Andrew S. Grove

"(nudge),"

"A manager’s output = the output of his organization + the output of the neighboring organizations under his influence."

"Lecture at our employee orientation program. This is a program in which senior management gives all professional employees a presentation describing the objectives, history, management systems, etc., of the company and its major groups. I am the first lecturer in the series. This clearly represented information-giving, and I was a role model not only in communicating the importance we place on training, but also, by my handling of questions and comments, in representing, in living form, some of the values of the company. The nature of the questions, at the same time, gave me a feeling for the concerns and understanding level of a large number of employees to whom I would not otherwise have access. So this also represented information-gathering, characteristic of the “visit” type in its efficiency."

"“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."

"A manager’s output = The output of his organization + The output of the neighboring organizations under his influence"

"The output of a manager is the output of the organizational units under his or her supervision or influence."

"Another seemingly trivial piece of work—creating a tickler file—can improve daily work significantly for a long time. Setting up the simple mechanical aid is a one-time activity, yet it is likely to improve the productivity of the manager who uses it indefinitely. Thus the leverage here is very, very high."

"In my experience, nowhere has the stagger chart been more productive than in forecasting economic trends. The way it works is shown in the figure below, which gives us forecasted rates of incoming orders for an Intel division. The stagger chart then provides the same forecast prepared in the following month, in the month after that, and so on. Such a chart shows not only your outlook for business month by month but also how your outlook varied from one month to the next. This way of looking at incoming business, of course, makes whoever does the forecasting take his task very seriously, because he knows that his forecast for any given month will be routinely compared with future forecasts and eventually with the actual result. But even more important, the improvement or deterioration of the forecasted outlook from one month to the next provides the most valuable indicator of business trends that I have ever seen. I would go as far as to say that it’s too bad that all economists and investment advisers aren’t obliged to display their forecasts in a stagger chart form. Then we could really have a way to evaluate whatever any one of them chooses to say."

"Because each alternative costs money, your task is to find the most cost-effective way to deploy your resources—the key to optimizing all types of productive work. Bear in mind that 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. You probably won’t use a stopwatch to conduct a time-and-motion study of the person behind a toaster; nor will you calculate the precise trade-off between the cost of toast inventory and the added toaster capacity in mathematical terms. What is important is the thinking you force yourself to go through to understand the relationship between the various aspects of your production process."

"the definition of “manager” should be broadened: 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."

"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. For me, paying close attention to customer complaints constitutes a high-leverage activity. Aside from making a customer happy, the pursuit tends to produce important insights into the workings of my own operation. Such complaints may be numerous, and though all of them need to be followed up by someone, they don’t all require or wouldn’t all benefit from my personal attention. Which one out of ten or twenty complaints to dig into, analyze, and…"

"Another production principle is very nearly the opposite. 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."

"Sometimes a business is organized in a way that makes the ideal fan-out of six to eight subordinates hard to reach. A manufacturing plant, for example, may have an engineering section and a production section, in which case the plant manager would only have two people reporting directly to him. The manager might then choose to “act” as one of the two subordinates, choosing to be his own engineering manager, for instance. If he does that, the manufacturing manager will still report to him, and he will have added the people who would ordinarily report to the head of engineering. So the plant manager will actually have six direct reports: five engineers and the manufacturing manager. The arrangement, shown below, does not have the engineers appearing to be at the same organizational level as the manufacturing manager—something he would surely take exception to."

"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."

"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."

