Hybrid Organizations
By Andy Grove
The game of management is a team game: a manager’s output is the output of the organizations under his supervision or influence.
We now discover that management is not just a team game, it is a game in which we have to fashion a team of teams, where the various individual teams exit in some suitable and mutually supportive relationship with each other.
Alfred Sloan summed up decades of experience at General Motors by saying, “Good management rests on a reconciliation of centralization and decentralization.” Or, we might say, on a balancing act to get the best combination of responsiveness and leverage.
We are 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 organizations are analogous to individual fighting units, which are provided with blankets, aerial surveillance, intelligence/information, 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.
The functional groups can be viewed as if they were internal subcontractors. Sales, manufacturing, finance, or data processing can all be regarded as functional groups, which, as internal subcontractors, provide services to all the business units.
Some two thirds of Intel’s employees work in the functional units, indicating their enormous importance. What are some of the advantages of organizing so much of the company in such groups?
Important advantage is that resources can be shifted and reallocated to respond to the changes in corporate-wide priorities. For instance, because manufacturing is organized functionally, we can change the mix of product being made to match need as perceived by the entire corporation. And the advantage here is that the expertise of specialists – know-how managers, such as the research engineers who work in technology development – can be applied across the breadth of the entire corporation, giving their knowledge and work enormous leverage. Finally, Intel’s functional groups allow the business units to concentrate on mastering their specific trades rather than having to worry about computers, production, technology, and so forth.
If each business unit did its own manufacturing, shifting capacity away from one unit to another would be a cumbersome and sticky exercise.
What are some of the advantages of organizing much of the company in a mission oriented from?
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! 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. All other considerations favor the functional-type of organization.
No matter how many times we have examined possible organizational forms, we have always concluded that there is simply no alternative to the hybrid organizational structure. So that is how Intel is organized today.
All large organizations with a common business purpose end up in a hybrid organizational form. Every large company or enterprise that I know is organized in a hybrid form.
The use of the hybrid organizational form doesn’t even necessarily depend on how large a business or activity is.
One medium size law firm ended up forming an executive committee that would not interfere with the legal (mission-oriented) works of the individual attorneys but would address the acquisition and allocation of common shared resources.
This is much like the way any traditional family is organized. The business unit is analogous to the husband, who is provided with breakfast and dinner, clean cloth, and so forth by the functional organization, the woman at home, who supplies such services to his husband. Because the husband does not have to maintain his own household chores, he can concentrate on a specific mission - namely earning a living for his family.
Do any exception to the universality of hybrid organization? The only exceptions are conglomerates, which are typically organized in a totally mission-oriented form. They are an exception to this hybrid rule because they do not have a common business purpose. The various divisions (or companies) in this case are all independent and bear no relationship to one another beyond the conglomerate profit and loss statement. But within each business unit of the conglomerate, the organization is likely structured along the hybrid line.
Of course, each hybrid organization is unique because a single organization may very well shift back and forth between the two poles, movement that should be brought on by pragmatic considerations. The shift back and forth between the two types of organizations can and should be initiated to match the operational styles and aptitudes of the managers running the individual units.
Sooner or later all reasonably large companies must cope with the problems inherent in the workings of a hybrid organization. The most important task before such an organization is the optimum and timely allocation of its resources and the efficient resolution of conflicts arising over that allocation. Though this problem may be very complex, “allocators” working out of some central office are certainly not the answer. If we at Intel tried to resolve all conflict and allocate all resources at the top, we would begin to resemble the group that ran the Communism economy.
Instead the answer lies with the middle managers. Within a company, they are, in 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 the middle managers to succeed at this high-leverage task, two things are necessary:
First, they must accept the inevitably of the hybrid organizational form if they are to serve its working.
Second, they must develop and master the practice through which a hybrid organization can be managed. This is dual reporting.
Dual Reporting
When our company was young and small, we stumbled onto dual reporting almost by accident. At a stuff meeting we were trying to decide to whom the security personnel at our new outlying plants should report. We have two choices.
One would have the employees report to the plant manager. But a plant manager, by background, is typically an engineer or a manufacturing person who knows very little about security issues and cares even less.
The other choice would have them report to the security manager at the main plant. He hired them in the first place, and he is expert who sets the standards that the security officers are supposed to adhere to throughout the company. And it was clear that security procedures and practices at the outlying plants had to conform to some kind of corporate standard. But the security manager works at corporate headquarters and not at the outlying plant, so how would he know if the security personnel outside the main plant even showed up, or came in late, or otherwise performed badly? He wouldn’t.
The solution would be that the security personnel should report jointly to the corporate security manager and the local plant manager. The corporate security manager would specify how the job ought to be done, and the local plant manager would monitor how it was being performed day by day.
Could an employee in fact have two bosses? The answer is a tentative “yes.”
The need for dual reporting is actually quite fundamental.
Among other things our new general manager has no experience with the 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 want the immediacy and the operating priorities coming from the general manager as well as a technical supervisory relationship. The solution is dual reporting.
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 the marketplace needs.
Does the technical supervisor’s role have to be filled by a single individual? No.
All the manufacturing managers can build a committee or a council made up of a group of peers to tackle the issue common to all. In short, there is 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 manager competent in manufacturing could have given them, but the supervision is being exercised by a peer group. The manufacturing managers report to two supervisors: to this group and to their respective general managers.
To make such a body work requires the voluntary surrender of individual decision-making to the group. Being a member means you no longer have complete freedom of individual action, because you must go along with the decisions of your peers in most instances. Surrendering individual decision-making depends on trusting the soundness of actions taken by your group of peers. The point is that a strong and positive corporate culture is absolutely essential if dual reporting and decision-making by peers are to work.
By analogy, think of yourself as one of a couple who decide to take a vacation with another couple. You know that if you go together you will not be free to do exactly what you want to do when you want to do it, but you go together anyway because you’ll have more fun, even while you’ll have less freedom.
This system makes a manager’s life ambiguous, and most people don’t like ambiguity. Nevertheless, the system is needed to make hybrid organizations work. Hybrid organizations and the accompanying dual reporting principle, like a democracy, are not great in and of themselves. They just happen to be the best way for any business to be organized.
To make hybrid organization work, you need a way to coordinate the mission-oriented units and functional groups so that resources of the functional groups are allocated to meet the needs of the mission oriented units.
Consider how the controller works at Intel. His professional methods, practices, and standards are set by the functional group to which he belongs, the financial organization.
The divisional manager gives the controller mission-oriented priorities by asking him to work on specific business problems.
The finance manager makes sure that the controller is trained to do his work in a technically proficient manner, supervises and monitors his technical performance, and looks after his career inside finance, promoting him, perhaps, to the position of controller of a bigger, more complex division if he perform well.
Again this is dual reporting, the management principle that enables the hybrid organization form to work. This example has parallels throughout a corporation.
Consider advertising, the division-marketing managers should control most of their own advertising messages. Because each division clearly understands its own strategy best, and therefore presumably best understands what its advertising message should be and to whom it should be aimed.
But a coordinating body of peers consisting of the various divisional marketing managers and perhaps chaired by the corporate merchandising manager should provide the necessary functional supervision for all involved. This body would choose the advertising agency, for instance, and determine the graphic image to which all divisional ads should confirm. In this way the ads ought to project a consistent image that is right for everybody. Taken together represent a much more complete solution to the customers’ needs than what can be provided by an individual division. Yet the specific selling message communicated by an individual ad would be mainly left to the divisional people. Here the customer and hence the manufacturer clearly benefit if all it advertising stories are told in a coherent, coordinated fashion. Also, the advertising sells not just a specific product but the entire corporation as well. Dual reporting enables us to communicate individual product and market messages and maintain a corporate identity at the same time.
Dual reporting can certainly tax the patience of the marketing managers, as they are now also required to understand the needs and thoughts processes of their peers.
We should merciless slash away unnecessary bureaucratic hindrance; apply work simplification to all we do. But we should not expect to escape from complexity by plying with reporting arrangements. Like it or not, the hybrid organization is the fundamental phenomenon of organizational life.
The Two-Plane Organization
In her daily work, Cindy - a process engineer, keeps things going by manipulating the manufacturing equipment, watching the process monitors, and making adjustments when necessary. Cindy reports to a supervising engineer, who in turn reports to the engineering manager of the plant.
