

“Preparing and delivering a performance assessment is one of the hardest tasks you’ll have to perform as a manager. The best way to learn how to do one is to think critically about the reviews you yourself have received.” (p. 199)