Book Notes: High Output Management By Andy Grove

Summary

Thanks to a reading group at work I finally got through this book after starting and putting it off multiple times these past six years. The factory analogy at the beginning would always zone me out. There are a few such - in my opinion, forced - analogies in the book, but sticking with it does surface plenty of gems. Thanks to the sheer success of Andy Grove's Intel, none of the insights are surprising since they have become foundational to how every valley company is now run. Grove's framework for running one on ones, how to make meetings useful, thoughts on what makes a manager a manager, managing by objectives, all these are now common place in tech companies (and maybe beyond). It can be argued that all management books written by valley executives these past two decades are downstream of High Output Management. There's almost no fluff here. Grove transformed Bob Noyce's and Gordon Moore's Intel into his own image, rescuing it from certain death at least twice. This book captures Intel's managing principles from the 80s and the 90s that allowed it to survive and thrive. That alone makes it worthwhile for any engineer to read. At the least, it will make concrete some of things you are already thinking of regarding this job that you are doing.

The Intel of 2022 doesn't have the same shine it did during Grove's days. I wonder if these ideas needed a Grove or someone very like him to execute at scale. Entropy is inevitable, but can organizations delay it? Are there any such organizations at all? What went wrong with Intel under his successors? Grove is no longer around to illuminate us, and I would quite like a book that explores and tries to answer some of these questions.

Notes

• You are responsible for your career. This is the lowest level of management.
• Fix problems as early as possible. Uses the analogy of a factory. You want to address issues as close to the source as possible.
• Indicators - paired indicators, leading indicators. You need to measure your system, and you need to come up with metrics to do that. There will be multiple metrics. Examples include sales forecast, raw material inventory, equipment, man power.
• There are two ways to increase productivity: do what you are already doing faster, or change the nature of your work. The second one has more leverage. "Work smarter, not harder". Arrange your workflow so that you can produce more with your activity.
• Management is a team game. A manager's output is the output of his or her organization plus the output of the neighbouring organizations under his influence.
  • It's not enough for a manager to do his own individual work well.
• Andy Grove doesn't consider only people managers as "managers". "Individual contributors who gather and disseminate know-how and information should also be seen as middle managers, because they exert great power within the organization."
• Written reports don't provide timely information - the life blood of any high leverage managerial activity. So why are written reports important? "Reports are more a medium of self-discipline than a way to communicate information. Writing the report is important, reading it often is not."
  • Similar reasoning applies to the preparation of an annual plan.
• Values and behavioural norms are simply not transmitted by talk or memo, but are conveyed very effectively by doing, and doing visibly. Managers should be exemplars.
• The art of management lies in the capacity to select from the many activities of seemingly comparative significance the one or two that provide leverage well beyond others and concentrate on them.
  • For Grove, this was listening to customer complaints.
• Meetings are mediums through which managerial work is performed. There are two kinds: process-oriented and mission-oriented. Know which meeting you are going to.
  • Process-oriented: knowledge is shared and information is exchanged.
  • Mission-oriented: solve a specific problem.
• Grove's Principle of Didactic Management: "Ask one more question!"
  • "When the supervisor thinks that the subordinate has said all that he wants to about a subject, he should ask another question. He should keep the flow of thoughts coming by prompting the subordinate with queries till both feel satisfied that they have gotten to the bottom of a problem."
• 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.
• Peer-group syndrome: When peers meet together to solve a problem, a decision doesn't get made. Peers tend to look for a more senior manager, even if he's not the most competent or knowledgable person involved, to take over and shape a meeting. Most people are just afraid to stick their necks out.
• A manager's key task is to settle six important questions in advance:
  • What decision needs to be made?
  • When does it have to be made?
  • Who will decide?
  • Who will need to be consulted prior to making the decision?
  • Who will ratify or veto the decision?
  • Who will need to be informed of the decision?
• Management by objective system needs to answer two questions:
  • Where do want to go? (the objective)
  • How will I pace myself to see if I am getting there (the key results)
• Our behaviour in a work environment can be controlled by three invisible and pervasive means.
  • free-market forces
  • contractual obligations
  • cultural values
• At any time at work, all three of the above will govern what one does. Exercise of power must keep an awareness of the above in the mind. Carrot and stick.
• The manager is a coach managing a sports team. An ideal coach doesn't take personal credit for the success of the team, and due to that the team trusts him. He is tough on the team, and by being critical can extract the best performance. The coach should have once been a good player himself and understands the game.

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