# High Output Management  ## Metadata - Author: [[Andrew S. Grove]] - Full Title: High Output Management - Category: #books ## Highlights - The consequence of all this is very simple. If the world operates as one big market, every employee will compete with every person anywhere in the world who is capable of doing the same job. There are a lot of them, and many of them are very hungry. ([Location 106](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=106)) - Tags: [[blue]] - The second idea is that the work of a business, of a government bureacracy, of most forms of human activity, is something pursued not by individuals but by teams. This idea is summed up in what I regard as the single most important sentence of this book: The output of a manager is the output of the organizational units under his or her supervision or influence. The question then becomes, what can managers do to increase the output of their teams? Put another way, what specifically should they be doing during the day when a virtually limitless number of possible tasks calls for their attention? ([Location 181](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=181)) - Tags: [[blue]] - High managerial productivity, I argue, depends largely on choosing to perform tasks that possess high leverage. ([Location 187](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=187)) - Tags: [[blue]] - A team will perform well only if peak performance is elicited from the individuals in it. ([Location 188](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=188)) - Tags: [[blue]] - As a general rule, you have to accept that no matter where you work, you are not an employee—you are in a business with one employee: yourself. You are in competition with millions of similar businesses. There are millions of others all over the world, picking up the pace, capable of doing the same work that you can do and perhaps more eager to do it. Now, you may be tempted to look around your workplace and point to your fellow workers as rivals, but they are not. They are outnumbered—a thousand to one, one hundred thousand to one, a million to one—by people who work for organizations that compete with your firm. So if you want to work and continue to work, you must continually dedicate yourself to retaining your individual competitive advantage. ([Location 216](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=216)) - Tags: [[blue]] - The central thought of my book is that the output of a manager is the output of his organization. In principle, every hour of your day should be spent increasing the output or the value of the output of the people whom you’re responsible for. ([Location 233](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=233)) - Tags: [[blue]] - A manager’s output = the output of his organization + the output of the neighboring organizations under his influence. ([Location 288](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=288)) - Tags: [[blue]] - the essential difference between a manager and an individual contributor. A manager’s skills and knowledge are only valuable if she uses them to get more leverage from her people. ([Location 290](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=290)) - Tags: [[blue]] - “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.” This insight enables a manager to dramatically focus her efforts. All you can do to improve the output of an employee is motivate and train. There is nothing else. ([Location 295](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=295)) - Tags: [[blue]] - If you only understand one thing about building products, you must understand that energy put in early in the process pays off tenfold and energy put in at the end of the program pays off negative tenfold. ([Location 300](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=300)) - Tags: [[blue]] - “Is it better to be a hands-on or hands-off manager?” It seems like a simple enough question, but it sorts out the 95 percent of managers who never think deeply about their craft from the 5 percent who do. The answer, as Andy explains, is that it depends. Specifically, it depends on the employee. If the employee is immature in the task, then hands-on training is essential. If the employee is more mature, then a delegate approach is warranted. ([Location 323](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=323)) - Tags: [[blue]] - 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. ([Location 332](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=332)) - Tags: [[blue]] - The task here encompasses the basic requirements of production. These are to build and deliver products in response to the demands of the customer at a scheduled delivery time, at an acceptable quality level, and at the lowest possible cost. ([Location 376](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=376)) - Tags: [[blue]] - Note: Delivery time should be agreed upon and transparent, quality should be as high as needed to attain required margins and maintain required brand imaging, but no higher, and cost should be minimized given these constraints - a manufacturer should accept the responsibility of delivering a product at the time committed to—in this case, by implication, about five to ten minutes after the customer arrives at our breakfast establishment. And we must make our breakfast at a cost that enables us to sell it at a competitive price and still make an acceptable profit. ([Location 383](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=383)) - Tags: [[blue]] - What must happen is illustrated opposite. To work back from the time of delivery, you’ll need to calculate the time required to prepare the three components to ensure that they are all ready simultaneously. First you must allow time to assemble the items on a tray. Next you must get the toast from the toaster and the coffee from the pot, as well as the egg out of the boiling water. Adding the required time to do this to the time needed to get and cook the egg defines the length of the entire process—called, in production jargon, the total throughput time. ([Location 390](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=390)) - Tags: [[blue]] - The key idea is that we construct our production flow by starting with the longest (or most difficult, or most sensitive, or most expensive) step and work our way back. ([Location 396](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=396)) - Tags: [[blue]] - Other production principles underlie the preparation of our breakfast. In the making of it, we find present the three fundamental types of production operations: process manufacturing, an activity that physically or chemically changes material just as boiling changes an egg; assembly, in which components are put together to constitute a new entity just as the egg, the toast, and the coffee together make a breakfast; and test, which subjects the components or the total to an examination of its characteristics. There are, for example, visual tests made at points in the breakfast production process: you can see that the coffee is steaming and that the toast is brown. ([Location 415](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=415)) - Tags: [[blue]] - alternatives do exist: equipment capacity, manpower, and inventory can be traded off against each other and then balanced against delivery time. ([Location 463](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=463)) - Tags: [[blue]] - Note: To achieve faster delivery time, you can: 1. Purchase more equipment (capex increase) 2. Hire more workers (increase in salaries) 3. Produce product IN ADVANCE OF demand (increased inventory waste) Any of the 3 options increases costs, decision is to weigh which has highest ROIC (ie. Most capital efficient) - in this and in other such situations there is a right answer, the one that can give you the best delivery time and product quality at the lowest possible cost. To find that right answer, you must develop a clear understanding of the trade-offs between the various factors—manpower, capacity, and inventory—and you must reduce the understanding to a quantifiable set of relationships. ([Location 465](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=465)) - Tags: [[blue]] - But continuous operation does not automatically mean lower cost and better quality. What would happen if the water temperature in the continuous egg-boiler quietly went out of specification? The entire work-in-process—all the eggs in the boiler—and the output of the machine from the time the temperature climbed or dropped to the time the malfunction was discovered becomes unusable. All the toast is also wasted because you don’t have any eggs to serve with it. How do you minimize the risk of a breakdown of this sort? Performing a functional test is one way. From time to time you open an egg as it comes out of the machine and check its quality. But you will have to throw away the egg tested. A second way involves in-process inspection, which can take many forms. You could, for example, simply insert a thermometer into the water so that the temperature could be easily and frequently checked. ([Location 481](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=481)) - Tags: [[blue]] - whenever possible, you should choose in-process tests over those that destroy product. ([Location 489](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=489)) - Tags: [[blue]] - A common rule we should always try to heed is to detect and fix any problem in a production process at the lowest-value stage possible. Thus, we should find and reject the rotten egg as it’s being delivered from our supplier rather than permitting the customer to find it. Likewise, if we can decide that we don’t want a college candidate at the time of the campus interview rather than during the course of a plant visit, we save the cost of the trip and the time of both the candidate and the interviewers. And we should also try to find any performance problem at the time of the unit test of the pieces that make up a compiler rather than in the course of the test of the final product itself. ([Location 505](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=505)) - Tags: [[blue]] - Note: This is why unit testing is important. Find bugs EARLY in the production process. You need to implement automated unit tests and GitHub actions to accomplish this - Just to get a fix on your output, you need a number of indicators; to get efficiency and high output, you need even more of them. The number of possible indicators you can choose is virtually limitless, but for any set of them to be useful, you have to focus each indicator on a specific operational goal. ([Location 537](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=537)) - Tags: [[blue]] - you’ll want to know your sales forecast for the day. ([Location 542](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=542)) - Tags: [[blue]] - Your next key indicator is raw material inventory. ([Location 545](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=545)) - Tags: [[blue]] - Another important piece of information is the condition of your equipment. ([Location 547](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=547)) - Tags: [[blue]] - Note: Health checks of deployed resources, unit and integration tests, etc - You also must get a fix on your manpower. ([Location 549](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=549)) - Tags: [[blue]] - you want to have some kind of quality indicator. ([Location 551](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=551)) - Tags: [[blue]] - Note: Track customer complaints, customer time in the app, etc - Because your business depends on people wanting what you sell, you must be concerned with the public’s opinion of your service. Perhaps you should set up a “customer complaint log” ([Location 552](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=552)) - Tags: [[blue]] - because indicators direct one’s activities, you should guard against overreacting. This you can do by pairing indicators, so that together both effect and counter-effect are measured. Thus, in the inventory example, you need to monitor both inventory levels and the incidence of shortages. A rise in the latter will obviously lead you to do things to keep inventories from becoming too low. ([Location 560](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=560)) - Tags: [[blue]] - Note: Yin and Yang. Two indicators indicating opposite extremes need to be kept in balance - The principle here was evident many times in the development of a compiler. Measuring the completion date of each software unit against its capability is one example. Watching this pair of indicators should help us to avoid working on the perfect compiler that will never be ready, and also to avoid rushing to finish one that is inadequate. In sum, joint monitoring is likely to keep things in the optimum middle ground. ([Location 563](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=563)) - Tags: [[blue]] - The first rule is that a measurement—any measurement—is better than none. But a genuinely effective indicator will cover the output of the work unit and not simply the activity involved. Obviously, you measure a salesman by the orders he gets (output), not by the calls he makes (activity). The second criterion for a good indicator is that what you measure should be a physical, countable thing. Examples of effective measures of administrative output are shown below. Because those listed here are all quantity or output indicators, their paired counterparts should stress the quality of work. ([Location 568](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=568)) - Tags: [[blue]] - Leading indicators give you one way to look inside the black box by showing you in advance what the future might look like. ([Location 610](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=610)) - Tags: [[blue]] - measurement against a standard makes you think through why the results were what they were, and not what the standard said they would be. ([Location 636](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=636)) - Tags: [[blue]] - indicators can be a big help in solving all types of problems. If something goes wrong, you will have a bank of information that readily shows all the parameters of your operation, allowing you to scan them for unhealthy departures from the norm. If you do not systematically collect and maintain an archive of indicators, you will have to do an awful lot of quick research to get the information you need, and by the time you have it, the problem is likely to have gotten worse. ([Location 654](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=654)) - Tags: [[blue]] - To build to forecast, you risk capital to respond to anticipated future demand in good order. ([Location 670](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=670)) - Tags: [[blue]] - Delivering a product that was built to forecast to a customer consists of two simultaneous processes, each with a separate time cycle. A manufacturing flow must occur in which the raw material moves through various production steps and finally enters the finished goods warehouse, as illustrated below. Simultaneously, a salesman finds a prospect and sells to that prospect, who eventually places an order with the manufacturer. Ideally, the order for the product and the product itself should arrive on the shipping dock at the same time. ([Location 676](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=676)) - Tags: [[blue]] - Note: Key takeaway is sales motions need to start before the product is ready - At Intel we try to match the two parallel flows with as much precision as possible. If there’s no match, we end up with a customer order that we can’t satisfy or with a finished product for which we have no customer. Either way we have problems. Obviously, if the match does come off, with a forecasted order becoming a real order, the customer’s requirements can be nicely satisfied with the factory’s product delivery. ([Location 683](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=683)) - Tags: [[blue]] - Because neither the sales flow nor the manufacturing flow is completely predictable, we should deliberately build a reasonable amount of “slack” into the system. And inventory is the most obvious place for it. ([Location 691](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=691)) - Tags: [[blue]] - Ideally, inventory should be kept at the lowest-value stage, as we’ve learned before, like raw eggs kept at the breakfast factory. Also, the lower the value, the more production flexibility we obtain for a given inventory cost. ([Location 694](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=694)) - Tags: [[blue]] - Though an old and honored way of operating “widget factories,” the application of forecasting techniques is hardly common as a way to control administrative work. Such work has up to now been considered qualitatively different from work in a widget factory, and has also lacked objective performance standards needed to size or scale the work unit. But if we have carefully chosen indicators that characterize an administrative unit and watch them closely, we are ready to apply the methods of factory control to administrative work. ([Location 700](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=700)) - Tags: [[blue]] - There is no question that having standards and believing in them and staffing an administrative unit objectively using forecasted workloads will help you to maintain and enhance productivity. ([Location 708](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=708)) - Tags: [[blue]] - To get acceptable quality at the lowest cost, it is vitally important to reject defective material at a stage where its accumulated value is at the lowest possible level. ([Location 713](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=713)) - Tags: [[blue]] - In short, reject before investing further value. ([Location 715](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=715)) - Tags: [[blue]] - Note: Code quality for ProMap is low - this suggests a total refactor + high test coverage before building more features on top of the technical debt - In the language of production, the lowest-value-point inspection where we inspect raw material is called incoming material inspection or receiving inspection. If we again use a black box to represent our production process, inspections that occur at intervening points within it are called, logically enough, in-process inspections. Finally, the last possible point of inspection, when the product is ready to be shipped to the customer, is called final inspection or outgoing quality inspection. ([Location 715](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=715)) - Tags: [[blue]] - While in most instances the decision to accept or reject defective material at a given inspection point is an economic one, one should never let substandard material proceed when its defects could cause a complete failure—a reliability problem—for our customer. Simply put, because we can never assess the consequences of an unreliable product, we can’t make compromises when it comes to reliability. ([Location 728](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=728)) - Tags: [[blue]] - Note: Anything shipped to the customer needs to be THOROUGHLY tested. Defects cannot make it into the customers’ hands - one should approach the need to inspect recognizing that a balance exists between the desired result of the inspection, improved quality, and minimum disturbance to the production process itself. ([Location 736](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=736)) - Tags: [[blue]] - Let’s consider a few techniques commonly used to balance the two needs. There is a gate-like inspection and a monitoring step. In the former, all material is held at the “gate” until the inspection tests are completed. If the material passes, it is moved on to the next stage in the production process; if the material fails, it will be returned to an earlier stage, where it will be reworked or scrapped. In the latter, a sample of the material is taken, and if it fails, a notation is made from which a failure rate is calculated. The bulk of the material is not held as the sample is taken but continues to move through the manufacturing process. ([Location 738](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=738)) - Tags: [[blue]] - Another way to lower the cost of quality assurance is to use variable inspections. Because quality levels vary over time, it is only common sense to vary how often we inspect. For instance, if for weeks we don’t find problems, it would seem logical to check less often. But if problems begin to develop, we can test ever more frequently until quality again returns to the previous high levels. The advantage here is still lower costs and even less interference with the production flow. ([Location 749](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=749)) - Tags: [[blue]] - Later, when we examine managerial productivity, we’ll see that when a manager digs deeply into a specific activity under his jurisdiction, he’s applying the principle of variable inspection. If the manager examined everything his various subordinates did, he would be meddling, which for the most part would be a waste of his time. Even worse, his subordinates would become accustomed to not being responsible for their own work, knowing full well that their supervisor will check everything out closely. The principle of variable inspection applied to managerial work nicely skirts both problems, and, as we shall see, gives us an important tool for improving managerial productivity. ([Location 774](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=774)) - Tags: [[blue]] - The workings of our black box can furnish us with the simplest and most useful definition of productivity. The productivity of any function occurring within it is the output divided by the labor required to generate the output. Thus, one way to increase productivity is to do whatever we are now doing, but faster. This could be done by reorganizing the work area or just by working harder. Here we’ve not changed what work we do, we’ve just instituted ways to do it faster—getting more activities per employee-hour to go on inside the black box. Because the output of the black box is proportional to the activity that occurs within it, we will get more output per hour. There is a second way to improve productivity. We can change the nature of the work performed: what we do, not how fast we do it. We want to increase the ratio of output to activity, thereby increasing output even if the activity per employee-hour remains the same. As the slogan has it, we want to “work smarter, not harder.” ([Location 780](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=780)) - Tags: [[blue]] - Here I’d like to introduce the concept of leverage, which is the output generated by a specific type of work activity. An activity with high leverage will generate a high level of output; an activity with low leverage, a low level of output. For example, a waiter able to boil two eggs and operate two toasters can deliver two breakfasts for almost the same amount of work as one. His output per activity, and therefore his leverage, is high. A waiter who can handle only one egg and one toaster at a time possesses lower output and leverage. The software engineer using a programming language rather like English, later to be translated by a compiler, can solve many problems per hour of programming. His output and leverage are high. A software engineer using a more cumbersome programming method of ones and zeros will require many more hours to solve the same number of problems. His output and leverage are low. Thus, a very important way to increase productivity is to arrange the work flow inside our black box so that it will be characterized by high output per activity, which is to say high-leverage activities. Automation is certainly one way to improve the leverage of all types of work. Having machines to help them, human beings can create more output. But in both widget manufacturing and administrative work, something else can also increase the productivity of the black box. This is called work simplification. To get leverage this way, you first need to create a flow chart of the production process as it exists. Every single step must be shown on it; no step should be omitted in order to pretty things up on paper. Second, count the number of steps in the flow chart so that you know how many you started with. Third, set a rough target for reduction of the number of steps. In the first round of work simplification, our experience shows that you can reasonably expect a 30 to 50 percent reduction. To implement the actual simplification, you must question why each step is performed. Typically, you will find that many steps exist in your work flow for no good reason. Often they are there by tradition or because formal procedure ordains it, and nothing practical requires their inclusion. ([Location 794](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=794)) - Tags: [[blue]] - the principle of work simplification is hardly new in the widget manufacturing arts. In fact, this is one of the things industrial engineers have been doing for a hundred years. But the application of the principle to improve the productivity of the “soft professions”—the administrative, professional, and managerial workplace—is new and slow to take hold. The major problem to be overcome is defining what the output of such work is or should be. As we will see, in the work of the soft professions, it becomes very difficult to distinguish between output and activity. And as noted, stressing output is the key to improving productivity, while looking to increase activity can result in just the opposite. ([Location 813](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=813)) - Tags: [[blue]] - output is a fully recovered, healed patient. We can sum matters up with the proposition that: A manager’s output = The output of his organization + The output of the neighboring organizations under his influence Why? Because business and education and even surgery represent work done by teams. ([Location 835](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=835)) - Tags: [[blue]] - If the manager is a knowledge specialist, a know-how manager, his potential for influencing “neighboring” organizations is enormous. The internal consultant who supplies needed insight to a group struggling with a problem will affect the work and the output of the entire group. ([Location 841](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=841)) - Tags: [[blue]] - the key definition here is that the output of a manager is a result achieved by a group either under her supervision or under her influence. While the manager’s own work is clearly very important, that in itself does not create output. Her organization does. ([Location 848](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=848)) - Tags: [[blue]] - It is important to understand that a manager will find himself engaging in an array of activities in order to affect output. As the middle managers I queried said, a manager must form opinions and make judgments, he must provide direction, he must allocate resources, he must detect mistakes, and so on. All these are necessary to achieve output. But output and activity are by no means the same thing. ([Location 853](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=853)) - Tags: [[blue]] - My day always ends when I’m tired and ready to go home, not when I’m done. I am never done. Like a housewife’s, a manager’s work is never done. There is always more to be done, more that should be done, always more than can be done. ([Location 937](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=937)) - Tags: [[blue]] - A manager must keep many balls in the air at the same time and shift his energy and attention to activities that will most increase the output of his organization. In other words, he should move to the point where his leverage will be the greatest. ([Location 939](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=939)) - Tags: [[blue]] - much of my day is spent acquiring information. And as you can also see, I use many ways to get it. I read standard reports and memos but also get information ad hoc. I talk to people inside and outside the company, managers at other firms or financial analysts or members of the press. Customer complaints, both external and internal, are also a very important source of information. ([Location 941](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=941)) - Tags: [[blue]] - reports also have another totally different function. As they are formulated and written, the author is forced to be more precise than he might be verbally. Hence their value stems from the discipline and the thinking the writer is forced to impose upon himself as he identifies and deals with trouble spots in his presentation. Reports are more a medium of self-discipline than a way to communicate information. Writing the report is important; reading it often is not. ([Location 952](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=952)) - Tags: [[blue]] - decisions can be separated into two kinds. The forward-looking sort are made, for example, in the capital authorization process. Here we allocate the financial resources of the company among various future undertakings. The second type is made as we respond to a developing problem or a crisis, which can either be technical (a quality control problem, for example) or involve people (talking somebody out of quitting). ([Location 989](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=989)) - Tags: [[blue]] - It’s obvious that your decision-making depends finally on how well you comprehend the facts and issues facing your business. This is why information-gathering is so important in a manager’s life. Other activities—conveying information, making decisions, and being a role model for your subordinates—are all governed by the base of information that you, the manager, have about the tasks, the issues, the needs, and the problems facing your organization. In short, information-gathering is the basis of all other managerial work, which is why I choose to spend so much of my day doing it. ([Location 992](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=992)) - Tags: [[blue]] - You often do things at the office designed to influence events slightly, maybe making a phone call to an associate suggesting that a decision be made in a certain way, or sending a note or a memo that shows how you see a particular situation, or making a comment during an oral presentation. In such instances you may be advocating a preferred course of action, but you are not issuing an instruction or a command. Yet you’re doing something stronger than merely conveying information. Let’s call it “nudging” because through it you nudge an individual or a meeting in the direction you would like. This is an immensely important managerial activity in which we engage all the time, and it should be carefully distinguished from decision-making that results in firm, clear directives. In reality, for every unambiguous decision we make, we probably nudge things a dozen times. ([Location 996](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=996)) - Tags: [[blue]] - In principle more money, more manpower, or more capital can always be made available, but our own time is the one absolutely finite resource we each have. Its allocation and use therefore deserve considerable attention. How you handle your own time is, in my view, the single most important aspect of being a role model and leader. ([Location 1016](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=1016)) - Tags: [[blue]] - Before you are horrified by how much time I spend in meetings, answer a question: which of the activities—information-gathering, information-giving, decision-making, nudging, and being a role model—could I have performed outside a meeting? The answer is practically none. Meetings provide an occasion for managerial activities. Getting together with others is not, of course, an activity—it is a medium. You as a manager can do your work in a meeting, in a memo, or through a loudspeaker for that matter. But you must choose the most effective medium for what you want to accomplish, and that is the one that gives you the greatest leverage. ([Location 1021](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=1021)) - Tags: [[blue]] - Leverage is the measure of the output generated by any given managerial activity. Accordingly, managerial output can be linked to managerial activity by the equation: Managerial Output = Output of organization   = L1 × A1 + L2 × A2 +… This equation says that for every activity a manager performs—A1, A2, and so on—the output of the organization should increase by some degree. The extent to which that output is thereby increased is determined by the leverage of that activity—L1, L2, and so on. A manager’s output is thus the sum of the result of individual activities having varying degrees of leverage. Clearly the key to high output means being sensitive to the leverage of what you do during the day. ([Location 1028](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=1028)) - Tags: [[blue]] - Managerial productivity—that is, the output of a manager per unit of time worked—can be increased in three ways: 1.  Increasing the rate with which a manager performs his activities, speeding up his work. 2.  Increasing the leverage associated with the various managerial activities. 3.  Shifting the mix of a manager’s activities from those with lower to those with higher leverage. ([Location 1039](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=1039)) - Tags: [[blue]] - HIGH-LEVERAGE ACTIVITIES These can be achieved in three basic ways: •  When many people are affected by one manager. •  When a person’s activity or behavior over a long period of time is affected by a manager’s brief, well-focused set of words or actions. •  When a large group’s work is affected by an individual supplying a unique, key piece of knowledge or information. ([Location 1044](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=1044)) - Tags: [[blue]] - Each time a manager imparts his knowledge, skills, or values to a group, his leverage is high, as members of the group will carry what they learn to many others. ([Location 1064](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=1064)) - Tags: [[blue]] - A manager can also exert high leverage by engaging in an activity that takes him only a short time, but that affects another person’s performance over a long time. A performance review represents a good example of this. With the few hours’ work that a manager spends preparing and delivering the review, he can affect the work of its recipient enormously. Here too a manager can exert either positive or negative leverage. A subordinate can be motivated and even redirected in his efforts, or the review can discourage and demoralize him for who knows how long. ([Location 1074](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=1074)) - Tags: [[blue]] - Examples of high negative leverage abound. After going through the annual planning process, an Intel manager saw that, in spite of successful cost reduction efforts in the prior year, his division was still not going to make any money in the coming year. The manager became depressed. Though he didn’t realize it, he almost immediately began to affect people around him and soon depression spread throughout his organization. He snapped out of it only when someone on his staff finally told him what he was doing to the people under him. Another example is waffling, when a manager puts off a decision that will affect the work of other people. In effect, the lack of a decision is the same as a negative decision; no green light is a red light, and work can stop for a whole organization. Both the depressed and the waffling manager can have virtually unlimited negative leverage. If people are badly affected by a poor sales training effort, the situation can be handled by retraining the group. But the negative leverage produced by depression and waffling is very hard to counter because their impact on an organization is both so pervasive and so elusive. ([Location 1081](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=1081)) - Tags: [[blue]] - Take another example. An Intel development engineer who has uniquely detailed knowledge of a particular manufacturing process effectively controls how it is used. Since the process will eventually provide the foundation for the work of many product designers all over the company, the leverage the development engineer exerts is enormous. The same is true for a geologist in an oil company or an actuary in an insurance firm. All are specialists whose work is important for the work of their organization at large. The person who comprehends the critical facts or has the critical insights—the “knowledge specialist” or the “know-how manager”—has tremendous authority and influence on the work of others, and therefore very high leverage. ([Location 1100](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=1100)) - Tags: [[blue]] - The art of management lies in the capacity to select from the many activities of seemingly comparable significance the one or two or three that provide leverage well beyond the others and concentrate on them. ([Location 1105](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=1105)) - Tags: [[blue]] - Because managerial time has a hierarchy of values, delegation is an essential aspect of management. The “delegator” and “delegatee” must share a common information base and a common set of operational ideas or notions on how to go about solving problems, a requirement that is frequently not met. Unless both parties share the relevant common base, the delegatee can become an effective proxy only with specific instructions. As in meddling, where specific activities are prescribed in detail, this produces low managerial leverage. ([Location 1112](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=1112)) - Tags: [[blue]] - delegation without follow-through is abdication. You can never wash your hands of a task. Even after you delegate it, you are still responsible for its accomplishment, and monitoring the delegated task is the only practical way for you to ensure a result. Monitoring is not meddling, but means checking to make sure an activity is proceeding in line with expectations. Because it is easier to monitor something with which you are familiar, if you have a choice you should delegate those activities you know best. ([Location 1123](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=1123)) - Tags: [[blue]] - Monitoring the results of delegation resembles the monitoring used in quality assurance. We should apply quality assurance principles and monitor at the lowest-added-value stage of the process. For example, review rough drafts of reports that you have delegated; don’t wait until your subordinates have spent time polishing them into final form before you find out that you have a basic problem with the contents. A second principle applies to the frequency with which you check your subordinates’ work. A variable approach should be employed, using different sampling schemes with various subordinates; you should increase or decrease your frequency depending on whether your subordinate is performing a newly delegated task or one that he has experience handling. How often you monitor should not be based on what you believe your subordinate can do in general, but on his experience with a specific task and his prior performance with it—his task-relevant maturity, something I’ll talk about in detail later. As the subordinate’s work improves over time, you should respond with a corresponding reduction in the intensity of the monitoring. ([Location 1132](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=1132)) - Tags: [[blue]] - The most common approach to increasing a manager’s productivity—his output over time—has been time-management techniques, which try to reduce the denominator on both sides of this equation. Any number of consultants will tell a manager that the way to higher productivity is to handle a piece of paper only once, to hold only stand-up meetings (which will presumably be short), and to turn his desk so that he presents his back to the door. ([Location 1152](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=1152)) - Tags: [[blue]] - Set-up time has many parallels in managerial work. For example, once we have prepared a set of illustrations for a training class, we will obviously increase our productivity if we can use the same set over and over again with other classes or groups. Similarly, if a manager has a number of reports to read or a number of performance reviews to approve, he should set aside a block of time and do a batch of them together, one after the other, to maximize the use of the mental set-up time needed for the task. ([Location 1166](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=1166)) - Tags: [[blue]] - What is the medium of a manager’s forecast? It is something very simple: his calendar. Most people use their calendars as a repository of “orders” that come in. Someone throws an order to a manager for his time, and it automatically shows up on his calendar. This is mindless passivity. To gain better control of his time, the manager should use his calendar as a “production” planning tool, taking a firm initiative to schedule work that is not time-critical between those “limiting steps” in the day. ([Location 1174](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=1174)) - Tags: [[blue]] - To use your calendar as a production-planning tool, you must accept responsibility for two things: 1.  You should move toward the active use of your calendar, taking the initiative to fill the holes between the time-critical events with non-time-critical though necessary activities. 2.  You should say “no” at the outset to work beyond your capacity to handle. It is important to say “no” earlier rather than later because we’ve learned that to wait until something reaches a higher value stage and then abort due to lack of capacity means losing more money and time. You can obviously say “no” either explicitly or implicitly, because by not delivering you end up saying what amounts to “no.” Remember too that your time is your one finite resource, and when you say “yes” to one thing you are inevitably saying “no” to another. ([Location 1184](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=1184)) - Tags: [[blue]] - Note: Add time blocks in your calendar for deep work. Proactively say “no” to meetings. Batch meetings into one part of the day to reduce the cost of mental switching - The same thing can be done for managerial work. There is an optimum degree of loading, with enough slack built in so that one unanticipated phone call will not ruin your schedule for the rest of the day. You need some slack. ([Location 1196](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=1196)) - Tags: [[blue]] - A manager should carry a raw material inventory in terms of projects. This is not to be confused with his work-in-process inventory, because that, like eggs in a continuous boiler, tends to spoil or become obsolete over time. Instead this inventory should consist of things you need to do but don’t need to finish right away—discretionary projects, the kind the manager can work on to increase his group’s productivity over the long term. Without such an inventory of projects, a manager will most probably use his free time meddling in his subordinates’ work. ([Location 1198](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=1198)) - Tags: [[blue]] - As a rule of thumb, a manager whose work is largely supervisory should have six to eight subordinates; three or four are too few and ten are too many. This range comes from a guideline that a manager should allocate about a half day per week to each of his subordinates. ([Location 1209](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=1209)) - Tags: [[blue]] - About twenty middle managers at Intel were once asked to be part of an experiment. After pairing up, they tried some role-playing in which one manager was to define the problem most limiting his output and the other was to be a consultant who would analyze the problem and propose solutions. The most common problem cited was uncontrolled interruptions, which in remarkably