But Cindy has another job, too. She meets formally once a month with her counterparts from the other production plants to identify, discuss, and solve problems related to the process for which they are each responsible in their respective plants. This coordinating group also works to standardize procedures used at all plants. The work of Cindy’s group, and others like it is supervised by another more senior group, which is made up of the engineering managers from all plants.
Cindy’s two responsibilities won’t fit on a single organization chart. Instead, we have to think of the coordinating group as existing on a different chart, or on a different plane. No one would confuse these two roles: clearly operating on different planes. Our ability to use Cindy’s skill and know-how in two different capacities makes it possible for her to exert a much larger leverage at Intel.
In her main job, her knowledge affects the work that takes place in one plant; in her second, through what she does in the process-coordinating group, she can influence the work of all plants. So we see that the existence of such groups is a way for managers, especially know-how managers, to increase their leverage.
If a person can operate in two planes, he can operate in three. Cindy could also be part of a task force to achieve a specific result in which her expertise is needed.
It could also turn out that people who are in a subordinate/supervisory relationship in one plane might find the relationship reverse 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.
The point is that two- or multiple-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 multiple-plane organization enables me to serve as a foot soldier rather than as a general when appropriate and useful. This gives an organization important flexibility.
Many of the groups we are talking about 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.
The techniques that we have to master to make hybrid organizations work are dual or multiple reporting and also decision making by peer groups. The key factor common to all is the use of cultural values as a mode of control.
Modes of Control
Our behavior in a work environment can be controlled by three invisible and pervasive means. These are:
1. Free-market forces
2. Contractual obligations
3. Cultural values
1. Free-market forces
In the free market, you’ll make a decision based on one thing: your own self-interest. For an example you want to buy the tires you think will meet your needs at the lowest cost to you. It is quite unlikely that any personal feelings toward the tire dealer will come to mind. You are not concerned about his welfare – there is no much chance that you would say to him that he isn’t charging you enough for the tires.
The free market can easily establish a price for something as simple as tires. But for much else that changes hands in a work or business environment, value is hard to establish. The point is that how much an engineer is worth in a group cannot be pinned down by appealing to the free market. In fact, if we bought engineering work by the “bit,” I think we would end up spending more time trying to decide the value of each bit of contribution than the contribution itself is worth. Here trying to use free-market concepts becomes quite inefficient.
2. Contractual obligations
For an example, it’s a law establish by society at large that everybody stops at a red light and you unquestioningly accept and live by it. Vehicular chaos would reign if all drivers had not entered into a contract to stop. The traffic cop monitors adherence and penalizes those who break the law.
You say to the engineers, “Okay, I’ll retain your services for a year for a set amount of money, and you will agree to do a certain type of work in return. We’ve now entered into contract. I’ll give you an office and a terminal, and you promise me to do the best you can to perform your task.
The nature of control is now based of contractual obligations, which define the kind of work you will do and the standards that will govern it. So you must give to me as part of the contract the right to monitor and evaluate and, if necessary, correct your work. We agree on other guidelines and work out rules that we will both obey.
In a contractual obligation, management has a role in setting and modifying the rules, monitoring adherence to them, and evaluating and improving performance.
3. Cultural values
You come upon the scene of a major accident. Quite likely, you’ll forget about laws like not stopping on a freeway and also forget about your own self-interest: you’ll probably do everything you can to help the accident victims and, in the meantime, expose yourself to all kinds of dangers and risks. What motivates you now is not at all that when you were shopping for tires or stopping at the red light: not self-interest or obeying the law, but concern about someone else’s life.
The most important characteristic of control, which is based on cultural value, is that the interest of the larger group to which an individual belongs takes precedence over the interest of individual himself. When such values are at work, some emotionally loaded words come into play – words like trust – because you are surrendering to the group your ability to protect yourself. And for this to happen, you must believe that you all share a common set of values, a common set of objectives, and common set of methods. These, in turn, can only be developed by a great deal of common, shared experience.
For cultural values, management has to develop and nurture the common set of values, objectives, and methods essential for the existence of trust. How do we do that?
One way is by articulation, by spelling out these values, objectives, and methods.
The other, the more important way, is by example. If our behavior at work will be regarded as in line with the values we profess, that fosters the development of a group culture.
The Most Appropriate Mode of Control
Given a certain set of conditions, there is always a most appropriate mode of control, which we as managers should find and use. How do we do that? There are two variables here: first, the nature of a person’s motivation; and second, the nature of environment in which he works. An imaginary composite index can be applied to measure an environment’s complexity, uncertainty, and ambiguity, which we’ll call the CUA factor.
Cindy, the process engineer, is surrounded by tricky technologies, new and not fully operational equipment, and development engineers and production engineers pulling her in opposite directions. Her working environment, in short, is complex.
Bruce, the marketing manager, has asked for permission to hire more people for his grossly understuffed group; his supervisor waffles, and Bruce is left with no idea if he’ll get the go-ahead or what to do if he doesn’t. Bruce’s working environment is uncertain.
Mike, whom we will now introduce as an Intel transportation supervisor, had to deal with so many committees, councils, and divisional manufacturing managers that he didn’t know which, if any, end was up. He eventually quit, unable to tolerate the ambiguity of his working environment.
It is our task as managers to identify which mode of control is most appropriate. When group-interest orientation and the CUA factor are both high, the cultural values mode becomes the best choice. When the CUA factor is high and individual motivation is based on self-interest, no mode of control will work well. This situation, like every man for himself on a sinking ship, can only produce chaos.
Let’s apply our model to the work of a new employee. What is happening? It is very much best on self-interest. So you should give him a clearly structured job with a low CUA factor. If he does well, he will begin to feel more at home, worry less about himself, and start to care more about his team. He learns that if he is on a boat and wants to get ahead, it is better for him to help row than to run the bow. The employee can then be promoted into a more complex, uncertain, ambiguous job. (These tend to pay more).
As time passes, he will continue to gain an increasing amount of shared experience with other members of the organization and will be ready to tackle more and more complex, ambiguous, and uncertain tasks. This is why promotion from within tends to be the approach favored by corporations with strong corporate cultures.
Bring young people in at relatively low-level, well defined jobs with low CUA factors, and over time they will share experiences with peers, supervisors, and subordinates and will learn the values, objectives, and methods of the organization. They will gradually accept, even flourish in, the complex world of multiple bosses and peer-decision-making.
But what do we do when for some reason we have to hire a senior person from outside the company? Like any other new hire, he too will come in having high self-interest, but inevitably we will give him an organization to manage that is in trouble; after all, that was our reason for going outside. So not only does our new manager have a tough job facing him, but his working environment will have a very high CUA. Meanwhile he has no base of common experience with the rest of the organization and no knowledge of the methods used to help him work. All we can do is to cross our fingers and hope he quickly forgets self-interest and just as quickly gets on top of his job to reduce his CUA factor.
Modes of Control at Work
Bob’s coming to work in the first place represents a transaction governed by contractual obligations. He is paid a set of salary for doing his best, which implies that he has to show up. And his willingness to participate in strategic planning activities shows cultural values at work. This is work outside of his regular job as defined contractually, and so represents extra effort for him. But he does it because he feels the company needs what he has to contribute.
At one time, one of our divisions had serious problems, leaving the sales engineers with no product to sell for nearly a year. They could have left Intel and immediately gotten other jobs and quick commission elsewhere, but by and large they stayed with us. They stayed because they believed in the company and had faith that eventually things would get better. Belief and faith are not aspects of the market mode, but stem from adherence to cultural values.
Managerial Leverage
By Andy Grove
Activities are what managers do as they try to create a final result, or output.
All these are necessary to achieve output. But output and activity are by no means the same thing.
What is a manager’s output?
At Intel, if a manager is in charge of a wafer fabrication plant, his output consists of completed, high quality, fully processed silicon wafers.
If he supervises a design group, his output consists of completed designs that work correctly and are ready to go into manufacturing.
If a manager is the principle of a high school, his output will be trained and educated students who have either completed their schooling or are ready to move on to the next year of their studies.
If a manager is a surgeon, his output is a fully recovered, healed patient.
We can sum matters up with the proposition that:
A manager output = The output of his organization
+
The output of his neighboring organization under his influence
The output of a manager is a result achieved by a group either under his supervision or under his influence.
