High Output Management

By Andrew S. Grove

Rating: 10/10

Best Line #1: Training is, quite simply, one of the highest-leverage activities a manager can perform.

Best Line #2: The old saying has it that when we promote our best salesman and make him a manager, we ruin a good salesman and get a bad manager. But if we think about it, we see we have no choice but to promote the good salesman. Should our worst salesman get the job?

Anyone Can Be A Manager

It’s true. And anyone can be a butcher, baker, or candlestick maker. Only, if you’re a bad baker, people know it pretty quickly. And I’ve never seen a candlestick maker but I think I could tell the difference between the best and the worst.

It isn’t so obvious with most managers, though. The typical workplace has managers who operate in such ambiguity that it’s hard to know when, exactly, they’re helping or hurting the cause. To put a twist on the classic quote by John Wannamaker,

Half the money I spend on management is wasted; the trouble is I don’t know which half.

I’ve never known of another profession with so much responsibility and so little formal training. Even when it comes to classic routes of managerial education, such as the MBA, it largely focuses on managing a business more than managing the people within it. This is fine, I think. So long as people develop a deep understanding of the dark art in some fashion. A degree in “people management” would mean absolutely nothing anyway.

So to help us all be the best managers of people we can be, I’ve curated and selected the best books from my library that I think truly encapsulate the finest wisdom on the topic. I base this not only on my own readings, but also on the recommendation of others who have been far more successful than me. The first book in this series Andrew “Andy” S. Grove’s High Output Management. I’ll offer two, perhaps three, more books in future weeks.

This week’s articles on the topic include the following:

Monday: What Makes A Great Manager?

Tuesday: Meetings Are A Manager’s Medium.

Wednesday: How To Fix The Aimless Workplace. (my personal favorite)

Thursday: Who’s The Boss? The Ambiguous Organization.

What Is Management For?

Output. Hence the title of the book. Our author is the famed former-CEO and Chairman of Intel who certainly has credible views on the topic. In his view, a manager in the workplace is like the coach on the field; they serve as a force multiplier, pushing their people to ever-greater heights of productivity and quality.

It reminds me of a beautiful distinction made by the folks at Netflix with their famous culture slide deck. You can see the full thing here. But one slide stands out as the primary rational from which the rest of the ideas are built:

If you read this slide, and then read Andy Grove’s book, it all makes sense. As a sports team, we have to perform. To perform, we have to produce. To produce at a good and ever-improving rate, we have to focus on the tactics of this book.

It really is that simple. Yet, I have seen so much confusion amongst managers. I’ve heard talk, as highlighted in the slide above, that we are “family”. It’s a nice sentiment but we tolerate a lot of weird stuff from our families, don’t we? Should that tolerance extend to the workplace, too? I suppose it could. So long as we continue to have great output, great performance, and a winning result. The point here is that the focus on performance has to be the North Star that guides all else. Otherwise, we lose the whole point of what management is for. The slippery slope then ensues. Let this line from our author serve as the final word:

The role of the manager here is also clear: it is that of the 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 having played the game well, he also understands it well.

Performance Reviews

With past articles, we’ve covered about half the major topics in this brilliant book. A deeper treasure trove awaits the reader and I sincerely urge everyone to get this book. For the sake of our broader review, I’ll focus on two major topics. The first, as the subheader indicates, is one that many of us dread.

Confession: I’ve done a good number of performance reviews. But by Andy’s measure, I’ve not done a number of good performance reviews. Which is tragic since I fully agree with his position that a performance review is the single most important feedback a supervisor can provide. My problem, as always, has been my failure to stay true to the North Star. If a manager is a coach, there to improve performance, then the performance review is like a standard playback of game film. No sports coach watches game film solely as a means of providing encouragement to players. They watch the film to find the good, yes, but also the bad and how to improve.

Me? I’ve spent far too much time thinking that I need to win points through encouragement. So my reviews have typically been warm and pleasant experiences capped off with a sense of accomplishment for another great year. Even if it was more of a “good” or “mediocre” year.

The underlying strategy to this is that I want my people to walk with confidence and to get something positive when they fear some negative. And I’ve operated under the idea that correction is best delivered in the moment, not afterwards. This has served me well.

But after re-reading the wisdom from our author, I’ve come to understand that my performance reviews have not served anyone well. It’s been a giant nothingburger.

So delicious …

Andy explains:

The review is usually 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.

A lot of times, my staff have been terrific at their jobs. At least, as their jobs have been defined. Herein lies the problem: as you can tell from the quoted passage, there must be an effort to raise a subordinate to a higher level on the performance curve.

I, for one, do not have a performance curve for many of my teams. Nothing formal, anyway. And until there is a deep integration of a system like OKRs, I’m not sure anyone can put such a curve to use. After all, what is a performance curve? Is it some arbitrary notion of what “good” and “great” means? According to the whims and fancies of an individual boss? If so, we’ve done zero favors to our people.

OKRs are an excellent starting point for a broader, formal discussion on how people should progress. We usually think of progression solely in terms of job progression—climbing the ladder. But as we’ll see in the next topic, there must be a deeper embrace for skill progression. People don’t necessarily want new, bigger jobs. Past a certain point, people want to be better versions of themselves. More from our author:

The biggest problem with most reviews is that we don’t usually define what it is we want from our subordinates, and, as noted earlier, if we don’t know what we want, we are surely not going to get it.

Yes, this is the biggest problem. For reasons I’ve already confessed. Also:

It is very important to assess actual performance, not appearances; real output, not good form.

And finally …

… the review is not to cleanse your system of all the truths you may have observed about your subordinate, but to improve his performance.

These two passages further demonstrate the desperate need for a genuine performance system. Again, like OKRs. Without it, managers suffer. For one, they fall into the trap I just described where the review is used for a more feel-good experience since there isn’t any real performance curve to judge them against.