uniform fashion affected both supervisory and know-how managers. Everyone felt that the interruptions got in the way of his “own” work. Interruptions had a common source, most frequently coming from subordinates and from people outside the managers’ immediate organization but whose work the managers influenced. For those in manufacturing, the interruptions most often came from production operators, and for marketing people, from outside customers: in short, from the consumers of the middle managers’ authority and information. The most frequently proposed solutions were not very practical. The idea mentioned most often was to create blocks of time for individual work by hiding physically. But this is a less than happy answer, because the interrupters obviously have legitimate problems, and if the manager responded by hiding, these would pile up. One “solution” was a suggestion that customers not call marketing managers at certain hours. No good. There are better ways. Let’s apply a production concept. Manufacturers turn out standard products. By analogy, if you can pin down what kind of interruptions you’re getting, you can prepare standard responses for those that pop up most often. Customers don’t come up with totally new questions and problems day in and day out, and because the same ones tend to surface repeatedly, a manager can reduce time spent handling interruptions using standard responses. Having them available also means that a manager can delegate much of the job to less experienced personnel. Also, if you use the production principle of batching—that is, handling a group of similar chores at one time—many interruptions that come from your subordinates can be accumulated and handled not randomly, but at staff and at one-on-one meetings, the subject of the next chapter. If such meetings are held regularly, people can’t protest too much if they’re asked to batch questions and problems for scheduled times, instead of interrupting you whenever they want. ([Location 1238](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=1238)) - Tags: [[blue]] - a manager should try to force his frequent interrupters to make an active decision about whether an issue can wait. So, instead of going into hiding, a manager can hang a sign on his door that says, “I am doing individual work. Please don’t interrupt me unless it really can’t wait until 2:00.” Then hold an open office hour, and be completely receptive to anybody who wants to see you. The key is this: understand that interrupters have legitimate problems that need to be handled. ([Location 1261](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=1261)) - Tags: [[blue]] - I will assert again that a meeting is nothing less than the medium through which managerial work is performed. That means we should not be fighting their very existence, but rather using the time spent in them as efficiently as possible. ([Location 1277](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=1277)) - Tags: [[blue]] - The two basic managerial roles produce two basic kinds of meetings. In the first kind of meeting, called a process-oriented meeting, knowledge is shared and information is exchanged. Such meetings take place on a regularly scheduled basis. The purpose of the second kind of meeting is to solve a specific problem. Meetings of this sort, called mission-oriented, frequently produce a decision. They are ad hoc affairs, not scheduled long in advance, because they usually can’t be. ([Location 1279](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=1279)) - Tags: [[blue]] - Process-Oriented Meetings To make the most of this kind of meeting, we should aim to infuse it with regularity. In other words, the people attending should know how the meeting is run, what kinds of substantive matters are discussed, and what is to be accomplished. It should be designed to allow a manager to “batch” transactions, to use the same “production” set-up time and effort to take care of many similar managerial tasks. Moreover, given the regularity, you and the others attending can begin to forecast the time required for the kinds of work to be done. ([Location 1283](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=1283)) - Tags: [[blue]] - At Intel, a one-on-one is a meeting between a supervisor and a subordinate, and it is the principal way their business relationship is maintained. Its main purpose is mutual teaching and exchange of information. ([Location 1290](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=1290)) - Tags: [[blue]] - When Intel was a young company, I realized that even though I was expected to supervise both engineering and manufacturing, I knew very little about the company’s first product line, memory devices. I also didn’t know much about manufacturing techniques, my background having been entirely in semiconductor device research. So two of my associates, both of whom reported to me, agreed to give me private lessons on memory design and manufacturing. These took place by appointment, and involved a teacher/subordinate preparing for each; during the session the pupil/supervisor busily took notes, trying to learn. As Intel grew, the initial tone and spirit of such one-on-ones endured and grew. ([Location 1298](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=1298)) - Tags: [[blue]] - How often should you have one-on-ones? Or put another way, how do you decide how often somebody needs such a meeting? The answer is the job- or task-relevant maturity of each of your subordinates. In other words, how much experience does a given subordinate have with the specific task at hand? This is not the same as the experience he has in general or how old he is. As we will see later, the most effective management style in a specific instance varies from very close to very loose supervision as a subordinate’s task maturity increases. Accordingly, you should have one-on-ones frequently (for example, once a week) with a subordinate who is inexperienced in a specific situation and less frequently (perhaps once every few weeks) with an experienced veteran. ([Location 1305](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=1305)) - Tags: [[blue]] - I feel that a one-on-one should last an hour at a minimum. Anything less, in my experience, tends to make the subordinate confine himself to simple things that can be handled quickly. ([Location 1316](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=1316)) - Tags: [[blue]] - A key point about a one-on-one: It should be regarded as the subordinate’s meeting, with its agenda and tone set by him. There’s good reason for this. Somebody needs to prepare for the meeting. The supervisor with eight subordinates would have to prepare eight times; the subordinate only once. So the latter should be asked to prepare an outline, which is very important because it forces him to think through in advance all of the issues and points he plans to raise. ([Location 1322](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=1322)) - Tags: [[blue]] - What should be covered in a one-on-one? We can start with performance figures, indicators used by the subordinate, such as incoming order rates, production output, or project status. Emphasis should be on indicators that signal trouble. The meeting should also cover anything important that has happened since the last meeting: current hiring problems, people problems in general, organizational problems and future plans, and—very, very important—potential problems. Even when a problem isn’t tangible, even if it’s only an intuition that something’s wrong, a subordinate owes it to his supervisor to tell him, because it triggers a look into the organizational black box. The most important criterion governing matters to be talked about is that they be issues that preoccupy and nag the subordinate. These are often obscure and take time to surface, consider, and resolve. ([Location 1328](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=1328)) - Tags: [[blue]] - “The good time users among managers do not talk to their subordinates about their problems but they know how to make the subordinates talk about theirs.” How is this done? By applying 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. He should try to keep the flow of thoughts coming by prompting the subordinate with queries until both feel satisfied that they have gotten to the bottom of a problem. ([Location 1336](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=1336)) - Tags: [[blue]] - both the supervisor and subordinate should have a copy of the outline and both should take notes on it, which serves a number of purposes. I take notes in just about all circumstances, and most often end up never looking at them again. I do it to keep my mind from drifting and also to help me digest the information I hear and see. Since I take notes in outline form, I am forced to categorize the information logically, which helps me to absorb it. Equally important is what “writing it down” symbolizes. Many issues in a one-on-one lead to action required on the part of the subordinate. When he takes a note immediately following the supervisor’s suggestion, the act implies a commitment, like a handshake, that something will be done. The supervisor, also having taken notes, can then follow up at the next one-on-one. ([Location 1341](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=1341)) - Tags: [[blue]] - Long-distance telephone one-on-ones have become necessary because many organizations are now spread out geographically. But these can work well enough with proper preparation and attention: the supervisor must have the outline before the meeting begins, both parties should take notes, and so on. Because you can’t see the other participant in the meeting, note-taking can’t work in the same way as in a face-to-face meeting. Exchanging notes after the meeting is a way to make sure each knows what the other committed himself to do. ([Location 1355](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=1355)) - Tags: [[blue]] - What is the leverage of the one-on-one? Let’s say you have a one-on-one with your subordinate every two weeks, and it lasts one and a half hours. Ninety minutes of your time can enhance the quality of your subordinate’s work for two weeks, or for some eighty-plus hours, and also upgrade your understanding of what he’s doing. Clearly, one-on-ones can exert enormous leverage. This happens through the development of a common base of information and similar ways of doing and handling things between the supervisor and the subordinate. And this, as noted, is the only way in which efficient and effective delegation can take place. ([Location 1362](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=1362)) - Tags: [[blue]] - A staff meeting is one in which a supervisor and all of his subordinates participate, and which therefore presents an opportunity for interaction among peers. ([Location 1382](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=1382)) - Tags: [[blue]] - What should be discussed at a staff meeting? Anything that affects more than two of the people present. If the meeting degenerates into a conversation between two people working on a problem affecting only them, the supervisor should break it off and move on to something else that will include more of the staff, while suggesting that the two continue their exchange later. ([Location 1395](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=1395)) - Tags: [[blue]] - What is the role of the supervisor in the staff meeting—a leader, observer, expediter, questioner, decision-maker? The answer, of course, is all of them. Please note that lecturer is not listed. A supervisor should never use staff meetings to pontificate, which is the surest way to undermine free discussion and hence the meeting’s basic purpose. ([Location 1402](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=1402)) - Tags: [[blue]] - OPERATION REVIEWS This is the medium of interaction for people who don’t otherwise have much opportunity to deal with one another. The format here should include formal presentations in which managers describe their work to other managers who are not their immediate supervisors, and to peers in other parts of the company. The basic purpose of an operation review at Intel is to keep the teaching and learning going on between employees several organizational levels apart—people who don’t have one-on-ones or staff meetings with each other. ([Location 1415](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=1415)) - Tags: [[blue]] - The supervisor of the presenting managers—an Intel divisional marketing manager, let’s say—should organize the meeting. He should help the presenters decide what issues should be talked about and what should not, what should be emphasized, and what level of detail to go into. The supervisor should also be in charge of housekeeping (the meeting room, visual materials, invitations, and so on). Finally, he should be the timekeeper, scheduling the presentations and keeping them moving along. ([Location 1424](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=1424)) - Tags: [[blue]] - The reviewing manager is the senior supervisor at whom the review is aimed—like the general manager of an Intel division. He has a very important although more subtle role to play: he should ask questions, make comments, and in general impart the appropriate spirit to the meeting. He is the catalyst needed to provoke audience participation, and by his example he should encourage free expression. He should never preview the material, since that will keep him from reacting spontaneously. Because the senior supervisor is a role model for the junior managers present, he should take his role at the review extremely seriously. ([Location 1430](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=1430)) - Tags: [[blue]] - The people presenting the reviews—a group of marketing supervisors, for example—should use visual aids such as overhead transparencies to the extent possible. People are endowed with eyes as well as ears, and the simultaneous use of both definitely helps the audience understand the points being made. But care must be taken, because all too frequently a presenter gets so obsessed with getting through all of his visual material that his message gets lost even while all his charts get flipped. As a rule of thumb, I would recommend four minutes of presentation and discussion time per visual aid, which can include tables, numbers, or graphics. The presenter must highlight whatever he wants to emphasize with a color pen or pointer. Throughout, a presenter has to watch his audience like a hawk. Facial expressions and body language, among other things, will tell him if people are getting the message, if he needs to stop and go over something again, or if he is boring them and should speed up. ([Location 