"Given a choice, should you delegate activities that are familiar to you or those that aren’t? Before answering, consider the following principle: 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…"

"Making certain types of decisions is something managers frequently delegate to subordinates. How is this best done? By monitoring their decision-making process. How do you do that? Let’s examine what Intel goes through to approve a capital equipment purchase. We ask a subordinate to think through the entire matter carefully before presenting a request for approval. And to monitor how good his thinking is, we ask him quite specific questions about his request during a review meeting. If he answers them convincingly,…"

"Increasing Managerial Activity Rate: Speeding Up the Line Of course, the most obvious way to increase managerial output is to increase the rate, or speed, of performing work. The relationship…"

"As president of a company, I can affect output through my direct subordinates—group general managers and others like them—by performing supervisory activities. I can also influence groups not under my direct supervision by making observations and suggestions to those who manage them. Both types of activity will, I hope, contribute to my output as a manager by contributing to the output of the company as a whole. I was once asked by a middle manager at Intel how I could teach in-plant courses, visit manufacturing plants, concern myself with the problems of people several levels removed from me in the organization, and still have time to do my job. I asked him what he thought my job was. He thought for a moment, and then answered his own question, “I guess those things are your job too, aren’t they?” They are absolutely my job—not my entire job, but part of it, because they help add to the output of Intel."

"Incoming telephone call from a competitor. Call was ostensibly about a meeting of an industry-wide society, but in reality he was feeling out how I saw business conditions. I did the same. (Information-gathering.)"

"because you must coordinate your work with that of other managers, you can only move toward regularity if others do too. In other words, the same blocks of time must be used for like activities. For example, at Intel Monday mornings have been set aside throughout the corporation as the time when planning groups meet. So anybody who belongs to one can count on Monday for that purpose and be free of scheduling conflicts."

"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."

"the true output of the planning process is the set of tasks it causes to be implemented. The output of Intel’s annual plan, for instance, is the actions taken and changes prompted as a result of the thinking process that took place throughout the organization. I, for one, hardly ever look at the bound volume finally called the Annual Plan. In other words, the output of the planning process is the decisions made and the actions taken as a result of the process."

"because you must coordinate your work with that of other managers, you can only move toward regularity if others do too. In other words, the same blocks of time must be used for like activities. For example, at Intel Monday mornings have been set aside throughout the corporation as the time when planning groups meet. So anybody who…"

"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. This is important for both the junior and senior manager. The junior person will benefit from the comments, criticisms, and suggestions of the senior manager, who in turn will get a different feel for problems from people familiar with their details. Such meetings are also a source of motivation: managers making the presentations will want to leave a good impression on their supervisor’s supervisor and on their outside peers. Who are the players at an operation review? The organizing manager, the reviewing manager, the presenters, and the audience. Each of these players has a distinct role to play if the review is to be a useful one. 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. Though it’s hard to judge in advance the time needed for any discussion, the supervisor has presumably had more experience running meetings. In any case, he should pace the presenters using inconspicuous gestures, so that the manager talking doesn’t suddenly find himself out of time with only half his points covered. 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.…"

"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."

"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."

"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."

"to put it yet another way, the hybrid organizational form is the inevitable consequence of enjoying the benefits of being part of a large organization—a company or university or whatever. 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."

"Let’s now look at Intel’s organization form, as shown on the next page. We are a hybrid organization. Our hybrid nature comes from the fact that the form of the overall corporate organization results from a mix of the business divisions, which are mission-oriented, and the functional groups. This is much like the way I imagine any army is organized. The business divisions are analogous to individual fighting units, which are provided with blankets, paychecks, aerial surveillance, intelligence, and so forth by the functional organizations, which supply such services to all fighting units. Because each such unit does not have to maintain its own support groups, it can concentrate on a specific mission, like taking a hill in a battle. And for that, each unit has all the necessary freedom of action and independence. 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."

"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."

"It could also turn out that people who are in a subordinate/supervisory relationship in one plane might find the relationship reversed in another. For example, I am president of Intel, but in another plane I am a member of a strategic planning group, where I report to its chairman, who is one of our division controllers. It’s as if I were a member of the Army Reserve, and on our weekend exercises I found myself under the command of a regimental leader who happens to be this division controller. Back at the operating ranch, I may be his supervisor or his supervisor’s supervisor, but in the Army Reserve he is my commanding officer. The point is that the two- (or multi-) plane organization is very useful. Without it I could only participate if I were in charge of everything I was part of. I don’t have that kind of time, and often I’m not the most qualified person around to lead. The multi-plane organization enables me to serve as a foot soldier rather than as a general when appropriate and useful. This gives the organization important flexibility. Many of the groups that we are talking about here are temporary. Some, like task forces, are specifically formed for a purpose, while others are merely an informal collection of people who work together to solve a particular problem. Both cease to work as a group once the problem has been handled. The more varied the nature of the problems we face and the more rapidly things change around us, the more we have to rely on such specially composed transitory teams to cope with matters. In the electronics business, we can’t…"