Second, this point about actual performance, not appearance is utterly devastating. We have all seen the boss’s sycophants get promoted, the smooth talkers and the oily political operatives. Meanwhile, the real work continues to get done by others who aren’t so savvy. Andy is obviously calling for a meritocracy in the workplace. We are not always prepared for such an environment. But we should be. He’s right.

No one questions the fact that Steph Curry starts for the Warriors. No one disputes why Patrick Mahomes is the quarterback for the Chiefs instead of the good but not-as-good Alex Smith. It feels perfectly fair in that arena under the banner of “may the best man win”. But in the workplace? It feels awful. Until, again, we fully adopt the principles and practices that Andy Grove prescribes here. Then it can make sense. Just as it does in the sports world.

That next quote, about how the review is not a time for a manager to  “cleanse the system”, is of tremendous importance in this regard. Consider the times you have been given harsh feedback from a supervisor. Has it always been based on clear, objective concerns? Probably not.

Managers are human and they sometimes get emotional and then get confused. “Cleansing the system” can be a way of them exacting their arbitrary pound of flesh for something they didn’t like. This is when you get mean bosses and tyrants and hateful, spiteful people and bad culture.

Anyway, I think the important aspect of this broader focus on performance, output, and the manager-as-a-coach is that it clarifies what a “good job”. This can protect an employee from the arbitrary meanness of a really bad manager. If a good job is clearly defined in measures of output, with a reasonable and ethical culture surrounding the work, then the bad manager has nowhere to hide. They must judge by those honest measures. Without those, the bad manager can define “good” on a whim, based on personal preference and other horrible criteria.

Motivation

This is the final topic that I’d like to cover. I’ll do so briefly because the book mustn’t be spoiled. Andy speaks a great deal about the fact that training and motivation are the core elements of great management. Training is a very broad field with significant ground to cover. Motivation, however, is a bit more simple. Andy does a fantastic job of clarifying the fundamentals to demonstrate just how simple (but not easy) it is.

A need once satisfied stops being a need and therefore stops being a source of motivation. Simply put, if we are to create and maintain a high degree of motivation, we must keep some needs unsatisfied at all times.

There’s a couple points here. First, as covered in a previous article, goal achievement leads to a bit of letdown, a loss of motivation:

The Thrill Of The Chase; The Sorrow Of The Catch.

Second, the idea that some needs must be unsatisfied is very rich. But short of deliberately paying people less than what they want, how can we harness the power of motivation via unmet need? Andy provides the answer:

Once someone’s source of motivation is self-actualization, his drive to perform has no limit.

This goes back to the Maslow Hierarchy of Needs. There are hundreds of perfectly good articles on Medium to explain this further. The point, I think, is that you need to hire and/or cultivate people who seek self-actualization. Easier said than done!

A lot of people are perfectly happy with what they have, who they are, and seek no additional actualization. Which is completely understandable and laudable. So in those instances, if self-actualization isn’t as prevalent, what else can help motivate? Andy provides the answer there, too:

Eliciting peak performance means going up against something or somebody.

For all those wonderfully-secure individuals out there who just want to do the job they’re already doing, there remains this one element of terrific motivation: competition. Everyone understands and values competition. The art of this, however, is making sure that you make the right game with the right competitor. This will be a focus for another week. For now, the final point to make is that performance must remain the goal in Andrew S. Grove’s philosophy of management. And whether it’s the performance against one’s own standard (self-actualization) or the performance against a common competitor, the manager can and should—in fact, must—help the team reach new heights. Otherwise, what’s the point?

Again, this is the first of a handful of great management books. And it’s the first one every manager should read. Here’s the link to buy it on Amazon.  

Principles and Mental Models

  • When a person is not doing his job, there can only be two reasons for it. The person either can’t do it or won’t do it; he is either not capable or not motivated.
  • There are only two ways in which a manager can impact an employee’s output: motivation and training.
  • If you are not training, then you are basically neglecting half the job.
  • The main purpose of the one-on-one is mutual teaching and exchange of information.
  • The one-on-one should be regarded as the subordinate’s meeting, with its agenda and tone set by him.
  • 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.
  • The true output of the planning process is the set of tasks it causes to be implemented.
  • Implement only that portion of a plan that lies within the time window between now and the next time you go through the exercise.
  • 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.)
  • The one thing an MBO system should provide par excellence is focus. This can only happen if we keep the number of objectives small.
  • Good management rests on a reconciliation of centralization and decentralization.
  • Corporate culture is a set of values and beliefs, as well as familiarity with the way things are done and should be done in a company.
  • How does a manager motivate his subordinates? For most of us, the word implies doing something to another person. But I don’t think that can happen, because motivation has to come from within somebody. Accordingly, all a manager can do is create an environment in which motivated people can flourish.
  • 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.
  • You don’t need management to supervise the workings of free-market forces.
  • If the person’s life depended on doing the work, could he do it? If the answer is yes, that person is not motivated; if the answer is no, he is not capable.
  • A need once satisfied stops being a need and therefore stops being a source of motivation.
  • Once someone’s source of motivation is self-actualization, his drive to perform has no limit.
  • Eliciting peak performance means going up against something or somebody.
  • The role of the manager here is also clear: it is that of the coach.
  • It is very important to assess actual performance, not appearances; real output, not good form.
  • A poor performer has a strong tendency to ignore his problem. Here a manager needs facts and examples so that he can demonstrate its reality. Progress of some sort is made when the subordinate actively denies the existence of a problem rather than ignoring it passively, as before.
  • An interview produces the most insight if you steer the discussion toward subjects familiar to both you and the candidate.
  • Training is, quite simply, one of the highest-leverage activities a manager can perform.