Book Review: “High Output Management” — by Andrew S. Grove
First published in 1983 by Andrew S. Grove, former chairman and CEO of Intel, High Output Management describes how to build and run successful companies and teams from the perspective of management and leadership.
In essence, the book applies traditional production principles to management and leadership. These principles resonate well today also because of the rise of Agile methodologies having been applied so widely in the business world. As an engineer I can’t help but appreciate the pragmatism with which Andrew S. Grove describes complex concepts like how to organise one’s time to optimise for high-leverage activities or motivate subordinates.
On the flip side, I also felt that the book could come across as overly simplistic at times. Reducing complex organisations to production principles (e.g. thinking only from the perspective of inputs, inventory, forecast planning et al) may work well for output focussed organisations but successful ones comprise other moving parts (e.g. managing risk, innovation management or prioritisation amongst others).
Either way, this is a fascinating timeless read about Management and continues to feel relevant regardless of when you read it.
- Elements of High Output Management
- Output-oriented approach: apply manufacturing principles to the work of managers
- Organisational work is not an individual effort but a team effort; therefore the output of a manager is the output of the organisation’s units under his or her influence
- A team will perform well only if peak performance can be achieved within the individuals of that team
The book models management activities from the perspective of manufacturing and process management. Understanding the elements of production (inputs, outputs, inventory, manpower, quality controls) and developing metrics to monitor these are paramount to managing them effectively. Be cognisant of the limiting step in your production process.
Another important concept is the fact that material becomes more valuable as it moves through the production process. This is why, it’s a manager’s responsibility to fix things at the lowest-value stage of production.
Productivity is output divided by the labor required to generate that output. Managers should therefore focus on high-leverage activities, that is, the ones that produce more output for every unit of input.
In order to do that, a manager has limited time to invest, and should focus on:
- Information gathering: casual verbal exchanges, reading reports, visit particular factories or teams, etc.
- Decision making: provide factual inputs or opinions, debate pros/cons, review decisions made by others, ratify/veto, etc.
- Nudge others: stir someone or effort into one specific direction
A manager’s output = the output of his organisation + the output of the neighbouring organisation under his influence.
Most managerial activities are undertaken through meetings. There are two types of meetings:
- Process-oriented meetings: knowledge/information sharing; recurrent
- Staff / Team meeting
- Operational reviews
- Mission-oriented meetings: Ad-hoc meetings scheduled to reach a decision on a particular topic
- Step 1 — Establish projected need or demand: What will the environment demand from you, your business, or your organisation?
- Step 2 — Established your present status: What are you producing now? What will you be producing as your projects in the pipeline are completed?
- Step 3 — Compare and reconcile steps 1 and 2: What more (or less) do you need to do to produce what your environment will demand?
This section sounds very similar to the OKR framework that has been adopted at many companies. Companies have some high-level objectives and devise intermediate Key Results to deliver and move towards them.
Improving the Team’s Performance
The last past of the book focusses on the role of managers as “people managers”. A few concepts:
- A manager needs to set clear expectations and cultural values.
- In order to increase people’s motivation, a manager needs to understand the individual’s needs (i.e. expanding competence or achievement) and preferred way to measure this, whether it’s in absolute or relative terms (i.e. compared to others).
- Depending on the employee’s capacity to develop a task, a manager will be involved in either directing that person’s output or having a more task-oriented management style.
- Once expectations have been defined, performance is assessed by looking at the impact on 1) the organisation overall and 2) the personal impact on the output.
- On promotion, bear in mind the Peter principle, that is promoting someone until that person reaches their level of incompetence at a given level; don’t over-promote.
- A team member leaving, is the manager’s fault as this is likely related to unmanaged expectations on either side.
Remember that you can find other reviews from books I read here.
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