"Trust in no way relates to an organizational principle but is instead an aspect of the corporate culture, something about which much has been written in recent years. Put simply, it is a set of values and beliefs, as well as familiarity with the way things are done and should be done in a company. The point is that a strong and positive corporate culture is absolutely essential if dual reporting and decision-making by peers are to work."

"Grove’s Law: All large organizations with a common business purpose end up in a hybrid organizational form. The Breakfast Factory, an army, Intel, and ABC Technologies provide examples. But just about every large company or enterprise that I know is organized in a hybrid form. Take an educational institution in which one finds individual mission-oriented departments such as mathematics, English, engineering, and so on, and also administration, composed of personnel, security, and library services, whose combined task is to supply the common resources that each of the individual departments needs to function."

"the need for dual reporting is actually quite fundamental. Let’s think for a minute about how a manager comes to be. The first step in his career is being an individual contributor—a salesman, for instance. If he proves himself a superior salesman, he is promoted to the position of sales manager, where he supervises people in his functional specialty, sales. When he has shown himself to be a superstar sales manager he is promoted again, this time becoming a regional sales manager. If he works at Intel, he is now not only supervising salesmen but also so-called field application engineers, who obviously know more about technical matters than he does but whom he still manages. The promotions continue until our superstar finds himself a general manager of a business division. Among other things, our new general manager has no experience with manufacturing. So while he is perfectly capable of supervising his manufacturing manager in the more general aspects of his job, the new boss has no choice but to leave the technical aspects to his subordinate, because as a graduate of sales, he has absolutely no background in manufacturing. In other divisions of the corporation, manufacturing managers may similarly be reporting to people who rose through the ranks of engineering and finance. We could handle the problem by designating one person the senior manufacturing manager and having all the manufacturing managers report to him instead of to the general manager. But the more we do this, the more we move toward a totally functional form of organization. A general manager could no longer coordinate the activities of the finance, marketing, engineering, and manufacturing groups toward a single business purpose responsive to marketplace needs. We want the immediacy and the operating priorities coming from the general manager as well as a technical supervisory relationship. The solution is dual reporting. But does the technical supervisor’s role have to be filled by a single individual? No. Consider the following scenario, which could be taken from an ordinary day at Intel. Our manufacturing manager is sitting in the cafeteria having a cup of coffee, and the manufacturing manager from another division (whose boss, the general manager, has a finance background) comes over. They start chatting about what’s going on in their respective divisions and begin to realize that they have a number of technical problems in common. Applying the theory that two heads are better than one, they decide to meet a bit more often. Eventually the meetings become regularly scheduled and manufacturing managers from other divisions join the two to exchange views about problems they share. Pretty soon a committee or a council made up of a group of peers comes into existence to tackle issues common to all. In short, they have found a way to deal with those technical issues that their bosses, the general managers, can’t help them with. In effect, they now have supervision that a general…"

"The third kind of managerial activity with high leverage is exercised by a person with unique skills and knowledge. One such person is an Intel marketing engineer responsible for setting prices for the product line. Hundreds of salespeople in the field can be negatively affected if prices are set too high: no matter how hard they may try, they won’t be able to get any business. Of course, if the prices were set too low, we would be giving money away."

"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."

"Management by Objectives: The Planning Process Applied to Daily Work 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. Or, as an old Indian saying puts it, “If you don’t know where you’re going, any road will get you there.” A successful MBO system needs only to answer two questions: 1.  Where…"

"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."

"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…"

"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. Everything else you can look at again. We should also be careful not to plan too frequently, allowing ourselves time to judge the impact of the…"

"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?"