1435](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=1435)) - Tags: [[blue]] - Unlike a process-oriented meeting, which is a regularly scheduled affair held to exchange knowledge and information, the mission-oriented meeting is usually held ad hoc and is designed to produce a specific output, frequently a decision. ([Location 1450](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=1450)) - Tags: [[blue]] - the chairman must have a clear understanding of the meeting’s objective—what needs to happen and what decision has to be made. The absolute truth is that if you don’t know what you want, you won’t get it. So before calling a meeting, ask yourself: What am I trying to accomplish? Then ask, is a meeting necessary? Or desirable? Or justifiable? Don’t call a meeting if all the answers aren’t yes. ([Location 1456](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=1456)) - Tags: [[blue]] - even if you’re just an invited participant, you should ask yourself if the meeting—and your attendance—is desirable and justified. Tell the chairman—the person who invited you—if you do not feel it is. Determine the purpose of a meeting before committing your time and your company’s resources. Get it called off early, at a low-value-added stage, if a meeting makes no sense, and find a less costly way (a one-on-one meeting, a telephone call, a note) to pursue the matter. ([Location 1462](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=1462)) - Tags: [[blue]] - Assuming the meeting does need to be held, the chairman faces a set of obligations. The first one has to do with attendance. As the chairman, you must identify who should attend and then try to get those people to come. It is not enough to ask people and hope for the best; you need to follow up and get commitments. If someone invited can’t make it himself, see to it that he sends a person with the power to speak for him. ([Location 1465](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=1465)) - Tags: [[blue]] - The chairman is also responsible for maintaining discipline. It is criminal for him to allow people to be late and waste everyone’s time. Remember, wasting time here really means that you are wasting the company’s money, with the meter ticking away at the rate of $100 per hour per person. Do not worry about confronting the late arriver. Just as you would not permit a fellow employee to steal a piece of office equipment worth $2,000, you shouldn’t let anyone walk away with the time of his fellow managers. ([Location 1471](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=1471)) - Tags: [[blue]] - Once the meeting is over, the chairman must nail down exactly what happened by sending out minutes that summarize the discussion that occurred, the decision made, and the actions to be taken. And it’s very important that attendees get the minutes quickly, before they forget what happened. The minutes should also be as clear and as specific as possible, telling the reader what is to be done, who is to do it, and when. All this may seem like too much trouble, but if the meeting was worth calling in the first place, the work needed to produce the minutes is a small additional investment (an activity with high leverage) to ensure that the full benefit is obtained from what was done. ([Location 1500](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=1500)) - Tags: [[blue]] - Ideally, a manager should never have to call an ad hoc, mission-oriented meeting, because if all runs smoothly, everything is taken care of in regularly scheduled, process-oriented meetings. In practice, however, if all goes well, routine meetings will take care of maybe 80 percent of the problems and issues; the remaining 20 percent will still have to be dealt with in mission-oriented meetings. Remember, Peter Drucker said that if people spend more than 25 percent of their time in meetings, it is a sign of malorganization. I would put it another way: the real sign of malorganization is when people spend more than 25 percent of their time in ad hoc mission-oriented meetings. ([Location 1505](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=1505)) - Tags: [[blue]] - even if today’s veteran manager was once an outstanding engineer, he is not now the technical expert he was when he joined the company. At Intel, anyway, we managers get a little more obsolete every day. So a business like ours has to employ a decision-making process unlike those used in more conventional industries. If Intel used people holding old-fashioned position power to make all its decisions, decisions would be made by people unfamiliar with the technology of the day. And in general, the faster the change in the know-how on which the business depends or the faster the change in customer preferences, the greater the divergence between knowledge and position power is likely to be. If your business depends on what it knows to survive and prosper, what decision-making mechanism should you use? The key to success is again the middle manager, who not only is a link in the chain of command but also can see to it that the holders of the two types of power mesh smoothly. ([Location 1525](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=1525)) - Tags: [[blue]] - A journalist puzzled by our management style once asked me, “Mr. Grove, isn’t your company’s emphasis on visible signs of egalitarianism such as informal dress, partitions instead of offices, and the absence of other obvious perks like reserved parking spaces, just so much affectation?” My answer was that this is not affectation but a matter of survival. In our business we have to mix knowledge-power people with position-power people daily, and together they make decisions that could affect us for years to come. If we don’t link our engineers with our managers in such a way as to get good decisions, we can’t succeed in our industry. Now, status symbols most certainly do not promote the flow of ideas, facts, and points of view. What appears to be a matter of style really is a matter of necessity. ([Location 1573](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=1573)) - Tags: [[blue]] - Peers tend to look for a more senior manager, even if he is not the most competent or knowledgeable person involved, to take over and shape a meeting. Why? Because most people are afraid to stick their necks out. ([Location 1592](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=1592)) - Tags: [[blue]] - One thing that paralyzes both knowledge and position power possessors is the fear of simply sounding dumb. For the senior person, this is likely to keep him from asking the questions he should ask. The same fear will make other participants merely think their thoughts privately rather than articulate them for all to hear; at best they will whisper what they have to say to a neighbor. As a manager, you should remind yourself that each time an insight or fact is withheld and an appropriate question is suppressed, the decision-making process is less good than it might have been. ([Location 1611](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=1611)) - Tags: [[blue]] - Your general planning process should consist of analogous thinking. Step 1 is to establish projected need or demand: What will the environment demand from you, your business, or your organization? Step 2 is to establish your present status: What are you producing now? What will you be producing as your projects in the pipeline are completed? Put another way, where will your business be if you do nothing different from what you are now doing? Step 3 is to compare and reconcile steps 1 and 2. Namely, what more (or less) do you need to do to produce what your environment will demand? ([Location 1715](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=1715)) - Tags: [[blue]] - Just what is your environment? If you look at your own group within an organization as if it were a stand-alone company, you see that your environment is made up of other such groups that directly influence what you do. For example, if you were the manager of the company’s mailroom, your environment would consist of customers who need your services (the rest of the company), vendors who are able to provide you with certain capabilities (postage meters, mail carts), and finally, your competitors. You don’t, of course, have competitors internally—but you can compare your service to one like United Parcel as a way to judge performance and set standards. ([Location 1720](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=1720)) - Tags: [[blue]] - What should you look for when you examine your environment? You should attempt to determine your customers’ expectations and their perception of your performance. You should keep abreast of technological developments like electronic mail and other alternative ways of doing your job. You should evaluate the performance of your vendors. You should also evaluate the performance of other groups in the organization to which you belong. Does some other group (like the traffic department) affect how well you can do your work? Can that group meet your needs? ([Location 1726](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=1726)) - Tags: [[blue]] - Once you have established what constitutes your environment, you need to examine it in two time frames—now, and sometime in the future, let’s say in a year. The questions then become: What do my customers want from me now? Am I satisfying them? What will they expect from me one year from now? You need to focus on the difference between what your environment demands from you now and what you expect it to demand from you a year from now. Such a difference analysis is crucial, because if your current activities satisfy the current demands placed on your business, anything more and new should be undertaken to match this difference. How you react to this difference is in fact the key outcome of the planning process. ([Location 1730](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=1730)) - Tags: [[blue]] - The second step of planning is to determine your present status. You do this by listing your present capabilities and the projects you have in the works. As you account for them, be sure to use the same terms, or “currency,” in which you stated demand. For instance, if your demand is listed in terms of completed product designs, your work-in-process should be listed as partially completed product designs. You also need to look at timing; namely, when will these projects come out of your “pipeline”? You must ask yourself, will every project now moving through be completed? Chances are, no, some will get scrapped or aborted, and you have to factor this into your forecasted output. Statistically, in semiconductor manufacturing, only some 80 percent of the material started actually gets finished. Similarly, while it is impossible to be precise in every case, it is prudent to factor in some percentage of loss for managerial projects as well. ([Location 1740](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=1740)) - Tags: [[blue]] - The final step of planning consists of undertaking new tasks or modifying old ones to close the gap between your environmental demand and what your present activities will yield. The first question is, What do you need to do to close the gap? The second is, What can you do to close the gap? Consider each question separately, and then decide what you actually will do, evaluating what effect your actions will have on narrowing the gap, and when. The set of actions you decide upon is your strategy. ([Location 1748](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=1748)) - Tags: [[blue]] - As you formulate in words what you plan to do, the most abstract and general summary of those actions meaningful to you is your strategy. What you’ll do to implement the strategy is your tactics. Frequently, a strategy at one managerial level is the tactical concern of the next higher level. Let’s return to our mailroom. Assume that the manager of corporate communications has decided to install electronic mail service between all manufacturing plants. This is his strategy—a plan of action to improve communications capability between plants. The mailroom manager then has to do certain things to provide service when electronic mail equipment is put in place. For instance, his strategy may be to install printers in the mailroom and set up a service to deliver printed copies throughout the building. The mailroom manager’s strategy is the communications manager’s tactics. ([Location 1753](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=1753)) - Tags: [[blue]] - The key to both Bruce’s and Cindy’s efforts is that their planning produced tasks that had to be performed now in order to affect future events. I have seen far too many people who upon recognizing today’s gap try very hard to determine what decision has to be made to close it. But today’s gap represents a failure of planning sometime in the past. By analogy, forcing ourselves to concentrate on the decisions needed to fix today’s problem is like scurrying after our car has already run out of gas. Clearly we should have filled up earlier. To avoid such a fate, remember that as you plan you must answer the question: What do I have to do today to solve—or better, avoid—tomorrow’s problem? ([Location 1793](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=1793)) - Tags: [[blue]] - the output of the planning process is the decisions made and the actions taken as a result of the process. ([Location 1802](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=1802)) - Tags: [[blue]] - How far ahead should the planners look? At Intel, we put ourselves through an annual strategic long-range planning effort in which we examine our future five years off. But what is really being influenced here? It is the next year—and only the next year. We will have another chance to replan the second of the five years in the next year’s long-range planning meeting, when that year will become the first year of the five. So, keep in mind that you implement only that portion of a plan that lies within the time window between now and the next time you go through the exercise. ([Location 1803](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=1803)) - Tags: [[blue]] - Who should be involved in the planning process? The operating management of the organization. Why? Because the idea that planners can be people apart from those implementing the plan simply does not work. Planning cannot be made a separate career but is instead a key managerial activity, one with enormous leverage through its impact on the future performance of an organization. But this leverage can only be realized through a marriage, and a good collaborative one at that, between planning and implementation. ([Location 1809](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=1809)) - Tags: [[blue]] - remember that by saying “yes”—to projects, a course of action, or whatever—you are implicitly saying “no” to something else. Each time you make a commitment, you forfeit your chance to commit to something else. ([Location 1813](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=1813)) - Tags: [[blue]] - The system of management by objectives assumes that because our concerns here are short-range, we should know quite well what our environment demands from us. Thus, management by objectives—MBO—concentrates on steps 2 and 3 of the planning process and tries very hard to make them specific. The idea behind MBO is extremely simple: If you don’t know where you’re going, you will not get there. ([Location 1818](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=1818)) - Tags: [[blue]] - 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.) ([Location 1822](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=1822)) - Tags: [[blue]] - an MBO system should set objectives for a relatively short period. For example, if we plan on a yearly basis, the corresponding MBO system’s time frame should be at least as often as quarterly or perhaps even monthly. ([Location 1832](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=1832)) - Tags: [[blue]] - The one thing an MBO system should provide par excellence is focus. This can only happen if we keep the number of objectives small. ([Location 1834](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=1834)) - Tags: [[blue]] - The relationship between Isabella’s and Columbus’ objectives is clear. The Queen wanted to increase her nation’s wealth, while Columbus wanted to find a safe trade route to the Orient. And we see a nesting hierarchy of objectives: if the subordinate’s objectives are met, the supervisor’s will be as well. ([Location 1850](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=1850)) - Tags: [[blue]] - Did Columbus perform well even though he failed by strict MBO terms? He did discover the New World, and that was a source of incalculable wealth for Spain. So it is entirely possible for a subordinate to perform well and be rated well even though he missed his specified objective. The MBO system is meant to pace a person—to put a stopwatch in his own hand so he can gauge his own performance. It is not a legal document upon which to base a performance review, but should be just one input used to determine how well an individual is doing. If the supervisor mechanically relies on the MBO system to evaluate his subordinate’s performance, or if the subordinate uses it rigidly and forgoes taking advantage of an emerging opportunity because it was not a specified objective or key result, then both are behaving in a petty and unprofessional fashion. ([Location 1855](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=1855)) - Tags: [[blue]] - to be useful a key result must contain very specific wording and dates, so that when deadline time arrives, there is no room for ambiguity. ([Location 1868](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=1868)) - Tags: [[blue]] - A manager’s objectives are supported by an appropriate set of key results. His objectives in turn are tied to his supervisor’s objectives so that if the manager meets his objectives, his supervisor will meet his. But the MBO system cannot be run mechanically by a computer. The system requires judgment and common sense to set the hierarchy of objectives and the key results that support them. Both judgment and common sense are also required when using MBO to guide you in your work from one day to the next. ([Location 1873](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=1873)) - Tags: [[blue]] - In the mission-oriented organization (a), which is completely decentralized, each individual business unit pursues what it does—its mission—with little tie-in to other units. ([Location 1938](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=1938)) - Tags: [[blue]] - At the other extreme is the totally functional organization (b), which is completely centralized. ([Location 1945](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=1945)) - Tags: [[blue]] - Alfred Sloan summed up decades of experience at General Motors by saying, “Good management rests on a reconciliation of centralization and decentralization.” Or, we might say, on a balancing act to get the best combination of responsiveness and leverage. ([Location 1952](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=1952)) - Tags: [[blue]] - The functional groups can be viewed as if they were internal subcontractors. Let’s take a sales organization as an example. Though a lot of companies use outside sales representatives, an internal group presumably provides the service at less expense and with greater responsiveness. Likewise, manufacturing, finance, or data processing can all be regarded as functional groups, which, as internal subcontractors, provide services to all the business units. ([Location 1960](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=1960)) - Tags: [[blue]] - Having so much of Intel organized in functional units also has its disadvantages. The most important is the information overload hitting a functional group when it must respond to the demands made on it by diverse and numerous business units. Even conveying needs and demands often becomes very difficult—a business unit has to go through a number of management layers to influence decision-making in a functional group. ([Location 1978](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=1978)) - Tags: [[blue]] - What are some of the advantages of organizing much of a company in a mission-oriented form? There is only one. It is that the individual units can stay in touch with the needs of their business or product areas and initiate changes rapidly when those needs change. That is it. All other considerations favor the functional-type of organization. But the business of any business is to respond to the demands and needs of its environment, and the need to be responsive is so important that it always leads to much of any organization being grouped in mission-oriented units. ([Location 1985](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=1985)) - Tags: [[blue]] - Here I would like to propose Grove’s Law: All large organizations with a common business purpose end up in a hybrid organizational form. ([Location 2006](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=2006)) - Tags: [[blue]] - Do any exceptions exist to the universality of hybrid organizations? The only exceptions that come to my mind are conglomerates, which are typically organized in a totally mission-oriented form. Why are they an exception to our rule? Because they do not have a common business purpose. The various divisions (or companies) in this case are all independent and bear no relationship to one another beyond the conglomerate profit and loss statement. But within each business unit of the conglomerate, the organization is likely to be structured along the hybrid line. ([Location 2020](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=2020)) - Tags: [[blue]] - But the most important consideration should be this: the shift back and forth between the two types of organizations can and should be initiated to match the operational styles and aptitudes of the managers running the individual units. ([Location 2029](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=2029)) - Tags: [[blue]] - In our business culture, the allocation of shared resources and the reconciliation of the conflicting needs and desires of the independent business units are theoretically the function of corporate management. Practically, however, the transaction load is far too heavy to be handled in one place. If we at Intel tried to resolve all conflicts and allocate all resources at the top, we would begin to resemble the group that ran the Hungarian economy. Instead, the answer lies with middle managers. Within a company, they are, in the first place, numerous enough to cover the entire range of operation; and, in the second place, very close to the problem we’re talking about—namely, generating internal resources and consuming those resources. For middle managers to succeed at this high-leverage task, two things are necessary. First, they must accept the inevitability of the hybrid organizational form if they are to serve its workings. Second, they must develop and master the practice through which a hybrid organization can be managed. This is dual reporting, ([Location 2039](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=2039)) - Tags: [[blue]] - Matrix management is a complicated affair. Books have been written about it and entire courses of instruction devoted to it. But the core idea was that a project manager, somebody outside any of the contractors involved, could wield as much influence on the work of units within a given company as could the company management itself. Thus, NASA elaborated the principle of dual reporting on a grand scale. ([Location 2054](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=2054)) - Tags: [[blue]] - 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. ([Location 2118](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=2118)) - Tags: [[blue]] - To be sure, neither that form nor the need for dual reporting is an excuse for needless busywork, and we should mercilessly slash away unnecessary bureaucratic hindrance, apply work simplification to all we do, and continually subject all established requirements for coordination and consultation to the test of common sense. But we should not expect to escape from complexity by playing with reporting arrangements. Like it or not, the hybrid organization is a fundamental phenomenon of organizational life. ([Location 2155](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=2155)) - Tags: [[blue]] - our behavior in a work environment can be controlled by three invisible and pervasive means. These are: •  free-market forces •  contractual obligations •  cultural values ([Location 2220](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=2220)) - Tags: [[blue]] - When you bought your tires, your actions were governed by free-market forces, which are based on price: goods and services are being exchanged between two entities (individuals, organizational units, or corporations), with each seeking only to enrich himself or itself. ([Location 2224](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=2224)) - Tags: [[blue]] - why aren’t the forces of the marketplace used all the time in all circumstances? Because to work, the goods and services bought and sold must possess a very clearly defined dollar value. The free market can easily establish a price for something as simple as tires. But for much else that changes hands in a work or business environment, value is hard to establish. ([Location 2229](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=2229)) - Tags: [[blue]] - what happens when the value of something is not easily defined? What happens, for instance, when it takes a group of people to accomplish a certain task? How much does each of them contribute to the value the business adds to the product? The point is that how much an engineer is worth in a group cannot be pinned down by appealing to the free market. In fact, if we bought engineering work by the “bit,” I think we would end up spending more time trying to decide the value of each bit of contribution than the contribution itself is worth. Here trying to use free-market concepts becomes quite inefficient. So you say to the engineers, “Okay, I’ll retain your services for a year for a set amount of money, and you will agree to do a certain type of work in return. We’ve now entered into a contract. I’ll give you an office and a terminal, and you promise me to do the best you can to perform your task.” The nature of control is now based on contractual obligations, which define the kind of work you will do and the standards that will govern it. ([Location 2234](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=2234)) - Tags: [[blue]] - When the environment changes more rapidly than one can change rules, or when a set of circumstances is so ambiguous and unclear that a contract between the parties that attempted to cover all possibilities would be prohibitively complicated, we need another mode of control, which is based on cultural values. Its most important characteristic is that the interest of the larger group to which an individual belongs takes precedence over the interest of the individual himself. When such values are at work, some emotionally loaded words come into play—words like trust—because you are surrendering to the group your ability to protect yourself. And for this to happen, you must believe that you all share a common set of values, a common set of objectives, and a common set of methods. These, in turn, can only be developed by a great deal of common, shared experience. ([Location 2254](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=2254)) - Tags: [[blue]] - As for cultural values, management has to develop and nurture the common set of values, objectives, and methods essential for the existence of trust. How do we do that? One way is by articulation, by spelling out these values, objectives, and methods. The other, even more important, way is by example. If our behavior at work will be regarded as in line with the values we profess, that fosters the development of a group culture. ([Location 2264](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=2264)) - Tags: [[blue]] - management is a team activity. But no matter how well a team is put together, no matter how well it is directed, the team will perform only as well as the individuals on it. ([Location 2338](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=2338)) - Tags: [[blue]] - 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. To determine which, we can employ a simple mental test: 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. ([Location 2341](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=2341)) - Tags: [[blue]] - The single most important task of a manager is to elicit peak performance from his subordinates. So if two things limit high output, a manager has two ways to tackle the issue: through training and motivation. ([Location 2346](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=2346)) - Tags: [[blue]] - My description of what makes people perform relies heavily on Abraham Maslow’s theory of motivation, simply because my own observations of working life confirm Maslow’s concepts. For Maslow, motivation is closely tied to the idea of needs, which cause people to have drives, which in turn result in motivation. 