“High Output Management” by the late Andrew Grove, ex-Chairman and CEO of Intel, is a must-read management book. First published back in 1983, the book applies production principles to management. All (product) managers can benefit from the principles discussed below and make it a part of their day-to-day working practices.

High Output Management

Leverage 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. This raises the question about what qualifies as managerial leverage and output.

Leverage

Three steps your planning process should consist of:<ul><li>Step 1 – Establish projected need or demand: What will the environment demand from you, your business, or your organisation?</li><li>Step 2 – Establish your present status: What are you producing now? What will you be producing as your projects in the pipeline are completed?</li><li>Step 3 – Compare and reconcile steps 1 and 2: What more (or less) do you need to do to produce what your environment will demand?</li></ul>

Planning: Today’s actions for tomorrow’s output

To maximise the leverage of his or her activities, a manager must keep timeliness firmly in mind. Equally, managers micromanaging or ‘meddling’ are examples of negative leverage activities. A big part of a manager’s work is to supply information and know-how, and to share a sense of the preferred method of handling things to the teams under his control or influence.

High leverage activities

The “limiting step” is the step in the overall shape of the production flow that will determine the overall shape of a company’s operations.  For example, the time required to boil an egg is the critical component or the ‘limiting step’ in the production flow of serving breakfast. The key idea here is to construct your production flow by starting with the longest (or most difficult, or most sensitive, or most expensive) step and work our way back.

Identifying the “limiting step”

<ul><li>Judgments and opinions</li><li>Direction</li><li>Allocation of resources</li><li>Mistakes detected</li><li>Personnel trained and subordinates developed</li><li>Courses taught</li><li>Products planned</li><li>Commitments negotiated</li></ul>

Managerial Activities

If there’s a problem with your product, you want to find out about it as early on in the production process as possible so that you can minimise the risk.  In the production world, I witnessed the lowest-value stage thinking first hand at the assembly line of a Toyota factory. Here, employees can pull the “Andon” cord to (temporarily) bring things to a halt as soon as they come across an issue. It’s an easy way of escalating things, making sure that a problem or bottleneck is dealt with before proceeding with the rest of the assembly process.

Detect and fix issues at the “lowest-value stage” possible

A lot of managerial tasks are best suited for face-to-face interactions, and more often than not, for meetings. There are two kinds of meetings: Process-oriented meetings: Knowledge is shared and information is exchanged during process-oriented meetings, which take place on a regular, scheduled basis.Mission-oriented meetings: The purpose of mission-oriented meetings is to solve a specific problem and often produce a decision.

Meetings And Their Output

In order to run a production process well, you’ll need a set of indicators that help you monitor and improve the efficiency of the production line. For these indicators to be useful, you have to focus each indicator on a specific operational goal.  Leading indicators like the sales forecast, inventory, manpower and quality give you one way to look inside the production process by showing you in advance what the future might look like.

Using (leading) indicators to measure and predict

<ul><li>Identify our limiting step: determine which things have to happen on a schedule that’s absolute, and which can’t be moved. You can then plan more flexible activities around it and thus work more efficiently.</li><li>Batching similar tasks: group similar activities, e.g. performance reviews, as these activities tend to require (mental) set-up time. You can thus maximise the set-up time needed for the task and reduce duplication of effort.</li><li>Forecasting your activities: Your calendar can be a valuable production-planning tool.</li></ul>

Ways to improve on time management techniques

A manager’s output is the output of all of the people and the teams that report into her. For example, if someone manages a design team, then his output consists of completed designs that are ready to be implemented. That output can take many different forms depending on the type of role and industry. Regardless of the form of output, managers must measure its quantity and quality:A manager’s output = The output of his organisation + The output of the neighbouring organisations under his influence

The Output Of A Manager

If people spend more than 25 percent of their time in meetings, it’s a sign of malorganisation.

<ul><li>When many people are affected by one manager.</li><li>When a person’s activity or behaviour over a long period of time is affected by a manager’s, well-focused set of words or actions.</li><li>When a large group’s work is affected by an individual supplying a unique, key piece of knowledge or information.</li></ul>

Three ways in which to achieve high leverage activities

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The president of Silicon Valley's Intel Corporation sets forth the three basic ideas of his management philosophy and details numerous specific techniques to increase productivity in the manager's work and that of his colleagues and subordinates

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In this legendary business book and Silicon Valley staple, the former chairman and CEO of Intel shares his perspective on how to build and run a company. A practical handbook for navigating real-life business scenarios and a powerful management manifesto with the ability to revolutionize the way we work.  The essential skill of creating and maintaining new businesses—the art of the entrepreneur—can be summed up in a single word: managing. Born of Grove’s experiences at one of America’s leading technology companies (as CEO and employee number three at Intel), High Output Management is equally appropriate for sales managers, accountants, consultants, and teachers, as well as CEOs and startup founders. Grove covers techniques for creating highly productive teams, demonstrating methods of motivation that lead to peak performance.  "Generous enough with advice and observations to be required reading." —The Wall Street Journal

Leverage

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Using our time on high leverage activities