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High output management - Book summary

In this book, former Chairman and CEO of Intel, Andrew Grove, provides a comprehensive overview of a manager’s role and purpose, with practical, timeless insights on how to increase your managerial output.  The book is written primarily for middle managers, but the insights are relevant for leaders and managers of all levels. In this free version of the High Output Management summary, we’ll outline the key concepts and tips in 3 parts: production principles, optimizing team output and individual peak performance.

High Output Management: An Overview

This book was first written in 1983, and later updated with comments on the impact of the digital revolution. With globalization and digitization, things move much faster, communication is now instantaneous between large numbers of people, and you can almost always find someone who can/will do a job.

Grove advocates this motto: “Let chaos reign, then rein in chaos.” Managers must be prepared for uncertainty and disorder, yet establish as much order as possible using their managerial processes. They must accept that they can’t forecast the future, yet plan in a way that allows them to rapidly respond to changes.

Middle managers are the backbone of any organization. They include (i) people who oversee a team, and (ii) people who don’t have a supervisory role but influence others’ work through their knowledge and expertise. They’re like mini-CEOs who drive the performance of their groups.

High Output Management is organized broadly into 3 key sections, each focusing on a core idea in the book:

  • Using an output-oriented approach to increase collective output;
  • Exercising managerial leverage to increase the output of all teams under the manager’s supervision or influence; and
  • Motivating every team member to operate at his/her personal best, like how professional athletes push themselves to achieve peak performance.

High Output Management summary_Overview

 

We’ll now briefly explain these concepts. Do get a copy of our full High Output Management summary  for more details, examples and applicable tips.

Using Production Principles to Increase Output

Management is about increasing performance or outputs.  Managers can increase collective outputs by applying manufacturing principles and adopting an output-oriented approach.

Understanding Production Concepts/Principles

Andrew Grove provides a “manufacturing 101” introduction by explaining the key concepts and principles used in production or manufacturing, including a detailed analogy using a fictitious example of a Breakfast Factory.

Here are several important concepts for any manager (even if you’re not responsible for manufacturing):

  • Any production function should meet this objective: to deliver products at a quality acceptable to customers, by a scheduled time, and with the lowest possible cost.
  • To manage your overall outputs, you must map out your production process, identify and remove the key constraints, and have some “slack” to cater for gaps between your production and sales cycles.
  • To know exactly what’s happening in your production process, it helps to have an indicator for each operational goal.
  • Aim to detect and fix problems at the earliest, lowest-value stage possible (since raw materials become more valuable as they go through the production process).

Do get a copy of our full book summary for more details on:

  • Key elements in production operations to look out for (with examples of limiting steps, capacity and other constraints)
  • Types of indicators to consider, including characteristics of effective indicators
  • Types of quality inspections, and approaches for balancing between quality and cost-control.

Increasing Managerial Leverage and Productivity

A manager’s output includes that of all organizational units under his/her supervision or influence. This includes people who aren’t under his/her supervision but are influenced by his/her expertise.

In particular, managers perform 3 key roles:

  • Acquiring and sharing information. You must acquire info from a wide range of sources (e.g. news, reports, verbal sources, observations) to get a fuller picture and verify what you’ve learned. You can also provide info (e.g. facts, goals, priorities, preferences) to influence processes and decisions.
  • Decision-making. This includes making decisions themselves and facilitating others’ decisions by providing inputs or facilitating debate.
  • Being a role model for others.

Productivity is your output divided by the required labor. So, to increase productivity, you can:

  1. Reduce the time spent by working faster or harder;
  2. Increase the leverage for existing activities; and/or
  3. Shift from low-leverage to high-leverage activities.

High Output Management summary - Increasing Managerial Leverage

In the complete version of our High Output Management summary, we break down exactly how to achieve the above. This includes:

  • Specific strategies and tips to perform your managerial activities faster
  • The 3 ways in which high-leverage activities can occur
  • How to delegate effectively
  • How to use meetings as an essential management tool
  • How to facilitate decisions at the lowest competent level
  • How to plan effectively in 3 parts and use OKRs (objectives and key results) to focus your actions.

Managing a Team of Teams

In any organization, work is accomplished by teams, not individuals. Managers must organize and manage people optimally in a way that increases mutual-support and team output.

Hybrid Organizations and Dual Reporting

As an organization grows, it will inevitably face the centralization-decentralization dichotomy. Grove’s Law says that “all large organizations with a common business purpose end up in a hybrid organizational form”. In our complete book summary, we elaborate more on (i) how hybrid organizations work, (ii) the roles that middle managers play in optimizing resource allocation, and (iii) important concepts like dual reporting and two-plane reporting.

Influencing Work Behavior

To get people to behave in the desired ways, you need to understand the 3 modes of control: free market forces, contractual obligations, and cultural values. [In the full summary, we’ll explain each of these factors, and how to select the best mode of control based on (i) the person’s motivation and (ii) the environment’s CUA factor (complexity, uncertainty and ambiguity).]

Peak Performance in Individuals

A team is only as strong as its members. Managers are responsible for training and motivating every team member to operate at his/her personal best.

There are only 2 possible reasons why someone doesn’t perform:

  • They can’t do it (lack of capability); or
  • They won’t do it (lack of motivation).

So, managers can improve performance via training or motivation:

  • To coach or train people to improve their capability; and/or
  • Create an environment where people can thrive and are motivated to keep stretching themselves.

In our full 18-page summary, we’ll dive into various strategies, tools and tips that managers can use to improve capability and/or motivation:

  • Creating sustainable motivation: understand the Maslow hierarchy of needs, and what it means to create a space where people are driven by self-actualization;
  • Coaching and training: the role of task-relevant maturity (TRM), why training is a manager’s responsibility and how to start training with no prior experience.
    • Performance management and compensation: mastering the art of performance appraisals (performance assessment + motivating improvement), using compensation as a feedback tool, and tips for interviewing/retaining team members.

Getting the Most from High Output Management

In this article, we’ve briefly outlined some of the key insights and strategies you can use to achieve desired change. For more examples, details, and actionable tips to apply these strategies, do get our complete book summary bundle which includes an infographic, 18-page text summary, and a 28-minute audio summary.High Output Management summary - book summary bundle

This is a practical, easy-to-read book packed with anecdotes, examples and tips that are useful for any manager. Besides the key ideas in this High Output Management summary, Andrew Grove also shares useful resources such as a sample performance review worksheet, interview questions etc.  You can purchase the book here for the full details.

About the Author of High Output Management

High Output Management is written by Andrew Grove–a Hungarian-born American businessman, engineer, author and a pioneer in the semiconductor industry. He participated in the founding of Intel, became its president in 1979, the chief executive officer in 1987. In 1997, he was chosen as Time magazine’s Man of the Year. In 1998, he stepped down as CEO of Intel, and retired as chairman of the board in 2004. Grove taught at the Stanford University Graduate School of  Business for 24 years. He passed away in March 2016.

High Output Management Quotes

“The output of a manager is the output of the organizational units under his or her supervision or influence.”

“As you plan you must answer the question: What do I have to do today to solve—or better, avoid—tomorrow’s problem?”

“Each time you make a commitment, you forfeit your chance to commit to something else.”

“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.”

“The single most important task of a manager is to elicit peak performance from his subordinates.”

“[If] we don’t know what we want, we are surely not going to get it.”

Click here to download the High Output Management summary & infographic

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