High Output Management by Andy Grove

High Output Management by Andy Grove

The Big Idea: Understand the principles of factory production and apply them to business management.

Chapter 1: The Basics of Production

  • Focus efforts on identifying and fixing the bottleneck (limiting step) in the workflow

Chapter 2: Managing The Breakfast Factory

  • Define good KPI’s.
  • Understand JIT inventory management.
  • Automate things to improve work leverage.

Chapter 3: Managerial Leverage

  • Judge a manager by the results of his team.
  • Results are what matter; not effort.
  • Most of a manager’s time is spent acquiring information, which is critical to making good decisions.
  • The most important resource for a manager is his time.
  • Being prepared for meetings saves a lot of other people’s time.
  • Investing time preventing someone important from quitting saves lots of time finding a replacement.
  • New employee orientations are important to do well since new employees are most impressionable.
  • Meddling too much can hurt performance in the long-run.
  • Delegation is another way to improve leverage.
  • When you delegate, you must still monitor and follow up.
  • When reviewing reports, ask to see the rough draft to add feedback as early as possible.
  • Batch similar tasks together to save time.
  • Use your calendar to manage your work and minimize interruptions.
  • Have some free-time projects to tackle during downtime.
  • Six to eight subordinates is about right.
  • Minimize interruptions and documenting FAQs, delegating, batching, and having fast access to information (KPI).

Chapter 4: Meetings

  • Meetings have a bad name, but they add lots of value if done well.
  • Regular meetings allow managers to batch decisions and batch information sharing.
  • One-on-ones are great for teaching, sharing information, and building relationship.
  • One-on-ones can start out weekly and move to monthly.
  • One-on-ones should be about an hour.
  • Staff meetings are to discuss issues and offer solutions.
  • Staff meetings should have an agenda and an open discussion session.
  • Mission oriented meetings are ad-hoc and designed to produce a key decision.

Chapter 5: Decisions

  • Be wary of groupthink in group decisions.
  • Be wary of peer-plus-one in group decisions, where everyone automatically agrees with the senior manager’s opinion.

Chapter 6: Planning

  • Understand basic factory production principles.
  • Apply Management By Objectives (Key Objective, Key Results) and review every quarter or every month.

Chapter 7: The Breakfast Factory Goes National (Scaling)

  • The central tradeoffs when scaling is centralization/decentralization.  (Buddhism/Catholicism in Scaling Up Excellence.)

Chapter 8: Hybrid Organizations

  • Mission-oriented companies are completely decentralized.  Units work towards the mission but operate independently.
  • Functional companies are completely centralized.
  • Most companies are a hybrid of mission-oriented and functional.

Chapter 9: Dual Reporting

  • Matrix management means employees can have two supervisors (their business unit supervisor and their functional unit supervisor.)
  • For example: a controller can report to the CFO and also to the business unit general manager.

Chapter 10: Modes of Control

  • Sometimes you will motivate by money, sometimes by contract, and sometimes by shared cultural values.

Chapter 11: The Sports Analogy

  • Management is a team activity.
  • Employee performance is a function of training and motivation.
  • Understand where on Maslow’s Hierarchy the employee is at.
  • Most people are competitive and motivation is a given in competitive sports, so try and turn work into a game by providing instant feedback and metrics.

Chapter 12: Task-Relevant Maturity

  • Provide detailed instructions to an inexperienced employee.
  • Establish monitoring and then give experienced employees freedom and autonomy.

Chapter 13: Performance Appraisals

  • Performance reviews are absolutely necessary.
  • Level, listen, and leave yourself out.
  • Document everything.
  • Give the review in writing, first, and then meet later in person to review.

Chapter 14: Two Difficult Tasks

  • Interviewing is just about impossible.
  • Do everything you can to save a valued employee who wants to quit.

Chapter 15: Compensation as Task-Relevant Feedback

  • Some employees view salary as a means to pay for living expenses.  Some employees view salary as a measuring stick to compare to others.
  • Performance bonuses should be partly individual, partly team, and partly organization.
  • Performance bonuses should be linked to objective metrics.

Chapter 16: Why Training Is the Boss’s Job

  • Don’t hire external trainers to train employees if you can do it yourself.
  • Managers should learn how to teach a formal course to employees.