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. People, of course, tend to have a variety of concurrent needs, but one among them is always stronger than the others. And that need is the one that largely determines an individual’s motivation and therefore his level of performance. Maslow defined a set of needs, as shown below, that tend to lie in a hierarchy: when a lower need is satisfied, one higher is likely to take over. ([Location 2365](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=2365)) - Tags: [[blue]] - The social needs stem from the inherent desire of human beings to belong to some group or other. But people don’t want to belong to just any group; they need to belong to one whose members possess something in common with themselves. ([Location 2384](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=2384)) - Tags: [[blue]] - The physiological, safety/security, and social needs all can motivate us to show up for work, but other needs—esteem and self-actualization—make us perform once we are there. ([Location 2409](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=2409)) - Tags: [[blue]] - For Maslow, self-actualization stems from a personal realization that “what I can be, I must be.” The title of a movie about athletes, Personal Best, captures what self-actualization means: the need to achieve one’s utter personal best in a chosen field of endeavor. Once someone’s source of motivation is self-actualization, his drive to perform has no limit. Thus, its most important characteristic is that unlike other sources of motivation, which extinguish themselves after the needs are fulfilled, self-actualization continues to motivate people to ever higher levels of performance. ([Location 2423](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=2423)) - Tags: [[blue]] - Two inner forces can drive a person to use all of his capabilities. He can be competence-driven or achievement-driven. The former concerns itself with job or task mastery. A virtuoso violinist who continues to practice day after day is obviously moved by something other than a need for esteem and recognition. He works to sharpen his own skill, trying to do a little bit better this time than the time before, just as a teenager on a skateboard practices the same trick over and over again. The same teenager may not sit still for ten minutes to do homework, but on a skateboard he is relentless, driven by the self-actualization need, a need to get better that has no limit. The achievement-driven path to self-actualization is not quite like this. Some people—not the majority—are moved by an abstract need to achieve in all that they do. ([Location 2427](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=2427)) - Tags: [[blue]] - both competence- and achievement-oriented people spontaneously try to test the outer limits of their abilities. ([Location 2442](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=2442)) - Tags: [[blue]] - When the need to stretch is not spontaneous, management needs to create an environment to foster it. In an MBO system, for example, objectives should be set at a point high enough so that even if the individual (or organization) pushes himself hard, he will still only have a fifty-fifty chance of making them. Output will tend to be greater when everybody strives for a level of achievement beyond his immediate grasp, even though trying means failure half the time. Such goal-setting is extremely important if what you want is peak performance from yourself and your subordinates. ([Location 2443](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=2443)) - Tags: [[blue]] - if we want to cultivate achievement-driven motivation, we need to create an environment that values and emphasizes output. ([Location 2447](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=2447)) - Tags: [[blue]] - appears that at the upper level of the need hierarchy, when one is self-actualized, money in itself is no longer a source of motivation but rather a measure of achievement. Money in the physiological- and security-driven modes only motivates until the need is satisfied, but money as a measure of achievement will motivate without limit. Thus the second ten million can be just as important to the venture capitalist as the first, since it is not the utilitarian need for the money that drives him but the achievement that it implies, and the need for achievement is boundless. ([Location 2462](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=2462)) - Tags: [[blue]] - Once in the self-actualization mode, a person needs measures to gauge his progress and achievement. The most important type of measure is feedback on his performance. For the self-actualized person driven to improve his competence, the feedback mechanism lies within that individual himself. Our virtuoso violinist knows how the music should sound, knows when it is not right, and will strive tirelessly to get it right. Accordingly, if the possibility for improvement does not exist, the desire to keep practicing vanishes. I knew an Olympic fencing champion, a Hungarian who immigrated to this country. When I ran into him recently, he told me that he had quit fencing shortly after arriving in the U.S. He said that the level of competition here was not high enough to produce someone who could give him a contest, and that he couldn’t bear to fence any longer because every time he did, he felt his skill was diminishing. ([Location 2469](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=2469)) - Tags: [[blue]] - What are some of the feedback mechanisms or measures in the workplace? The most appropriate measures tie an employee’s performance to the workings of the organization. If performance indicators and milestones in a management-by-objectives system are linked to the performance of the individual, they will gauge his degree of success and will enhance his progress. An obvious and very important responsibility of a manager is to steer his people away from irrelevant and meaningless rewards, such as office size or decor, and toward relevant and significant ones. The most important form of such task-relevant feedback is the performance review every subordinate should receive from his supervisor. More about this later. ([Location 2476](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=2476)) - Tags: [[blue]] - our role as managers is, first, to train the individuals (to move them along the horizontal axis shown in the illustration on this page), and, second, to bring them to the point where self-actualization motivates them, because once there, their motivation will be self-sustaining and limitless. ([Location 2493](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=2493)) - Tags: [[blue]] - Is there a systematic way to lead people to self-actualization? For an answer, let’s ask another question. Why does a person who is not terribly interested in his work at the office stretch himself to the limit running a marathon? What makes him run? He is trying to beat other people or the stopwatch. This is a simple model of self-actualization, wherein people will exert themselves to previously undreamed heights, forcing themselves to run farther or faster, while their efforts fill barrels with sweat. They will do this not for money, but just to beat the distance, the clock, or other people. ([Location 2495](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=2495)) - Tags: [[blue]] - endow work with the characteristics of competitive sports. And the best way to get that spirit into the workplace is to establish some rules of the game and ways for employees to measure themselves. Eliciting peak performance means going up against something or somebody. Let me give you a simple example. For years the performance of the Intel facilities maintenance group, which is responsible for keeping our buildings clean and neat, was mediocre, and no amount of pressure or inducement seemed to do any good. We then initiated a program in which each building’s upkeep was periodically scored by a resident senior manager, dubbed a “building czar.” The score was then compared with those given the other buildings. The condition of all of them dramatically improved almost immediately. Nothing else was done; people did not get more money or other rewards. What they did get was a racetrack, an arena of competition. If your work is facilities maintenance, having your building receive the top score is a powerful source of motivation. This is key to the manager’s approach and involvement: he has to see the work as it is seen by the people who do that work every day and then create indicators so that his subordinates can watch their “racetrack” take shape. ([Location 2509](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=2509)) - Tags: [[blue]] - 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. ([Location 2525](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=2525)) - Tags: [[blue]] - At Intel we frequently rotate middle managers from one group to another in order to broaden their experience. These groups tend to be similar in background and in the type of work that they do, although their output tends to vary greatly. Some managers and their groups demonstrate themselves to be higher producers; others do not. The result of moving the managers about is often surprising. Neither the managers nor the groups maintain the characteristic of being either high-producing or low-producing as the managers are switched around. The inevitable conclusion is that high output is associated with particular combinations of certain managers and certain groups of workers. This also suggests that a given managerial approach is not equally effective under all conditions. ([Location 2542](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=2542)) - Tags: [[blue]] - varying management styles are needed as task-relevant maturity varies. Specifically, when the TRM is low, the most effective approach is one that offers very precise and detailed instructions, wherein the supervisor tells the subordinate what needs to be done, when, and how: in other words, a highly structured approach. As the TRM of the subordinate grows, the most effective style moves from the structured to one more given to communication, emotional support, and encouragement, in which the manager pays more attention to the subordinate as an individual than to the task at hand. As the TRM becomes even greater, the effective management style changes again. Here the manager’s involvement should be kept to a minimum, and should primarily consist of making sure that the objectives toward which the subordinate is working are mutually agreed upon. But regardless of what the TRM may be, the manager should always monitor a subordinate’s work closely enough to avoid surprises. ([Location 2562](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=2562)) - Tags: [[blue]] - The responsibility for teaching the subordinate must be assumed by his supervisor, and not paid for by the customers of his organization, internal or external. ([Location 2604](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=2604)) - Tags: [[blue]] - As supervisors, we should try to raise the task-relevant maturity of our subordinates as rapidly as possible for obvious pragmatic reasons. The appropriate management style for an employee with high TRM takes less time than detailed, structured, supervision requires. Moreover, once operational values are learned and TRM is high enough, the supervisor can delegate tasks to the subordinate, thus increasing his managerial leverage. Finally, at the highest levels of TRM, the subordinate’s training is presumably complete, and motivation is likely to come from within, from self-actualization, which is the most powerful source of energy and effort a manager can harness. ([Location 2606](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=2606)) - Tags: [[blue]] - The fact is that giving such reviews is the single most important form of task-relevant feedback we as supervisors can provide. It is how we assess our subordinates’ level of performance and how we deliver that assessment to them individually. ([Location 2673](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=2673)) - Tags: [[blue]] - Don’t think for a moment that performance reviews should be confined to large organizations. They should be part of managerial practice in organizations of any size and kind, from the insurance agent with two office assistants to administrators in education, government, and nonprofit organizations. The long and short of it: if performance matters in your operation, performance reviews are absolutely necessary. ([Location 2693](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=2693)) - Tags: [[blue]] - To make an assessment less difficult, a supervisor should clarify in his own mind in advance what it is that he expects from a subordinate and then attempt to judge whether he performed to expectations. 