[Dec/2022-Archive-May/2022 | Management] High Output Management – Andrew Grove


  • Japanese onslaught of DRAM – Intel has to change product entirely
    • Globalization
  • Email
    • Japanese office used to be efficient – ppl in same group in the same long table
    • Email means more efficiency
    • Also digitalization is another form is globalization
  • Book is for middle-manager
    • “Know how manager” – even if they don’t manage ppl
  • Three main idea
    • Output oriented approach to mgmt – ideas from manufacturing, every employee “produce something”
    • Manager’s output is the team under the manager’s influence – high managerial leverage tasks
      • One-on-one meetings
    • Managing your career
      • Manager as sole proprieter – (1) add value to process; (2) learning new things; (3) trying out new things; 

Breakfast Factory – Chap 1 Basics of Prod

  • Breakfast example – 3 min egg, toast, coffee
    • Limiting Step – build the process around the limiting step
    • Trade-off between various factors – manpower, capacity and inventory
  • Upgrade to high-volume factory
    • How to avoid breakdown – functional test – sample some egg and open
      • Prefer in process test than test that destroy a product
      • Raw Material / Input Inspection
  • Each stage in pipeline is value adding, quality assurance / problem detection at lowest-value stage

Breakfast Factory – Chap 2 Managing Breakfast Factory – delivering a breakfast

  • Indicators
    • What five indicators would you look at each day – first thing after arriving at office?
    • First rule – have measurement is better than not having measurement.
    • Effective indicator measure output instead of activity (closed deal from salesman instead of call he makes)
    • Second rule – measurement against countable things
    • Three usage (1) OKR of individual/group; (2) objective; (3) cross-group comparison of which ones are more effective – competitive spirit (sports analogy) more improvement in performance
  • Black box
    • Leading Indicators – “window cut into the blackbox”
    • Example: machine downtime records, customer satisfaction ratings
    • Also curve of whether production spread evenly vs. most of production in last month
      • If most prod in last month – that indicates inefficiency, one minor breakdown in the end of month will be ruinous 
    • Stagger charts
      • Economic forecast vs. actual 
  • Controlling future output
    • Build to order vs. Build to forecast – forecasting future demands
      • Inventory risk
    • Who do the forecasting – better to ask bother manufacturing & sales department to forecast, so that ppl responsible for performing against their our predictions
    • Inventory should be kept at “lowest value stage” – i.e. raw eggs
  • Assure quality
    • increase quality vs. minimal disturbance to prod 
    • Gatelike vs. Monitoring
      • Gatelike hold upstream until it pass check, monitoring pass it downstream while doing the check, stop the line if too many checks fail
      • If empirically not likely big problem, then prefer monitoring type 
    • Variable inspection
      • More problem occur increase freq of inspection, and vice versa
  • Productivity
    • Increase productivity by “work harder/faster” vs. “work smarter (what)”
      • i.e. Software Engineer using high-level programming language + compiler is faster than software engineer using low-level programming language
      • High leverage activity
    • Work Simplification

Management is a team game – Chap 3 Managerial Leverage

  • Manager’s output = output of his org + output of neighboring orgs under influence
  • Manager keep many balls in the air, he spends energy to where greatest leverage is.
  • Manager as role model.
  • High leverage activities
    •  Many people affected / people affected over long period / unique knowledge – key info
    • Positive vs. Negative leverage
  • Delegation
    • Need monitoring: Delegation without follow-thru is abdication 
  • Speed-up
    • Identify limiting step / bottleneck
    • Batching 
    • Factory use forecast – Manager’s calendar is the forecast
    • Allow slack – looseness in scheduling
    • Inventory principle 
  • How many subordinate: 6~8 is optimal 
  • Interruptions 

Management is a team game – Chap 4 Meetings – The medium of managerial work

  • Two types of meeting
    • Process Oriented: knowledge & info exchange
      • 1-on-1 – knowledge sharing
      • Staff Meetings
    • Mission Oriented: finish a proj 

Management is a team game – Chap 5 Decisions, Decisions

  • Ideal decision making: Free Discussion / Clear Decision / Full Support
  • Ppl afraid to speak out against peers (peer group syndrome) 