Cindy, an engineer at Intel, supervises an engineering group in a wafer fabrication plant. As a supervising engineer, she performs activities that increase the output of the plant in which she works.
She also spends some of her time as a member of an advisory body that establishes standard procedures by which all the plants throughout the company perform a certain technical process. As a member of the advisory body, she provides specialized knowledge that will influence and increase the output of neighboring organizations – all the other Intel wafer fabrication plants.
In both roles, Cindy contributes to the output of the wafer fabrication plants.
Business and education and even surgery represent work done by teams. Business is a team activity. And, always, it takes a team to win.
If a 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.
A manager can do his own job, his individual work, and do it well, but that does not constitute his output. While the manager’s own work is clearly very important, that in itself does not create output. His organization does.
By analogy, a coach or a quarterback alone does not score touchdowns and win games. Entire teams with their participation and guidance and direction do.
If a manager is a knowledge specialist, a know-how manager, his potential for influencing neighboring organization 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.
Individuals who gather and disseminate know-how and information should also be seen as middle managers, because they exert great power within the organization.
Consider my own managerial role. 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 type of activity will, I hope, contribute 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.
What we actually do is difficult to pin down and sum up. Much of it often seems so inconsequential that our position in the business hardly seems justified. Part of the problem here stems from the distinction between our activities, which is what we actually do, and our output, which is what we achieve.
A manager must keep many balls in the air at the same time and shift his energy and attention to activities that will most increase the output of his organization. In other words, he should move to the point where his leverage will be the greatest.
Much of my day is spent acquiring information. I use many ways to get it. I read standard reports and memos but also get information ad hoc. I talk to people inside and outside the company, managers at the other firms or financial analysts or members of the press. Customer complaints, both external and internal, are also a very important source of information. I dealt with things in seemingly random fashion.
For example, the Intel training organization, which I serve as an instructor, is an internal customer of mine. To cut myself off from the casual complaints of people in that group would be a mistake because I would miss getting an evaluation of my performance as an internal supplier.
People also tell us things because they want us to do something for them; to advance their case, they will sometimes shower us with useful information. This is something we should remember, apart from whether we do as they ask.
I have to confess that the information most useful to me, and I suspect most useful to all managers, comes from quick, often, casual verbal exchanges. This usually reaches a manager much faster than anything written down. And usually, the more timely the information, the more valuable it is.
So why are written reports necessary at all? They obviously can’t provide timely information.
What they do is constitute an archive of data, help to validate ad hoc inputs, and catch, in safety-net fashion, anything you may have missed.
But reports also have another totally different function. As they are formulated and written, the author is forced to be more precise than he might be verbally. Hence their value stems from the discipline and the thinking the writer is forced to impose upon himself as he identifies and deals with trouble spots in his presentation. Reports are more medium of self-discipline than a way to communicate information. Writing the report is important; reading it often is not.
There are many parallels to this:
· Our capital authorization process itself is important, not the authorization itself. To prepare and justify a capital spending request, people go through a lot of soul-searching analysis and juggling, and it is this mental exercise that is valuable. The formal authorization is useful only because it enforces the discipline of the process.
· The preparation of an annual plan is in itself the end, not the resulting bound volume.
To improve and maintain your capacity to get information, you have to understand the way it comes to you. There is an especially efficient way to get information, much neglected by most managers. That is to visit a particular place in the company and observe what’s going on there. If a manager walks through an area and sees a person with whom he has a two-minute concern, he can simply stop, cover it, and be on his way. Ditto for the subordinate when he initiates conversation. Accordingly, such visits are an extremely effective and efficient way to transact managerial business.
A manager not only gathers information but is also a source of it. He must convey his knowledge to members of his own organization and to other groups he influences.
Beyond relaying facts, a manager must also communicate his objectives, priorities, and preferences as they bear on the way certain tasks are approached. This is extremely important, because only if the manager imparts these will his subordinates know how to make decisions themselves that will be acceptable to the manager, their supervisor. Thus, transmitting objectives and preferred approaches constitutes a key to successful delegation.
It’s obvious that your decision-making depends finally on how well you comprehend the facts and issues facing your business. This is why information gathering is so important in a manager’s life.
Other activities – conveying information, making decisions, and being a role model for your subordinates – are all governed by the based of information that you, the manager have about the tasks, the issues, 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 time of my day doing it.
Through your suggestion you nudge an individual or a meeting in the direction you would like. This is immensely important managerial activity in which we engage all the time, and it should be carefully distinguished from decision making that results in firm, clear directives. In reality, for every unambiguous decision we make, we probably nudge things a dozen times.
While we move about, doing what we regards as our jobs, we are role models for people in our organization – our subordinates, our peers, and even our supervisors. Nothing leads as well as example. Values and behavioral norms are simply not transmitted easily by talk or memo, but are conveyed very effectively by doing and doing it visibly.
A supervisor in a company, large or small, who takes his work seriously, exemplifies to his associates the most important managerial value of all.
The single most important resource that we allocate from one day to the next is our own time. Our own time is the one absolutely finite resource we each have. Its allocation and use therefore deserve considerable attention. How you handle your time is, in my view, the single most important aspect of being a role model and leader.
In a typical day of mine one can count some twenty-five separate activities in which I participated, mostly information-gathering and –giving, but also decision-making and nudging.
You can also see that some two thirds of my time was spent in a meeting of one kind or another. Before you are horrified by how much time I spend in meetings, answer a question:
Which of the activities – information gathering, information giving, decision-making, nudging, and being a role model – could I have performed outside a meeting? The answer is practically none.
Meeting provides an occasion for managerial activities. Getting together with others is not of course, an activity – it is a medium. You must choose the most effective medium you want to accomplish, that is one that gives you the greatest leverage.
Leverage of managerial activity
The output of a manager is the output of the various organizations under his control and his influence.
What can a manager do to increase his output? Let’s look at the concept of leverage.
Leverage is the measure of the output generated by any given managerial activity.
Managerial output = Output of organization = L1xA1 + L2xA2 + L3xA3 + . . ..
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 activities can be increased in three ways:
1. Speeding up his work (increasing the rate with which a manager performs 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.
High leverage activities:
· When many people are affected by one manager.
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. An example of leverage that I hope can be 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. Beside what I say specifically, my approach toward answering questions and my conduct in general communicate our way of doing things to these employees when they are most impressionable.
Cindy, as you recall, is a member of a technical coordinating body in which she tries to disseminate her understanding of a specific technology to all of the company manufacturing groups. In effect, she uses the coordinating body as an informal training vehicle to effect high leverage on her counterparts in neighboring Intel organizations.
· When a person’s activity or behavior over a long period of time is affected by a manager’s brief, well-focused set of words or actions.
A manager can also exert a high leverage by engaging in an activity that takes him only a short time, but those effects another person’s performance over a long time. A performance review represents a good example of this. With the few hours’ work that a manager spends preparing and delivering the review, he can affect the work of its recipient enormously. Here too a manager can exert either positive or negative leverage. A subordinate can be motivated and even redirected in his efforts, or the review can discourage and demoralize him for who knows how long.
Example of high negative leverage abound.
The manager becomes depressed. Though he didn’t realize it, he almost immediately began to effect people around him and soon depression spread throughout his organization.
Another example is waffling, when a manager puts off a decision that will affect the work of other people. In effect, the lack of decision is the same as a negative decision; no green light is a red light, and work can stop for a whole organization.
Both 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.
Managerial meddling is also an example of negative leverage. This occurs when a supervisor uses his superior knowledge and experience of a subordinate’s responsibilities to assume command of a situation rather than letting the subordinate work things through himself. Because the output of the organization will consequently be reduced in the long run, meddling is clearly an activity having negative managerial leverage.
· When a large group’s work is affected by an individual supplying a unique, key piece of knowledge or information.
This kind of leverage is exercised by a person with unique skills and knowledge. Designers, test engineers, etc. All are specialists whose work is important for the work of their organization at large. The person who comprehends the critical facts or has critical insights – the knowledge specialist or the know-how manager – has tremendous authority and influence on the work of others, and therefore very high leverage.
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 provides leverage well beyond the others and concentrates on them.