"the true output of the planning process is the set of tasks it causes to be implemented. The output of Intel’s annual plan, for instance, is the actions taken and changes prompted as a result of the thinking process that took place throughout the organization. I, for one, hardly ever look at the bound volume finally called the Annual Plan. In other words, the output…"

"Built-In Leverage: How Many Subordinates Should You Have… An important component of managerial leverage is the number of subordinates a manager has. If he does not have enough, his leverage is obviously reduced. If he has too many, he gets bogged down—with the same result. 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…"

"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…"

"STAFF MEETINGS 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. As we will see later, peer interaction—especially decision-making by a group of peers—is not easy. Yet it is key to good management. The approach to decision-making that we advocate in the next chapter, as well as the workings of the principle of dual reporting (Chapter 9), depend on a group of peers working well together. By learning how this happens in staff meetings, where a group of peers get to know each other, and where the presence of a common supervisor helps peer interaction to develop, managers will be prepared to be members of other working bodies based on peer groups. Staff meetings also create opportunities for the supervisor to learn from the exchange and confrontation that often develops. In my own case, I get a much better understanding of an issue with which I am not familiar by listening to two people with opposing views discuss it than I do by listening to one side only."

"Basically, like other things managers do, decision-making has an output associated with it, which in this case is the decision itself. Like other managerial processes, decision-making is likelier to generate high-quality output in a timely fashion if we say clearly at the outset that we expect exactly that. In other words, one of the manager’s key tasks 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?"

"Another example of leverage that depends on timely action is what you do when you learn that a valued subordinate has decided to quit. In such a case, you must direct yourself to the situation immediately if you want to change the person’s mind. If you put it off, all your chances are lost. Thus to maximize the leverage of his…"

"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. The figure opposite shows that the supervisor’s most important roles are being a meeting’s moderator and facilitator, and controller of its pace and thrust. Ideally, the supervisor should keep things on track, with the subordinates bearing the brunt of working the issues. Staff meetings are an ideal medium for decision-making, because the group of managers present has typically worked together for a long time. The formal as well as informal authority of each individual has been well established, and everybody knows who likes to spout off, who tends to daydream, who knows what stuff and so on. A staff meeting is like the dinner-table conversation of a family, while other forums of interaction at work, involving people who don’t know each other very well, are like a group of strangers having to make a decision together."

"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…"

"Leverage can also be negative. Some managerial activities can reduce the output of an organization. I mean something very simple. Suppose I am a key participant at a meeting and I arrive unprepared. Not only do I waste the time of the people attending the meeting because of my lack of preparation—a direct cost of my carelessness—but I…"

"These time-management suggestions can be improved upon, I think, by applying our production principles. First, we must identify our limiting step: what is the “egg” in our work? In a manager’s life some things really have to happen on a schedule that is absolute. For me, an example is the class I teach. I know when it is going to meet, and I know I must prepare for it. There is no “give” in the time here, because over two hundred students will be expecting me. Accordingly, I have to create offsets and schedule my other work around this limiting step. In short, if we determine what is immovable and manipulate the more yielding activities around it, we can work more efficiently. A second production principle we can apply to managerial work is batching similar tasks. Any…"

"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…"

"To use quality assurance principles effectively, the manager should only go into details randomly, just enough to try to ensure that the subordinate is moving ahead satisfactorily. To check into all the details of a delegated task would be like quality assurance testing 100 percent of what manufacturing turned out."

"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…"

"Striving for the Output Sometimes no amount of discussion will produce a consensus, yet the time for a decision has clearly arrived. When this happens, the senior person (or “peer-plus-one”) who until now has guided, coached, and prodded the group along has no choice but to make a decision himself. If the decision-making process has proceeded correctly up to this point, the senior manager will be making the decision having had the full benefit of free discussion wherein all points of view, facts, opinions, and judgments were aired without position-power prejudice. In other words, it is legitimate—in fact, sometimes unavoidable—for the senior person to wield position-power authority if the clear decision stage is reached and no consensus has developed. It is not legitimate—in fact, it is destructive—for him to wield that authority any earlier. This is often not easy. We Americans tend to be reluctant to exercise position power deliberately and explicitly—it is just “not nice” to give orders. Such reluctance on the part of the senior manager can prolong the first phase of the decision-making process—the time of free discussion—past the optimum point, and the decision will be put off."

