Focus on high-leverage activities.
November 17, 2022
"High Output Management" is a book by Andy Grove, former CEO of Intel, that helps people to understand how they can manage their teams more efficiently towards high-leverage tasks. I found this book relevant for software engineering organizations and thought I'd share some notes on it that may be relevant to others.
What is Leverage?
Leverage = impact produced / time invested.
It is the ability to get more done with less effort, time or money.
The key component of leverage is that it allows you to accomplish things faster than if you worked alone.
"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." – Andrew Grove
There are two types of leverage: personal and organizational.
Personal leverage refers to the tools, techniques and knowledge you have that allow you to do more with less effort. Organizational leverage refers to teams and structures that allow you to accomplish more with less time or money. Organizational leverage is often overlooked, but it's one of the most important components to building a high-output management team.
If you improve your personal effectiveness, maybe you can make things 10% better. If you improve the effectiveness of an organization of 30 people by 10%, thats effectively 3 software engineers.
To increase your leverage, ask yourself before any activity:
- What if this was simple? (decrease time cost)
- What if this was huge? (increase value)
- What else could I be doing? (opportunity cost)
Another way to think about leverage is in terms of a lever, which lets you apply a little bit of force, have it amplified, and then move large boulders.
Great managers know the benefits of high-leverage activities.
A manager's output = output of their organization + output of the neighboring organizations under their influence
In his book, Grove writes that a manager's job goes beyond "managing people" to maximizing output from teams and making sure everyone is performing at their best.
A great manager is a multiplier for performance, lifting the level of everyone on their team. A poor leader drains energy from those around them. We've likely all seen a team whose manager is so ineffective that not only does the team suffer, but teams around them as well.
Every activity you do as a manager has an impact; great managers correctly assess which activities have the most significant impacts and give these appropriate time and attention.
High Leverage Tasks
High leverage activities are those that have a lasting impact on many people, helping to shape the future by influencing others' behavior. Examples:
- Recruiting, onboarding and training are crucial activities that have a huge impact on your organization. It's important to get them right!
- Rewarding performance is an important way to signal what kind of behavior will be rewarded throughout your organization.
- Managers should also develop cross-team communications and build relationships with colleagues from other departments, since this can influence people outside of a manager's direct reports.
Manage people according to their innate abilities and strengths.
Grove is indifferent about management styles, in keeping with his engineering background. For him, there's no such thing as a "good" or "bad" style—only effective and ineffective ones. And that brings us to another of Grove's most important contributions: task-relevant maturity (TRM).
"Don't confuse people's Task-Relevant Maturity with their general competence."
The idea of TRM is that managers should be aware and receptive to the strengths—and weaknesses—of each employee. Managers should use this awareness to help employees succeed on tasks that fit their innate abilities, and avoid assigning them tasks that don't.
There are two kinds of meetings. process-oriented meetings = recurring meetings for knowledge sharing. mission-oriented meetings = ad-hoc meetings for a specific decision to be made.
While 1-1 meetings help build psychological safety and trust, they also serve a purpose for the manager:
- 1-1s help you maximize your productivity. When used correctly, 1-1 time is an effective way to boost both the quantity and quality of work produced by individuals on a team.
- If your reports seem to be having trouble with their work, you should calibrate on TRM. Did they take on too much responsibility? Do they need help completing projects or tasks? Calibrating is a good way to discuss these issues in person with your employees
- Provide feedback. 1-1 meetings can be used not only to discuss project tasks, but also as a forum in which to provide more general performance and developmental feedback—to help employees improve their contribution over time.
Grove believes that spending time developing 1-1 relationships with your direct reports—though it sometimes takes up more time than you have and is often quite challenging—can pay great dividends.
He reasons that, since the people who report directly to you are going to be responsible for much of what happens in your company or division (and because they will likely make decisions about moving on from their roles as part of opportunities presented during these meetings), improving their productivity can lead to significant rewards for everyone involved.
No issue should be discussed in a group unless it affects more than two people. If an issue does affect only two individuals, they should break off and continue their exchange later on down the road. The manager's most important role is to facilitate the meeting and control its pace so that all members feel heard. Managers should delegate authority to their reports, providing support and guidance whenever necessary. Conflict among peers is crucial to a group's decision-making process—when this happens it helps everyone learn more about the issue at hand.
People who don't otherwise have opportunities to work or meet with each other can use these meetings as a medium of interaction.
Before you schedule a meeting, make sure you know what your objective is and whether the meeting itself is necessary. If someone invites you to attend one—especially if they are not the organizer or host of that meeting—make sure it's worth your time before accepting.
The organizer should send out an agenda that clearly states the purpose of the meeting and what role each person there is expected to play. If a meeting is held to discuss and decide on an important issue, the results of that discussion should be recorded in notes and distributed as soon as possible.