For me, paying close attention to customer complaints constitutes high-leverage activity. Aside from making the 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 follow up is where art comes into the work of a manager. The basis of that art is an intuition that behind this complaint and not the other, lurk many deeper problems.
Delegation as leverage
The delegator and delegegatee must share a common information base and a common set of operational ideas or notions on how to go about solving problems, a requirement that is frequently not met. Unless both parties share the relevant common base, the delegatee can become an effective proxy only with specific instruction. As in meddling, where specific activities are prescribed in detail, this produces low managerial leverage.
Picture this. I am your supervisor, and I walk over to you with pencil in hand and tell you to take it. You reach for the pencil, but I won’t let go. So I say, “What is wrong with you? Why can’t I delegate the pencil to you?”
We all have some things that we don’t really want to delegate simply because we like doing them and would rather not let go.
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 delegate those activities you know best.
Monitoring the results of delegation resembles the monitoring used in quality assurance. We should apply quality assurance principles and monitor at the lowest added-value stage of the process. For example, review rough drafts of reports that you have delegated; don’t wait until your subordinates have spent time polishing them into final form before you find out that you have a basic problem with the contents.
How often you monitor should not be based on what you believe your subordinate can do in general, but on his experience with a specific task and his prior performance with it – his task-relevant maturity. As the subordinate’s work improves over time, you should respond with a corresponding reduction in the intensity of the monitoring.
To use quality insurance 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 production test turned out.
Making a certain types of decisions is something managers frequently delegate to subordinates. This is the 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, we’ll approve that he wants. This technique allows us to find out how good the thinking is without having to go through it ourselves.
Increasing Managerial Activity Rate: Speeding Up the Line.
Managerial output / time = L x Activity performed / time
L is the leverage of the activity.
Identify limiting step
In manager’s life some things really have to happen on a schedule that is absolute. For me, an example is the class I teach. (This is the time critical event). I know when it is going to meet, and I know I must prepare for it 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 efficiently.
Batching similar tasks
For our work to proceed efficiently, we should use the same set-up effort to apply across a group of similar activities. Set-up time has many parallels in managerial work.
For example, once we have prepared a set of illustrations for a training class, we will obviously increase our productivity if we can use the same set over and over again with other classes or groups.
Similarly, if a manager has a number of reports to read or a number of performance reviews to approve, he should set aside a block of time and do a batch of them together, one after the other, to maximize the use of the mental set-up needed for the task.
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 reality of fragmentation experienced in managerial work.
A factory is usually run by forecast and not by individual order. Forecasting and planning your time around key events are literally like running an efficient factory.
To gain better control of his time, the manager should use his calendar as a “production“-planning tool, taking a firm initiative to schedule work that is not time-critical between those “limiting steps” in the day.
Another production principle can be applied here: The manufacturing people won’t allow material to begin its journey through the factory if they think it is already operating at capacity. If they did, material may go halfway through and back up behind a bottleneck Instead, factory managers say “no” at the outset and keep the start level from overloading the system.
How much time do you need to read your email, to write your reports, to meet with colleagues? You may not know precisely, but you surely have a feel for the time required.
Your calendar as production planning tool:
1. You move toward the active use of your time calendar, taking the initiative to fill the holes between the time-critical events (limiting step) with non-time-critical events.
2. You should say “No” at the outset to work beyond your capacity to handle.
It is important to say “No” earlier rather than later because we’ve learned that to wait until something reaches a higher value stage and then abort due to lack of capacity means losing more money and time.
Remember too that your time is your one finite resource, and when you say “Yes” to one thing you are inevitably saying “No” to another.
Allow slack – a bit of looseness in your scheduling. There is optimum degree of loading, with enough slack built in so that one unanticipated event will not ruin your schedule for the rest of the day.
A manager should carry inventory in terms of projects. This inventory should consists 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 subordinate’s work.
Most production practices follow well-established procedures and, rather than reinventing the wheel repeatedly, we use a specific method that has been shown to work before. But managers tend to be inconsistent and bring a welter of approaches to the same task. We should work to change that.
As we become more consistent, we should also remember that the value of an administrative procedure is contained not in formal statements but in the real thinking that led to its establishment. This means that even as we try to standardize what we do, we should continue to think critically about what we do and the approaches we use.
Built-In Leverage: How Many Subordinates Should You Have . . .
As a role 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 subordinates. The six to eight rule is for the classically hierarchical manager whose work is the supervision of others.
What about a know-how manager, the middle manager who mainly supplies expertise and information?
Even if he works without a single subordinate, servicing a number of varied “customers” as an internal consultant can in itself be a full-time job.
We should do everything we can to prevent little stops and starts in our day. The most common problem was uncontrolled interruptions, which in remarkably uniform fashion affected both supervisory and know-how managers.
Interruptions had a common source; most frequently coming from subordinates and from people outside the manager’s immediate organization but whose work the managers influenced.
If you can pin down what kind of interruptions you are getting, you can prepare those that pop up most often. Customer don’t come up with totally new questions and problems day in and day out, and because the same one 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.
If you handle a group of similar chores at one time (batching), many interruptions that come from your subordinates can be accumulated and handled at staff and at one-on-one meetings. 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, especially the bank of indicators kept over time. How fast you can answer a question depends on how fast you can put your finger on the information you need for a response. By maintaining an archive of information, a manager doesn’t have to do ad hoc research every time the request comes.
Understand that interrupters have legitimate problems that need to be handled. That’s why they are bringing them to you. But you can channel the time needed to deal with them into organized, scheduled form by providing an alternative to interruption – a scheduled meeting or an office hour. The point is to impose a pattern on the way a manager copes with problems. To make something regular that was once irregular is a fundamental production principle.
The Sports Analogy
By Andy Grove
A manager’s output is the output of the organization under his supervision or influence. This means that management is a team activity. But no matter how well a team is put together, no matter how well it is directed, the team will perform only as well as the individuals on it. The members of the team need continually try to offer the best they can do.
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. If the person’s life is depended on doing the work, could he do it? If the answer is yes, that person is not motivated; if the answer is no, he is not capable.
The single most important task of a manager is to elicit peak performance –“personal best”- from his subordinates. So if there are two things that limit high output, a manager has two ways to tackle the issue: through training and motivation.
How a manager motivates his subordinates? Motivation has to come from within somebody. Accordingly, all a manager can do is to create an environment in which motivated people can flourish. My own observation of working life confirm Abraham Maslow’s concept of motivation. A need once satisfied stops being a need and therefore stops being a source of motivation. Simply put, if we are to create and maintain high degree of motivation, we must keep some needs unsatisfied at all times.
Maslow defined a set of needs as below:
· Self actualization
· Esteem/Recognition
· Social/Affiliation
· Safety/Security
· Physiological
Physiological needs
Physiological needs consist of things money can buy, like food, clothing, and other basic necessities of life.
Safety/security needs
These come from a desire to protect oneself from slipping back to a state of being deprived of the basic necessities.
Social/affiliation needs
Social needs are quite powerful. One friend of mine said that going to work means being around of people she likes.
The physiological, safety/security, and social/affiliation needs all can motivate us to show up for work, but other needs - esteem/recognition and self actualization – make us perform once we are there.
Esteem/Recognition
A friend of mine was named a vice president of a corporation. Such a position is a life-long goal. When he had suddenly attained it, he found himself looking for some other way to motivate himself.
All the sources of motivation we’ve talked about so far are self-limiting. That is, when a need is gratified, it can no longer motivate a person. Once a predetermined goal or level of achievement is reached, the need to go further loses urgency.
Self-actualization needs
Self-actualization stems from a personal realization that “what I can be, I must be.” Once someone’s source of motivation is self-actualization, his drive to perform has no limit. Self-actualization continues to motivate people to ever-higher levels of performance. Thus, its most important characteristic is that unlike other source of motivation, which extinguishes themselves after the needs are fulfilled. A need to get better has no limit. Competence- and achievement-oriented people continuously try to test the outer limits of their abilities.
When the need to stretch is not spontaneous, management needs to create an environment to foster it. In an MBO system (management-by-objectives), objectives should be set at a point high enough so that even if the individual (or organization) pushes himself hard, he will still only have a fifty-fifty chance of making them. Output tend to be greater when everybody strives for a level of achievement beyond his immediate grasp, even though trying means failure half of the time. Such goal setting is extremely important if what you want is peak performance.