Management is a team game – Chap 6 Planning: Today’s actions for tomorrow’s output

  • Planning Process
    • Step-1 env demand
    • Step-2 present status
    • Step-3 what to do to close the gap
  • Output of planning – future events
  • MBO – management by objectives
    • Columbus story retold 
    • OKR need clear objective and clear deadline 

Team of Teams – Chap 7 The breakfast factory goes national

  • When a chain goes national, there’s issue of global vs. local (i.e. marketing)

Team of Teams – Chap 8 Hybrid Org

  • Mission oriented vs. Functional Org
    • Mission oriented – decentralized
  • Good Org is hybrid of two
    • Trade-off between responsiveness & leverage
    • Front mission-oriented (battle group), back functional (functional)
    • Advantage of centralized functional group
      • Advantage 1: Economics of scale (centralized info sys, centralized manufacturing, know-how experts) – good things applied to entire company, big leverage
      • Disadvantage – centralized functional group make business units waste energy negotiating for resources
    • Advantage of business unit – fast to response 
    • Example of non-responsiveness : Soviet-Union’s Central Planning Commitee
      • Middle Mgr is important – has leverage & close to problem

Team of Teams – Chap 9 Dual Reporting

  • Matrix Mgmt 
  • Dual reporting
    • Example: who should the security of manufacturing plant report to
      • Head of security? (Expert on security, but not local, low responsiveness)
      • Head of plant? (Expert on the plant, not expert on security)
      • Dual reporting!
  • Too centralized – no grasp on current state of affair, too decentralized – fragmented and inefficient

Team of Teams – Chap 10 Modes of Control

  • Our behavior controlled by three forces:
    • Free market forces – i.e. buy a car
    • Contractual obligations – i.e. tax system 
    • Culture values
  • CUA factor – Complexity, Uncertainty, Ambuguity
  • New hire example – new to company (high self-interest) give him a task with low CUA factor; once more comfortable (more group interest) – task with higher CUA factor
    • Company with strong culture tend to promote from within 

The Players – Chap 11 The sports Analogy

  • Can do vs. Will do
    • Training vs. Motivation
    • Motivated people learn faster
  • Maslow’s levels of needs + drives
    • Social Need – is important
    • Esteem/Recog
    • Self Actualization
      • Competence-driven vs. Achievement-driven
        • Competence : Violinist for example 
        • Achievement: more abstract
      • Gambler vs. Conservative vs. Achiever
        • Achiever test their ability
      • To cultivate achievement-driven motivation, need to create env that values emphasize output
  • Sportify / Gamify the work-place

The Players – Chap 12 Task-relevant Maturity

  • DONE

The Players – Chap 13 Performance Appraisal – Manager as Judge & Jury

  • Assessing Perf
    • Time offset between activity and output
    • Org vs. Manager
  • Delivering the assessment
  • The blast – big perf issue
  • Reviewing the Ace

The Players – Chap 14 Two difficult tasks

  • Interviewing
    • Interviewee should do 80% of talking
    • Four dimensions of assessment
      • Tech Domain Skill
      • What he/she achieved with the knowledge
      • Discrepancies
        • Lessons learned 
        • Current problems
      • Operational values 
    • How:
      • Ask candidate to handle hypothetical situation
        • Example: Author know nothing about finance, and the candidate Harvard MBA know nothing about semi-conductor
        • Go thru the factory, answer any questions, and ask him what’s the cost for finished product
      • Ask candidate what they’d like to know about you / company / job
      • Reference – you may not get “real info”
  • “I Quit”
    • Try every avenue to keep the employee to the firm – even internal transfer
    • When employee has accepted another job somewhere else – really asking two favors
      • Using familiarity (work together daily) as a weapon

The Players – Chap 15 Compensation as task-relevant feedback

  • Time-based vs. Merit-based

The Players – Chap 16 Why training is the boss’s job

  • Insufficiently trained employee is bad
  • Either increase (1) motivation or increase (2) capability
  • Training is the very high leveraged activity
  • Training new employees vs. training new ideas/skills

One more thing

Leave a Reply