"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. This is important for both the junior and senior manager. The junior person will benefit from the comments, criticisms, and suggestions of the senior manager, who in turn will get a different feel for problems from people familiar with their details. Such meetings are also a source of motivation: managers making the presentations will want to leave a good impression on their supervisor’s supervisor and on their outside peers. Who are the players at an operation review? The organizing manager, the reviewing manager, the presenters, and the audience. Each of these players has a distinct role to play if the review is to be a useful one. 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. Though it’s hard to judge in advance the time needed for any discussion, the supervisor has presumably had more experience running meetings. In any case, he should pace the presenters using inconspicuous gestures, so that the manager talking doesn’t suddenly find himself out of time with only half his points covered. 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. 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…"

"The third kind of managerial activity with high leverage is exercised by a person with unique skills and knowledge. One such person is an Intel marketing engineer responsible for setting prices for the product line. Hundreds of salespeople in the field can be negatively affected if prices are set too high: no matter how hard they may try, they won’t be able to…"

"be. 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. Hence, a “production control” system, as recorded on various calendars, can take shape, which means that a scheduled meeting will have minimum impact on other things people are doing. At Intel we use three kinds of process-oriented meetings: the one-on-one, the staff meeting, and the operation review. ONE-ON-ONES 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. By talking about specific problems and situations, the supervisor teaches the subordinate his skills and know-how, and suggests ways to approach things. At the same time, the subordinate provides the supervisor with detailed information about what he is doing and what he is concerned about. From what I can tell, regularly scheduled one-on-ones are highly unusual outside of Intel. When I ask a manager from another company about the practice, I usually get an “Oh no, I don’t need scheduled meetings with my supervisor [or subordinate]; I see him several times a day…” But there is an enormous difference between a casual encounter by a supervisor and a subordinate, or even a meeting (mission-oriented) to resolve a specific problem, and a one-on-one."

"From my experience a large portion of managerial work can be forecasted. Accordingly, forecasting those things you can and setting yourself up to do them is only common sense and an important way to minimize the feeling and the reality of fragmentation experienced in managerial work. Forecasting and…"

"Where should a one-on-one take place? In the supervisor’s office, in the subordinate’s office, or somewhere else? I think you should have the meeting in or near the subordinate’s work area if possible. A supervisor can learn a lot simply by going to his subordinate’s office. Is he organized or not? Does he repeatedly have to spend time looking for a document he wants? Does he…"

"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. But again, leverage can be positive or negative. An example of leverage that I hope is high and positive is my talk in the orientation course. During the two hours I have, I try to impart a great deal of information about Intel—its history, its objectives, its values, its style—to a group of two hundred new employees. Besides what I say specifically, my approach toward…"

"What is the role of the supervisor in a one-on-one? He should facilitate the subordinate’s expression of what’s going on and what’s bothering him. The supervisor is there to learn and to coach. Peter Drucker sums up the supervisor’s job here very nicely: “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. I’d like to suggest some mechanical hints for effective one-on-one meetings. First, 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. A real time-saver is using a “hold” file where both the supervisor and subordinate accumulate important but not altogether urgent issues for discussion at the next meeting. This kind of file applies the production principle of batching and saves time for both involved by minimizing the need for ad hoc contact—like phone calls, drop-in visits, and so on—which constitute the interruptions we considered earlier. The supervisor should also encourage the discussion of heart-to-heart issues during one-on-ones, because this is the perfect forum for getting at subtle and deep work-related problems affecting his subordinate. Is he satisfied with his own performance? Does some frustration or…"

"A manager can do his “own” job, his individual work, and do it well, but that does not constitute his output. If the manager has a group of people reporting to him or a circle of people influenced by him, the manager’s output must be measured by the output created by his subordinates and associates. 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."