Moreover, if we want to cultivate achievement-driven motivation, we need to create an environment that values and emphasizes output. My first regular job in a research and integration technology, where a lot of people were very highly motivated but tended to be knowledge-centered. They were driven to know more, but not necessarily to know more in order to produce concrete results. Consequently, relatively little or almost nothing was actually achieved. The value system at Intel is completely reverse. The Ph.D. who knows an answer in the abstract, yet does not apply it to create some tangible output, gets little recognition, but a junior engineer who produces results is highly valued and esteemed. And that is how it should be.
When one is self-actualized, money in itself is no longer a source of motivation but rather a measure of achievement. Now consider a venture capitalist who after making ten million dollars is still very hard at work trying to make another ten. Money in the physiological- and security-driven modes only motivates until the need is satisfied, but money, as measure of achievement will motivate without limit. Thus the second ten millions can be just as important to the venture capitalist as the first, since it is not the utilitarian need for the money that drives him but the achievement that it implies, and the need for achievement is boundless.
If the absolute sum of a raise in salary an individual receives is important to him, he is working mostly within the physiological or safety modes. If, however, what matters to him is how his raise stacks up against what other people got, he is motivated by esteem/recognition or self-actualization, because in this case money is clearly a measure.
Once in self-actualization, a person needs measures to gauge his progress and achievement. The most important type of measure is the feedback on his performance. For the self-actualized person driven to improve his competence, the feedback mechanism lies within the individual himself. Our virtuoso violist knows how the music should sound, knows when it is not right, and will strive tirelessly to get it right.
What are some of the feedback mechanisms or measures in the workplace? The most appropriate measures tie an employee’s performance to the workings of the organization. If performance indicators and milestones in a management-by-objectives system are linked to the performance of the individual, they will gauge his degree of success and will enhance his progress. The most important form of such task relevant feedback is the performance review every subordinate should receive from his superior.
The performance of the organization as a whole depends on how skilled and motivated the people within it. Thus, the rule as managers is, first, to train the individuals and second, to bring them to the point where self-actualization motivates them, because once there, their motivation will be self-sustaining and limitless.
Let’s ask a question. Why does a person who is not terribly interested in work at the office stretch himself to the limit running a marathon? He is trying to beat other people or stopwatch. This is a simple model of self-actualization, wherein people exert themselves to previously undreamed heights, forcing themselves to run faster. What they did get was a racetrack, an arena of competition.
Comparing our work to sports may also teach us how to cope with failure. As noted, one of the big impediments to a fully committed, highly motivated state of mind is preoccupation of failure. Yet we know that in any competitive sport, at least 50 percent of all matches are lost.
The rule of manager here is also clear: it is that of the coach:
First, an ideal coach takes no personal credit for the success of his team, and because of that his players trust him.
Second, he is tough on his team. By being critical, he tries to get the best performance his team members can provide.
Third, a good coach was likely a good player himself at once. And having played the game well, he understands it well.
Turning the workplace into a playing field can turn subordinates into “athletes” dedicated to performing at the limit of their capabilities – the key to making our team consistent winners.
Decisions, Decisions
By Andy Grove
Making decisions – or more properly, participating in the process by which they are made – is an important and essential part of every manager’s work from one day to the next.
Decisions range from the profound to the trivial, from the complex to the very simple:
Should we buy a building or should we lease it?
Should we hire this person or that one?
Should we give someone a 7 percent or a 12 percent raise?
Can we deposit a phosphosilicate glass with 9 percent phosphorus content without jeopardizing its stability in a plastic package?
etc.
When someone graduates from college with a technical education, at that time and for the next several years, that young person will grow in knowledge and experience and up-to-date in the technology of time. Hence, he possesses a good deal of knowledge-based power in the organization that hired him. If he does well, he will be promoted to higher and higher positions, and as the years pass, his position power will grow but his intimate familiarity with current technology will fade.
Put another way, even if today’s veteran manager was once an outstanding engineer, he is not now the technical expert he was before he got promoted. At Intel, anyway, we managers get a little more obsolete every day.
If Intel used people holding old-fashioned position power to make all its decisions, decisions would be made by people unfamiliar with the technology of the day.
And in general, the faster the change in the know-how on which the business depends or the faster the change in customer preferences, the greater the divergence between knowledge and position power is likely to be.
If your business is depends on what it knows to survive and prosper, what decision-making mechanism should you use?
The key to success is again the middle manager, who not only is a link in the chain of command but also can see to it that the holders of the two types of power mesh smoothly.
An ideal model of decision making in know-how-business:
Free discussion => clear decision => full support
The first stage should be free discussion, in which all points of view and all aspect of an issue are openly welcomed and debated. The greater the disagreement and controversy, the more important becomes the word free. This sounds obvious, but it’s not often the practice.
I was told in a certain company, “In general, people who do well in this company wait until they hear their superiors express their view and then contribute something in support of that view.” This is a terrible way to manage. All it produces is bad decisions, because if knowledgeable people withhold opinions, whatever is decided will be based on information and insight less complete because people didn’t really speak their minds freely.
The next stage is reaching a clear decision. Again, the greater the disagreement about the issue, the more important becomes the word clear. In fact, particular pains should be taken to frame the terms of the decision with utter clarity.
Finally, everyone involved must give the decision reached by the group full support. This does not necessary mean agreement: so long as the participants commit to back the decision, that is a satisfactory outcome. Even when we all have the same facts and we all have interests of an organization in mind, we tend to have honest, strongly felt, real differences of opinion. But an organization does not live by its members agreeing with one another about everything. It lives instead by people committing to support the decisions and the moves of the business. All a manager can expect is that the commitment to support is honestly present, and this is something he can and must get from everyone.
Another desirable and important feature of the model is that any decision be worked out and reached at the lowest competent level. The reason is that this is where it will be made by people who are closest to the situation and know the most about it.
And by “know” I don’t just mean “understand technically.” That kind of expertise must be tempered with judgment, which is developed through experience and learning from the many errors one has made is one’s career.
Thus, ideally, decision-making should occur in the middle ground, between reliance on technical knowledge on the one hand, and on the bruises one has received from having tried to implement and apply such knowledge on the other. To make a decision, if you can’t find people with both qualities, you should aim to get the best possible mix of participants available.
For example, we at Intel are likely to ask a person in management senior to the other members of the group to come to the meeting. But it is very important that everybody there voice opinions and beliefs as equals throughout the free discussion stage, forgetting or ignoring the status differentials.
In our business we have to mix knowledge-power people with position power people daily, and together they make decisions that could affect us for years to come. If we don’t link our engineers with our managers in such a way as to get good-decisions, we can’t succeed in our industry.
Peers tend to look for the a more senior manager, even if he is not the most competent or knowledgeable person involved, to take over and shape a meeting. Why? Because most people are afraid to stick their necks out.
The peers –group syndrome:
One of the reasons why people are reluctant to come out with an opinion in the presence of their peers is the fear of going against the group by stating an opinion that is different from that of the group. Members of the group were waiting for a consensus to develop and didn’t speak their minds freely. That certainly makes it harder for a manager to make the right decisions.
You can overcome the peer-group syndrome if each of the members has self-confidence, which stems in part from being familiar with the issue under consideration and from experience. Nobody has ever died from making a wrong business decision, or taking inappropriate action, or being overruled. And everyone in your operation should be made to understand this.
If the peer-group syndrome manifest itself, and the meeting has no formal chairman, the person who has the most at stake should take charge. If that doesn’t work, one can always ask the senior person present to assume control and give the group the confidence needed to make a decision.
Sounding dumb
One thing that paralyzes both knowledge and position power possessors is the fear of simply sounding dumb. For senior person, this is likely to keep him from asking the questions he should ask.
The same fear will make other participants merely think their thoughts privately rather than articulate them for all to hear; at best they will whisper what they want to say to a neighbor.
As a manager you should remind yourself that each time an insight or fact is withheld and an appropriate question is suppressed, the decision-making process is less good than it might have been.
Lower-level people have also to overcome the fear of being overruled, which might mean embarrassment.
We need to overcome our fear of sounding dumb or of feeling being overruled, and lead us to initiate discussion and come out front with a stand.