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. ([Location 2704](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=2704)) - Tags: [[blue]] - the performance rating of a manager cannot be higher than the one we would accord to his organization! It is very important to assess actual performance, not appearances; real output, not good form. ([Location 2751](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=2751)) - Tags: [[blue]] - A decision to promote is often linked, as it should be, to the performance review. We must recognize that no action communicates a manager’s values to an organization more clearly and loudly than his choice of whom he promotes. By elevating someone, we are, in effect, creating role models for others in our organization. ([Location 2754](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=2754)) - Tags: [[blue]] - There are three L’s to keep in mind when delivering a review: Level, listen, and leave yourself out. You must level with your subordinate—the credibility and integrity of the entire system depend on your being totally frank. And don’t be surprised to find that praising someone in a straightforward fashion can be just as hard as criticizing him without embarrassment. The word “listen” has special meaning here. The aim of communication is to transmit thoughts from the brain of person A to the brain of person B. Thoughts in the head of A are first converted into words, which are enunciated and via sound waves reach the ear of B; as nerve impulses they travel to his brain, where they are transformed back into thoughts and presumably kept. Should person A use a tape recorder to confirm the words used in the review? The answer is an emphatic no. Words themselves are nothing but a means; getting the right thought communicated is the end. Perhaps B has become so emotional that he can’t understand something that would be perfectly clear to anyone else. Perhaps B has become so preoccupied trying to formulate answers that he can’t really listen and get A’s message. Perhaps B has tuned out and as a defense is thinking of going fishing. All of these possibilities can and do occur, and all the more so when A’s message is laden with conflict. How then can you be sure you are being truly heard? What techniques can you employ? Is it enough to have your subordinate paraphrase your words? I don’t think so. What you must do is employ all of your sensory capabilities. To make sure you’re being heard, you should watch the person you are talking to. Remember, the more complex the issue, the more prone communication is to being lost. Does your subordinate give appropriate responses to what you are saying? Does he allow himself to receive your message? If his responses—verbal and nonverbal—do not completely assure you that what you’ve said has gotten through, it is your responsibility to keep at it until you are satisfied that you have been heard and understood. This is what I mean by listening: employing your entire arsenal of sensory capabilities to make certain your points are being properly interpreted by your subordinate’s brain. All the intelligence and good faith used to prepare your review will produce nothing unless this occurs. Your tool, to say it again, is total listening. ([Location 2763](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=2763)) - Tags: [[blue]] - How can you target a few key areas? First, consider as many aspects of your subordinate’s performance as possible. You should scan material such as progress reports, performance against quarterly objectives, and one-on-one meeting notes. Then sit down with a blank piece of paper. As you consider your subordinate’s performance, write everything down on the paper. Do not edit in your head. Get everything down, knowing that doing so doesn’t commit you to do anything. Things major, minor, and trivial can be included in no particular order. When you have run out of items, you can put all of your supporting documentation away. Now, from your worksheet, look for relationships between the various items listed. You will probably begin to notice that certain items are different manifestations of the same phenomenon, and that there may be some indications why a certain strength or weakness exists. When you find such relationships, you can start calling them “messages” for the subordinate. At this point, your worksheet might look something like that shown on the next page. Now, again from your worksheet, begin to draw conclusions and specific examples to support them. Once your list of messages has been compiled, ask yourself if your subordinate will be able to remember all of the messages you have chosen to deliver. If not, you must delete the less important ones. Remember, what you couldn’t include in this review, you can probably take up in the next one. ([Location 2802](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=2802)) - Tags: [[blue]] - I think we have our priorities reversed. Shouldn’t we spend more time trying to improve the performance of our stars? After all, these people account for a disproportionately large share of the work in any organization. Put another way, concentrating on the stars is a high-leverage activity: if they get better, the impact on group output is very great indeed. We all have a hard time saying things that are critical, whether we’re talking to a superior employee or a marginal one. We must keep in mind, however, that no matter how stellar a person’s performance level is, there is always room for improvement. Don’t hesitate to use the 20/20 hindsight provided by the review to show anyone, even an ace, how he might have done better. ([Location 2895](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=2895)) - Tags: [[blue]] - In my experience, the best thing to do is to give your subordinate the written review sometime before the face-to-face discussion. He can then read the whole thing privately and digest it. He can react or overreact and then look at the “messages” again. By the time the two of you get together, he will be much more prepared, both emotionally and rationally. ([Location 2923](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=2923)) - Tags: [[blue]] - CONDUCTING THE INTERVIEW The applicant should do 80 percent of the talking during the interview, and what he talks about should be your main concern. But you have a great deal of control here by being an active listener. Keep in mind you only have an hour or so to listen. When you ask a question, a garrulous or nervous person might go on and on with his answer long after you’ve lost interest. Most of us will sit and listen until the end out of courtesy. Instead, you should interrupt and stop him, because if you don’t, you are wasting your only asset—the interview time, in which you have to get as much information and insight as possible. So when things go off the track, get them back on quickly. Apologize if you like, and say, “I would like to change the subject to X, Y, or Z.” The interview is yours to control, and if you don’t, you have only yourself to blame. ([Location 2954](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=2954)) - Tags: [[blue]] - An interview produces the most insight if you steer the discussion toward subjects familiar to both you and the candidate. The person should talk about himself, his experience, what he has done and why, what he would have done differently if he had it to do over, and so forth, but this should be done in terms familiar to you, so that you can evaluate its significance. ([Location 2960](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=2960)) - Tags: [[blue]] - Technical/Skills describe some projects what are your weaknesses What He Did With Knowledge past achievements past failures Discrepancies what did you learn from failures problems in current position Operational Values why are you ready for new job why should my company hire you why should engineer be chosen for marketing most important college course/project ([Location 2984](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=2984)) - Tags: [[blue]] - one middle manager’s needs can differ greatly from another’s, depending on individual circumstances—number of children, a working spouse or not, and so on. As a supervisor, you have to be very sensitive toward the various money needs of your subordinates and show empathy toward them. You must be especially careful not to project your own circumstances onto others. ([Location 3082](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=3082)) - Tags: [[blue]] - As managers, our concern is to get a high level of performance from our subordinates. So we want to dispense, allocate, and use money as a way to deliver task-relevant feedback. To do this, compensation should obviously be tied to performance, ([Location 3085](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=3085)) - Tags: [[blue]] - We can base a portion of a middle manager’s compensation on his performance. Let’s call this a performance bonus. The percentage the bonus represents of a manager’s total compensation should rise with his total compensation. Thus, for a highly paid senior manager, for whom the absolute dollars make relatively little difference, the performance bonus should be as high as 50 percent, while a middle manager should receive more in the range of 10 to 25 percent of his total compensation this way. ([Location 3089](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=3089)) - Tags: [[blue]] - If you take all of this into account, you are likely to come up with some complex arrangements. For example, you might have a scheme in which a manager’s performance bonus is based on three factors. The first would include his individual performance only, as judged by his supervisor. The second would account for his immediate team’s objective performance, his department perhaps. The third factor would be linked to the overall financial performance of the corporation. When you take, let’s say, 20 percent of a manager’s compensation and split it into three parts, any one will have only a small impact on total compensation, yet attention will still be called to its significance. No matter what way you choose to determine bonuses, none gives you exactly what you want, but most of them will spotlight performance and deliver task-relevant feedback. ([Location 3101](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=3101)) - Tags: [[blue]] - A supervisor trying to administer some type of merit-based or compromise scheme has to deal with the allocation of a finite resource—money—and this requires thought and effort. If we want to use such schemes, we have to come to terms with the principle—troubling to many managers—that any merit-based system requires a competitive, comparative evaluation of individuals. Merit-based compensation simply cannot work unless we understand that if someone is going to be first, somebody else has to be last. ([Location 3131](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=3131)) - Tags: [[blue]] - Promotions, defined as a substantial change in a person’s job, are very important to the health of any organization and should be considered with great care. Obviously, for the individual concerned, promotions often produce a big raise. As we have seen, promotions are also readily seen by other members of the organization, and so take on a vitally important role in communicating a value system to the rest of the company. Promotions must be based on performance, because that is the only way to keep the idea of performance highlighted, maintained, and perpetuated. ([Location 3138](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=3138)) - Tags: [[blue]] - you’ll find two basic types of “meets” performers. One has no motivation to do more or faces no challenge to do more. This is the noncompetitor, who has become settled and satisfied in his job. The other type of “meets” performer is the competitor. Each time he reaches a level of “exceeds requirements,” he becomes a candidate for promotion. Upon being promoted, he very likely becomes a “meets” performer again. This is the person Dr. Peter wrote about. But we really have no choice but to promote until a level of “incompetence” is reached. At least this way we drive our subordinates toward higher performance, and while they may perform at a “meets” level half the time, they will do that at an increasingly more challenging and difficult job level. ([Location 3158](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=3158)) - Tags: [[blue]] - Insufficiently trained employees, in spite of their best intentions, produce inefficiencies, excess costs, unhappy customers, and sometimes even dangerous situations. The importance of training rapidly becomes obvious to the manager who runs into these problems. ([Location 3193](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=3193)) - Tags: [[blue]] - A manager’s own productivity thus depends on eliciting more output from his team. A manager generally has two ways to raise the level of individual performance of his subordinates: by increasing motivation, the desire of each person to do his job well, and by increasing individual capability, which is where training comes in. It is generally accepted that motivating employees is a key task of all managers, one that can’t be delegated to someone else. Why shouldn’t the same be true for the other principal means at a manager’s disposal for increasing output? Training is, quite simply, one of the highest-leverage activities a manager can perform. Consider for a moment the possibility of your putting on a series of four lectures for members of your department. Let’s count on three hours of preparation for each hour of course time—twelve hours of work in total. Say that you have ten students in your class. Next year they will work a total of about twenty thousand hours for your organization. If your training efforts result in a 1 percent improvement in your subordinates’ performance, your company will gain the equivalent of two hundred hours of work as the result of the expenditure of your twelve hours. This assumes, of course, that the training will accurately address what students need to know to do their jobs better. This isn’t always so—particularly with respect to “canned courses” taught by someone from outside. For training to be effective, it has to be closely tied to how things are actually done in your organization. ([Location 3198](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=3198)) - Tags: [[blue]] - you accept that training, along with motivation, is the way to improve the performance of your subordinates, and that what you teach must be closely tied to what you practice, and that training needs to be a continuing process rather than a one-time event, it is clear that the who of the training is you, the manager. You yourself should instruct your direct subordinates and perhaps the next few ranks below them. Your subordinates should do the same thing, and the supervisors at every level below them as well. ([Location 3217](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=3217)) - Tags: [[blue]] - The distinction between new-employee and new-skill training is important because the magnitude of the tasks is very different. The size of the job of delivering a new-employee course is set by the number of new people joining the organization. For instance, a department that has 10 percent annual turnover and grows 10 percent per year has to teach 20 percent of its staff the basics of their work each year. Training even 20 percent of your employees can be a huge undertaking. Teaching new principles or skills to an entire department is an even bigger job. If we want to train all of our staff within a year, the task will be five times as large as the annual task of training the 20 percent who represent new members. Recently I looked at the cost of delivering a new one-day course to our middle-management staff. The cost of the students’ time alone was over one million dollars. Obviously such a task should not be entered into lightly. ([Location 3236](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=3236)) - Tags: [[blue]] - So what should you do if you embrace the gospel of training? For starters, make a list of the things you feel your subordinates or the members of your department should be trained in. Don’t limit the scope of your list. Items should range from what seems simple (training the person who takes calls at the restaurant) to loftier and more general things like the objectives and value systems of your department, your plant, and your company. Ask the people working for you what they feel they need. They are likely to surprise you by telling you of needs you never knew existed. Having done this, take an inventory of the manager-teachers and instructional materials available to help deliver training on items on your list. Then assign priorities among these items. ([Location 3243](https://readwise.io/to_kindle?action=open&asin=B015VACHOK&location=3243)) - Tags: [[blue]]