"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. 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."

"A Day from My Life Time and Activity Explanation  (Type of Activity) 8:00–8:30   Met with a manager who had submitted his resignation to leave for another company. I listened to his reasons (information-gathering), felt he could be turned around and saved for Intel. Encouraged him to talk to certain other managers about a career change (nudge), and decided to pursue this matter with them myself (decision-making). Incoming telephone call from a competitor. Call was ostensibly about a meeting of an industry-wide society, but in reality he was feeling out how I saw business conditions. I did the same. (Information-gathering.) 8:30–9:00   Read mail from the previous afternoon. I scribbled messages on about half of it, some of which were expressions of encouragement or disapproval, others exhortations to take certain types of action (nudges). One was the denial of a request to proceed with a particular small project (decision-making). (Of course, information-gathering took place in all of these cases, too.) 9:00–12:00   Executive Staff Meeting (a regular weekly meeting of the company’s senior management). Subjects covered at this particular one:   —Review of the prior month’s incoming order and shipment rates. (Information-gathering) —Discussion to set priorities for the upcoming annual planning process. (Decision-making) —Review of the status of a major marketing program (scheduled subject). This came about through a prior decision that this program was faltering and required review. We found it was doing a little bit better than before (information-gathering), but the presentation still elicited a lot of comments and suggestions (nudges) from various members of the audience. —Review of a program to reduce the manufacturing cycle time of a particular product line (scheduled subject). The presentation indicated that the program was in good shape. (It represented only information-gathering; no further action was stimulated.) 12:00–1:00   Lunch in the company cafeteria. I happened to sit with members of our training organization, who complained about the difficulty they had in getting me and other senior managers to participate in training at our foreign locations (information-gathering). This was news to me. I made a note to follow up with my own schedule, as well as with my staff, and to nudge them into doing a better job supporting the foreign training program. 1:00–2:00   Meeting regarding a specific product-quality problem. The bulk of the meeting involved getting sufficient information on the status of the product and the corrective action that had been implemented (information-gathering). The meeting ended in a decision made by the division manager, with my concurrence, to resume shipment of the product. 2:00–4:00   Lecture at our employee orientation program. This is a program in which senior management gives all professional employees a presentation describing the objectives, history, management systems, etc., of the company and its major…"

"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."

"Indicators as a Key Tool A hungry public has loved the breakfast you’ve been serving, and thanks to the help of your many customers and a friendly banker, you’ve created a breakfast factory, which among other things uses specialized production lines for toast, coffee, and eggs. As manager of the factory, you have a substantial staff and a lot of automated equipment. But to run your operation well, you will need a set of good indicators, or measurements. Your output, of course, is no longer the breakfasts you deliver personally but rather all the breakfasts your factory delivers, profits generated, and the satisfaction of your customers. 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."

"To apply the basic principle of production, you need to build the sequence here around its most expensive feature, which is the students’ trip to the plant, thanks to the cost of travel and the time that Intel managers spend with the candidates. To minimize the use of this step per final college hire, we obviously have to increase the ratio of accepted offers to applicants invited to visit the plant, which we do by using phone interviews to screen people before issuing invitations. The technique saves money, substantially increases the ratio of offers extended per plant visit, and reduces the need to use the expensive limiting step per hire. The principle of time offsets is also present here. Working back from the time the students will graduate, the recruiter staggers the various steps involved to allow time for everything—on-campus interviews, phone screening, plant visits—to take place at the appropriate times during the months preceding graduation."

"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. We can use de facto standards, inferred from the trend data, to forecast the number of people needed to accomplish various anticipated tasks. By rigorous application of the principles of forecasting, manpower can be reassigned from one area to another, and the headcount made to match the forecasted growth or decline in administrative activity. Without rigor, the staffing of administrative units would always be left at its highest level and, given Parkinson’s famous law, people would find ways to let whatever they’re doing fill the time available for its completion. 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."

"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. The use of indicators,…"