Striving for the output
It is legitimate – in fact, sometimes unavoidable – for the senior person to wield position power authority if the clear stage is reached and no consensus has developed. We should not prolong the decision making if the clear stage is reached.
But it is not legitimate – in fact, it is destructive – for him to wield that authority any earlier.
If you enter the decision-making stage too early or wait too long, you won’t derive the full benefit of open discussion. The criterion to follow is this: Don’t push for a decision prematurely. Make sure you have heard and considered the real issues rather than the superficial comments that often dominate the early part of a meeting.
But if you feel that you have already heard everything, that all sides of the issue have been raised, it is time to push for a consensus – to step in and make a decision.
Sometimes, people can drift away from the near consensus when they are close being right, and then free discussion goes on in an unending search for consensus, diminishes the chances of reaching the correct decision. So moving on to make the decision at the right time is crucial.
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 ratify or veto the decision?
Who will need to be informed of the decision?
People invest a great deal of energy and emotion in coming up with a decision. Politics and manipulation or even their appearance should be avoided at all costs.
Group decisions do not always come easily. There is a strong temptation for the leading officers to make decisions themselves without the sometimes onerous process of discussion because the process is indeed onerous, people sometimes try to run away from it. If you could make decisions without consulting anybody, so could everybody else.
Meetings: The Medium of Managerial Work
By Andy Grove
The big part of a middle manager’s work is to supply information and know-how, and to impart a sense of the preferred method of handling things to the groups under his control and influence. A manager also makes and helps to make decisions. Both kinds of basic managerial tasks can only occur during face-to-face encounters, and therefore only during meetings.
A meeting is nothing less than the medium through which managerial work is performed. That means we should not be fighting their very existence, but rather using the time spent in them as efficiently as possible.
Two basic managerial roles produce two basic kinds of meetings. In the first kind of meeting, called process-oriented meeting, knowledge is shared and information is exchanged. Such thing takes place on a regular basis. The purpose of the second kind of meeting is to solve a specific problem, called mission-oriented meeting, frequently produce a decision. They are ad hoc affairs, not scheduled long in advance, because they usually can’t be.
Process-Oriented Meetings
Process-oriented meeting is a regularly scheduled affair and held to exchange knowledge and information. At Intel we use three kinds of process-oriented meetings: the one-on-one, the staff meeting, and the operational review.
One-on-Ones
One-on-one meeting between a supervisor and a subordinate is the principle 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.
Even though I was expected to supervise both engineering and manufacturing, I knew very little about the company’s first product line, memory devices. I also didn’t know much about manufacturing techniques, my background having been entirely in semiconductor device research. So two of my associates, both of whom reported to me, agreed to give me a private lessons on memory design and manufacturing. During the session the pupil/supervisor busily took notes trying to learn. As Intel grew; the initial tone and spirit of such one-on-ones endured and grew.
How do you decide how often somebody needs such a meeting? The answer is the task relevant maturity of each of your subordinates. Accordingly you should have one-on-ones frequently (e.g., once a week) with a subordinate who is inexperienced in a specific situation and less frequently (perhaps once every few weeks) with an experienced veteran.
How long should one-on-one meeting last? There is no answer to this, but the subordinate must feel that there is enough time to broach and get into thorny issues. I feel that a one-on-one meeting should last an hour at a minimum. Anything less, in my experience, tends to make the subordinate confine himself to simple things that can be handled quickly.
Where should one-on-one take place? 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 get interrupted all the time?
And in general, how does the subordinate approach his work?
A key point about a one-on-one meeting: It should be regarded as the subordinate’s meeting, with its agenda and tone set by him. The subordinate should be asked to prepare an outline, which is very important because it forces him to think through in advance all of the issues and points he plans to raise. An outline also provides a framework for supporting information. The subordinate should then walk the supervisor through all the material. The supervisor must have the outline before the meeting begins, both parties should take notes, and so on.
What should be covered in a one-on-one? We can start with performance figures, indicators used by the subordinate. 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, or 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 criterion governing matters to be talked about is that they be issues that preoccupy and nag the subordinate. They are often obscure and take time to surface, consider, and resolve.
What is the role of 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 job 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.”
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.
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 note 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 help me to absorb it. Equally important is what is writing 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.
The supervisor should also encourage the discussion of heart-to-heart issues during one-on-ones, because this is the perfect forum for getting a subtle and deep work-related problems affecting his subordinate.
Is he satisfied with his own performance?
Does some frustration or obstacle gnaw at him?
Does he have doubts about where he is going?
The supervisor should be wary of the “zinger,” which is a heart-to-heart issue brought up at an awkward time. More often than not, these come near the end of a meeting. If you let that happen, the subordinate might tell you something like he’s unhappy and has been looking outside for a job and give you only five minutes to deal with it.
For long distance one-on-one, exchanging notes after the meeting is a way to make sure each knows that the other committed himself to be.
One-on-one should be scheduled on a rolling basis –setting up the next one as the meeting taking place ends.
What is leverage of the one-on-one? Let’s say a one-on-one meeting lasts one to one and a half hours and happens every two weeks. Ninety minutes of supervisor’s time can enhance the quality of his subordinate’s work for two weeks, or for some eighty-plus hours and also upgrade supervisor’s understanding of what his subordinate’s doing, checking closely enough to make sure an activity is proceeding in line with expectations. Clearly, one-on-one can exert enormous leverage. At the same time, the subordinate teaches the supervisor, and what is learned is absolutely essential if the supervisor is to make a good decision. And, this, as noted, is the only way in which efficient and effective delegation can take place.
During a recent one-on-one meeting, my subordinate, who is responsible for Intel’s sales organization, reviewed trend indicators of incoming orders. While I was vaguely familiar with them, he laid out a lot of specific information and convinced me that our business had stopped growing. He proved to me that what was going was not just seasonal. We came to the reluctant conclusion that business was in fact slowing down. This meant we should take a conservative approach to near-term investment. By sharing his base of information with me, the two of us developed a congruent attitude, approach, and conclusion: conservatism in our expansion plans. He left the meeting having decided to scale back growth in his own area of responsibility. I left having decided to share what we had concluded with the business groups I supervised. Thus, this one-on-ones produced substantial leverage: the Intel sales manager affected all the other managers who reported to me.
Staff Meeting
Staff meeting presents an opportunity for interaction among peers and also creates an opportunity 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.
What should be discussed at the stuff meeting?
Anything that affects more than two of the people present. If the meeting generates into a conversation between two people working on a problem affecting only them, the supervisor should break it off and move on to something else that will include more of the staff, while suggesting that the two continue their exchange later.
How structured should the meeting be? A free-for-all brainstorming session or controlled with a detailed agenda?
It should be mostly controlled, with an agenda issued far enough in advance that the subordinates will have had the chance to prepare their thoughts for the meeting. But it should also include an “open session” – a designated period of time for the staff to bring up anything they want.
What is the rule of the supervisor in the stuff meeting – a leader, observer, expediter, questioner, and decision maker? The answer, of course, is all of them.
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. Supervisor’s most important roles are being a meeting’s moderator and facilitator, and controller of its pace and thrust.
Stuff meetings are an ideal medium for decision-making, because the group of managers present has typically worked together for a long time. A stuff meeting is like the dinner-table conversation of a family.
Operation Reviews
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
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 presenter manager 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.
The reviewing manager
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 manager should be a role model for the junior managers present, he should take his role at the review extremely seriously.
The presenters
The people presenting the review – a group of marketing supervisors – for example should use visual aids such as overhead transparencies to the extend 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 obsessed with getting through all of his visual material that his massage gets lost even while all his carts get flipped.
As a role of thumb, I would recommended four minutes of presentation and discussion time upper visual aid, which can include tables, numbers, or graphics. The presenter must highlight whatever he wants to emphasize with a color pen or pointer.
Throughout the presentation, the presenter has to watch his audience like a hawk. Facial expressions and body language, among other things, will tell him if people are getting the message, if he needs to stop and go over something again, or if he is boring them and should speed up.
The audience.
The audience at an operation review also as a crucial part to play. One of the distinguishing marks of a good meeting is that the audience participates by asking questions and making comments. If you avoid the presenter’s eyes, yawn, or read the newspaper it’s worst than not being there at all. Lack of interest undermines the confidence of the presenter.