You need to be a master of information management
In order for managers to be effective, they must understand and control the flow of information inside their company. This is why managers should be master information gatherers. They need to know what's going on in their organization, from the bottom up and from the top down. They need to have a clear vision of how things work in order to make good decisions about how to change them.
"Information is the basis of all managerial output, which is why I spend so much time gathering it"
Opening the lines of communication.
Grove believes in transparency—transparency, that is to say being completely honest with others; not just because honesty is a virtue but also, as he would put it: 'because you can only make the best decisions possible if you are aware of all relevant information.'"
Good leaders promote the flow of ideas, facts, experiences and perspectives.
It may seem obvious, but how do you actually make this happen?
Here are a few examples from the book that demonstrate this approach:
- When making a decision, determine who the actual decision maker is; otherwise you may succumb to what Grove calls "peer group syndrome"—which I think we have all experienced: being in a group where everyone contributes their ideas but it's unclear how to move forward. Or conflicting views are never resolved.
- When confronted with a difficult decision, Grove recommends first creating a framework for how it will be made. For instance, his team at Intel faced deciding where to build a manufacturing plant—many stakeholders and tough questions but also ambiguity & lots at stake. They made a high-quality decision by establishing clear guidelines for making decisions.
- Avoid vetoes, even if they seem reasonable. A decision backed by a veto may be fair and well-reasoned — but it won't look that way to other members of the group over time.
- Write a process for making decisions. Grove uses a few sports analogies in the book—and building racetracks is one of them, because you know immediately whether you've met your goal or not .
Andy Grove thinks about decisions in three ways:
The first is timing. People often make decisions too quickly, especially when they're under stress. The second is scale. Grove says that it's important to remember how big your decision will be in the end—and whether it affects just one person or everyone on a team. The third is perspective. He recommends thinking about how your decision will look from different angles and perspectives; this can help you avoid pitfalls like making assumptions without evidence or forgetting to consider all of the consequences of your choices.
All your decisions should be made by considering six questions:
- What decision is needed?
- By when?
- Who should be consulted?
- Who decides?
- Who ratifies or vetoes?
- Who needs to be informed?
To make a good decision, you must assemble the best minds and discussions to answer these questions. If you can effectively do this, then your decision will be clear—and it is even more important to have people's buy-in on decisions so that they are willing participants in their own output.
Managers often lack some technical knowledge related to the lower levels. So, decisions should be made at the lowest competency level by someone with direct experience in that area and a broader understanding of similar problems elsewhere in the company or industry. If you can't find one person who offers this, build a group of people who do.
Andy Grove's perspective on planning is that you should plan for the future, but not too far into it. Plans need to be flexible, and they need to be able to change fast when new information comes in. He suggests that planning should focus on weekly or monthly cycles rather than quarterly or annual ones.
When establishing long-term plans, it is crucial to take into account three important factors:
- Size your market.
- Know where you are.
- Find a hypothetical path to meet demand.
Grove recommends setting up cascades of objectives and key results (OKRs), sub-goals that help move you toward your long-term plans. This cascading of results should occur across organizations, meaning that one manager's key objectives are used to set their direct reports' targets. Then, the manager can delegate key results to a staff member and hold that person accountable for meeting them.
Grove also emphasizes that OKRs can provide clarity. However, you should be careful to avoid letting your organization become too reliant on them—instead of spending time considering their meaning and their impact, employees may simply strive for numbers within each category.
"High Output Management" takes a broad, comprehensive look at the roles and responsibilities of a manager. It puts forth that managers' primary tasks is to boost productivity by improving others' performance and getting more out their employees.
This means that a manager should choose activities with the greatest impact on overall output, and which are carried out by those reporting to their peers. For example, a manager may only spend an hour each week giving the team direction, but that time yields tremendous value in terms of what it produces.
This book is great for anyone who wants to become a better manager or improve their skills. It provides valuable frameworks and strategies for all kinds of common managerial tasks, such as:
- Delegation - To maximize leverage, a manager needs to delegate work to an optimal number of their team. Poor delegation results in micro-management and errors; effective delegation maximizes leverage.
- Motivating employees - Eliciting peak performance means creating a workplace culture where employees feel challenged and inspired to do their best work.
- Making decisions - In decision-making, there is a fragile power dynamic that needs to be handled carefully. Managers should encourage free and open discussion amongst all parties until consensus emerges. If no consensus arises naturally, the manager must push for a resolution.
- Meetings - Meetings are expensive to companies, and they should be used with care. Among the different types of meetings: one-on-one's, staff meetings and operational reviews—all of which should have clear frameworks for getting things done in a timely manner. One-off meetings should be carefully planned, since they are often scheduled without a clear purpose and with too many participants.
- Performance reviews - Performance reviews can be mistaken for simple assessment and compensation tools. But their fundamental purpose is to help improve performance of the report being reviewed. Because a manager's review has such long-lasting effects on the performance of their reports, great care should be taken in preparing and delivering them