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.