Make that time as valuable as possible for yourself and your organization. Ask question if something is not clear to you and speak up if you can’t go along with an approach being recommended. And if the presenter makes a factual error, it is your responsibility to go on record.
Mission-Oriented Meeting
Mission-oriented meeting is usually held ad hoc and is designed to produce a specific output, frequently a decision.
The key of success here is what the chairman does. It is usually the chairman or de facto chairman who calls the meeting who has more at stake in the outcome of the meeting than the others. Most of what he contributes should occur before it begins.
The chairman must have a clear understanding of the meeting’s objective – what needs to happen and what decision has to be made.
The absolute truth is that if you don’t know what you want, you won’t get it.
So before calling a meeting, ask yourself: What am I trying to accomplish?
Then ask, is a meeting necessary? Or desirable? Or justifiable?
Don’t call a meeting if all the answer aren’t yes.
Even if you are just an invited participant, you should ask yourself if the meeting – and your attendance – is desirable and justified. Determine the purpose of the meeting before committing your time and your company’s resources.
Get it called off early, at a low-value-added stage, if a meeting makes no sense. And find a less costly way (a one-on-one meeting, a telephone call, a note) to pursue the matter.
As chairman, you must identify who should attend and then try to get those people to come. It is not enough to ask people and hope for the best; you need to follow up and get commitments. If someone invited can’t make it himself, see to it that he sends a person with the power to speak for him.
Keep in mind that a meeting called to make a specific decision is hard to keep moving if more than six or seven people attend. Eight people should be the absolute cutoff. Decision making is not a spectacular sport.
The chairman is also responsible for maintaining discipline. It is criminal for him to allow people to be late and waste everyone’s time. Don’t worry about confronting the late arriver. He should also send out the agenda that clearly states the purpose of the meeting, as well as what role everybody there is expected to play to get the desired output.
Once the meeting is over, the chairman must nail down exactly what happened by sending out minutes that summarize the discussion that occurred, the decision made, and the actions be taken. And it’s very important that attendees get the minutes quickly, before they forget what happened . The minutes should also be as clear and as specific as possible, telling the reader what is to be done, who is to do it, and when.
All this may seem like too much trouble, but if the meeting was worth calling in the first place, the work needed to produce the minutes is a small additional investment (an activity with high leverage) to ensure that the full benefit is obtained from what was done.
Ideally, a manager should never have to call an ad hoc, mission-oriented meeting, because if all runs smoothly, everything is taken care of in regularly scheduled, process-oriented meetings.
In practice, however, if all goes well, routine meetings will take care of maybe 80 percent of the problems and issues; the remaining 20 percent will still have to be dealt with in mission-oriented meetings. The sign of malorganization is when people spend more than 25 percent of their time in ad hoc mission-oriented meetings.
Why Training Is the Boss's Job
By Andy Grove
Recently my wife and I decided to go out for dinner. When we showed up for dinner, we quickly learned that the restaurant had lost its liquor’s license and that its patrons were expected to bring their own wine if they wanted any. As the maitre d’ rubbed his hands, he asked, “Weren’t you told this on the phone when you made your reservation?” As we went through our dinner without wine, I listened to him go through the same routine with every party he seated. I don’t know for sure, but it’s probably fair to assume that nobody instructed the woman taking calls to tell potential guests what the situation was. Instead the maitre d’ had to go through an inept apology time and time again, and nobody had wine – all because one employee was not properly trained.
The consequences of an employee being insufficiently trained can be much more serious. In an instance at Intel for example, one of our sophisticated pieces of production machinery in a silicon fabrication plant – a machine called an ion implanter – drifted slightly out of tune. The machine operator, like the woman at the restaurant, was relatively new. While she was trained in the basic skills needed to operate the machine, she hadn’t been taught to recognize the signs of an out-of-tune condition. So she continued to operate the machine. By the time the situation was discovered, material worth more than one million dollars had passed through the machine and had to be scrapped. Because it takes over two weeks to make up such a loss with fresh material, deliveries to our customers slipped, compounding the problem.
Situation like these occur all too frequently in business life. Insufficient trained employees, in spite of their best intentions, produce inefficiencies, excess costs, unhappy customers, and sometimes dangerous situations.
In my view a manager’s output is the output of his organization – no more, no less. A manager’s own productivity thus depends on eliciting more output from his team. Therefore I strongly believe that the manager should do the training himself.
A manager generally has two ways to raise the level of individual performance of his subordinates; by increasing motivation, the desire of each person to do his job well, and by increasing individual capability, which is where training comes in.
It is generally accepted that motivating employees is a key task of all managers, one that can’t be delegated to someone else. Why shouldn’t the same be true accepted for the other principle means at a manager’s disposal for increasing output?
Training is, quite simply, one of the highest-leverage activities a manager can perform.
Consider for a moment the responsibility of your putting on series of four lectures for members of your department. Let’s count on three hours of preparation for each hour of course time – twelve hours of work in total.
Say that you have ten students in your class. Next year they will work a total of about twenty thousand hours for your organization.
If your training efforts result in a 1 percent improvement in your subordinates’ performance, your company will gain the equivalent of two hundreds hour of work as a result of the expenditure of your twelve hours.
This assumes, of course, that the training will accurately address what students need to know to do their jobs better. For the training to be effective, it has to be closely to how things are actually done in your organization.
For training to be affective, it also has to maintain a reliable, consistent presence. Employees should be able to count on something systematic and scheduled, not a rescue effort summoned to solve the problem of the moment. In other words, training should be a process, not an event. And that what you teach must be closely tied to what you practice, and that training needs to be a continuing process rather than a one-time event, it is clear that the who of the training is you, the manager. You yourself should instruct your direct subordinates and perhaps the next few ranks below them. Your subordinates should do the same thing, and the supervisors at every level below them as well. Conducting training is a worthwhile activity for everyone from the first-line supervisor to the chief executive officer.
There is another reason that you and only you can fill the role of the teacher to your subordinates. Training must be done by a person who represents a suitable role model. The person standing in front of the class should be seen as a believable, practicing authority on the subject taught.
Some 2 to 4 percent of our employees’ time is spent in classroom learning, and much of the instruction is given by our own managerial staff. We have a university catalogue that lists over fifty different classes. The courses range from proper telephone manners to quite complicated production courses like one on how to operate the ion implanter, which requires nearly two hundred hours of on-the-job training to learn to use it correctly. We train our managers in disciplines such as strategic planning as well as in the art of constructive confrontation, a problem solving approach we favor at Intel.
My own training repertoire includes a course on preparing and delivering performance reviews, on conducting productive meeting, and a three-hour-long introduction to Intel, in which I describe our history, objectives, organization, and management practices. I have also been recruited to pinch-hit in other management courses. (To my regret, I have become far too obsolete to teach technical material).
There are two different training tasks:
1) The first task is teaching our new members of our organization the skills needed to perform their job.
2) The second task is teaching new ideas, principles, or skills to the present members of our organization.
What should you do if you embrace the gospel of training?
Make a list of things you feel your subordinates or the members of your department should be trained in. Items should range from what seems simple (training the person who takes calls at the restaurant) to loftier and more general things like the objectives and value systems of your department, your plant, and your company.
Ask the people working for you what they feel they need. They are likely to surprise you by telling you of needs you never knew existed.
Having done this, take an inventory of the manager-teachers and instructional materials available to help deliver training on items on your list. Then assign priorities among these items.
If you haven’t done this sort of thing before, start very unambitiously – like developing one sort course (three to four lectures) on the most urgent subject.
You will find that skills you have had for years – things that you could do in sleep, as it were- are much harder to explain than to practice. You may find that in your attempt to explain things, you will be tempted to go into more and more background until this begins to obscure the original objective of your course.
To avoid letting yourself bog down in the difficult task of course preparation, set a schedule for your course, with deadlines, and commit yourself to it. Create an outline for the whole course, develop just the first lecture, and go.
To make sure that your first attempt causes no damage, teach this course to the more knowledgeable of your subordinates, who won’t be confused by it but who will help you perfect the course through interaction and critique.
Develop the second lecture after you have given the first. Accept the inevitability of the first time being unsatisfactory second round. With your second attempt in the offing, ask yourself one final question:
“Will I be able to teach all members of my organization myself?”
“Will I be able to cover everybody in one or two courses, or will it require ten or twenty?”
If your organization is large enough to require many repetitions of your course before different audiences, then set yourself up to train a few instructors with your first set of lectures.
After you’ve given the course, ask for anonymous critiques from the employees in your class. Typical feedback will be that the course was too detailed, too superficial, and just right, in about equal balance. Your ultimate aim should be to satisfy yourself that you are accomplishing what you set out to do.
You will discover a few interesting things:
Training is hard work. Preparing lectures and getting yourself ready to handle all the questions thrown at you is difficult.
Even if you have been doing your job for along time and even you have been done your subordinate’s jobs in great detail before, you’ll be amazed at how much you don’t know. Don’t be discouraged – this is typical. Much deeper knowledge of task is required to teach that task than simply to do it.
Guess who will have learned most from the course? You!
The crispness that developing it gave to your understanding of your own work is likely in itself to have made the effort extremely worthwhile.
You will find when the training process goes well, it is nothing short of exhilarating. And even this exhilarating is dwarfed by the warm feeling you’ll get when you see a subordinate practice something you have taught him. Relish the exhilaration and warmth – it’ll help you to arm yourself for tackling the second course.
Management Style
By Andy Grove
A high output is associated with particular combinations of certain managers and certain groups of workers.
Parents and children
The theory here parallels the development of the relationship between a parent and child. As the child matures, the most effective parental style changes, varying with the “life-relevant maturity” – or age – of the child. A parent needs to tell a toddler not to touch things that he might break or that might hurt him. As he grows older, he begins to do things on his own initiative; something the parent wants to encourage while still trying to keep him from injuring himself. A parent might suggest, for example, that his child give up his tricycle for his first two-wheeler. The parent will not simply send him out on his own, but will accompany him to keep the bicycle from tipping over while talking to him about safety on the streets.
Parental supervision moves from structured to communicating.
As the child’s maturity continues to grow, the parent can cut back on specific instruction. When the child goes out to ride his bicycle, the parent no longer has to recite the litany of safety rule. A teenager knows it is not safe to cross a busy interstate highway on his bicycle, and the parent no longer has to tell him not to do it. Structures moves from externally imposed to being internally given.
Finally when the life-relevant maturity of the child is high enough, he leaves home perhaps goes away to colleague. At this point the relationship between parent and child will change again as the parent merely monitors the child’s progress.
Parental supervision moves from communicating to monitoring.
Should the child’s environment suddenly change to one where his life-relevant maturity is inadequate (for example, if he runs into severe academic trouble), the parent may have to revert to a style used earlier.
If the parent (or supervisor) imparted early on to the child (or subordinate) the right way to do things (the correct operational values), later the child would be likely to make decisions the way the parent would.
In fact, commonality of operational values, priorities, and preferences – how an organization works together – is a must if the progression in managerial style is to occur. Without that communality, an organization can become easily confused and lose its sense of purpose. Then; too, without a shared set of values a supervisor cannot delegate effectively. Accordingly, the responsibility for the transmitting common values rests squarely with the supervisor. He is, after all, accountable for the output of the people who report to him. The responsibility for teaching the subordinate must be assumed by his supervisor.
Task relevant maturity
The fundamental variable that determines the effective management style is the task-relevant maturity of the subordinate. Task relevant maturity of the subordinate is a combination of the degree of their achievement orientation and readiness to take responsibility, as well as their education, training and experience.
Varying the management styles are needed as task relevant maturity varies:
When the TRM is low, the most effective approach is one that offers very precise and detailed instructions, wherein the supervisor tells the subordinate what needs to be done, when and how: in order words, a highly structured approach.
TRM: low => structured; task oriented; tell “what,” “when,” “how.”
As the TRM of the subordinate grows, the most effective style moves from the structured to one more given to communication, emotional support, and encouragement, in which the manager pays more attention to the subordinate as an individual than to the task at hand.
TRM: medium => Individual oriented; emphasis on two-way communication, support,
mutual reasoning.
As the TRM becomes even greater, the effective management style changes again. Here manager’s involvement should be kept to a minimum, and should primarily consist of making sure that the objectives toward which the subordinate is working are mutually agreed upon.
TRM: high => Involvement by manager minimal: establishing objectives and monitoring.
The manager should always monitor a subordinate’s work closely enough to avoid surprises.
Do not make a value judgment and consider a structured management styles less worthy than a communication-oriented one. What is “nice” or “not nice” should have no place in how you think or what you do. Remember, we are after what is most effective.
The appropriate management style for an employee with high TRM takes less time than detailed, structured, supervision requires. Finally, at the highest levels of TRM, the subordinate’s training is presumably complete, and motivation is likely to come from within, from self-actualization, which is the most powerful source of energy and effort a manager can harness.
Once operational values are learned and TRM is high enough, the supervisor can delegate tasks to the subordinate, thus increasing his managerial leverage.
Deciding the TRM of your subordinates is not easy. Moreover, even if a manager knows what the TRM is, his personal preferences tend to overwrite the logical and proper choice of management style. For instance, even if a manager sees that his subordinate’s TRM is “medium”, in the real world the manager will likely opt for either the “structured” or “minimal” style. In other words, we want either to be fully immersed in the work of our subordinates, making their decisions, or to leave them completely alone, not wanting to be bothered.
Another problem is a manager’s perception of himself. We tend to see ourselves more as communicators and delegators than we really are, certainly much more than do our subordinates. It is partly because managers think of themselves as perfect delegators. But also, sometimes a manager throws out suggestions to a subordinate who receives them as marching orders – furthering the difference in perceptions.
A person’s TRM can be very high but if the pace of the job accelerates or if the job itself abruptly changes, the TRM of the individual will drop. It’s a bit like a person with many years’ experience driving on country roads being suddenly asked to drive on a crowded metropolitan freeway. His TRM of driving will drop precipitously.
For an example, an excellent manager taking new job. The personal maturity of the manager obviously did not change, his task relevant maturity in the new job was extremely low, since its environment, content, and tasks were all new to him. In time he learned to cope, his TRM gradually increased. With that his performance began to approach the outstanding levels he had exhibited earlier, which is why he was promoted in the first place. Here there are two things involved:
· The manager’s general competence and maturity
· The manager’s task relevant maturity
Working environment changes
Let’s consider an army encampment where nothing ever happens. The sergeant in command has come to know each of his soldiers very well, and by and large maintains an informal relationship with them. The routines are so well established that he rarely has to tell anyone what to do; appropriate to the high TRM of the group, the sergeant content himself with merely monitoring their activity.
One day a jeepload of the enemy suddenly appears, coming over the hill and shooting at the camp. Instantly the sergeant revert to a structured, task-oriented, leadership style, barking orders at everyone, telling each of his solders what to do, when and how . . . . A directing style is appropriate when a decision has to be made quickly and the stakes are high.
After a while, if these skirmishes continue and the group keeps on fighting from the same place for a couple of months, this too will eventually become routine. With that, the TRM of the group for the new task – fighting – will increase. The sergeant can then gradually ease off telling everybody what to do.
A manager’s ability to operate in a style based on communication and mutual understanding depends on there being enough time for it.
Though monitoring is a manager’s most productive approach, we have to work our way up to it in the real world. Even, if we achieve it, if things suddenly change we have to revert quickly to the structured (what-when-how) mode.
We managers must learn to fight such prejudices and regard any management mode not as either good or bad but rather as effective or not effective, given the TRM of our subordinates within a specific working environment. The management mode changes day-by-day and sometimes hour-by-hour.
Working relationship
There is a huge distinction between a social relationship and a communicating management style, which is a caring involvement in the work of subordinate.
If the subordinate is a personal friend, the supervisor can move into a communicating management style quiet easily, but the what-when-how mode becomes harder to revert to when necessary. It’s unpleasant to give order to a friend.
I have seen several instances where a supervisor had to make a subordinate-friend to a disciplinary line, the supervisor’s action worked out because the subordinate felt that supervisor was looking out for his professional interests.
Is friendship between supervisor and subordinate a good thing? A test might be to imagine yourself delivering a tough performance review to your friend. Do you cringe at that thought? If so, don’t make friends at work. If your stomach remains unaffected, you are likely to be someone whose personal relationships will strengthen work relationships.
