[Notes] Managerial Leverage - High Output Management

These are copy/paste notes on “Managerial Leverage” from Andy Grove's High Output Management.

What is a manager?

Managers are micro CEOs in charge of supervising others directly, and/or individual contributors who gather and disseminate know-how and information.

If the manager is a knowledge specialist, a know-how manager, her potential for influencing “neighboring” organizations is enormous.

What is a manager's output?

A manager's output = The output of her organization + the output of the neighboring organizations under her influence. 

While the manager’s own work is clearly very important, that in itself does not create output. Her organization does.

What are managerial activities?

It is important to understand that a manager will find himself engaging in an array of activities in order to affect output

• Information Gathering
• Information Sharing
• Decision Making
• Providing direction (Nudges)
• Role Modeling
• Allocating resources (Time)

Information Gathering

All other managerial activities are governed by the base of information that you, the manager, have about the tasks, the issues, the needs, and the problems facing your organization.

In short, information-gathering is the basis of all other managerial work.

Information gathering 

• Is a constant, daily activity
• Should come from multiple sources
• Should come from redundant sources (this gives you a way to verify what you’ve learned)

Information Sharing

A manager not only gathers information but is also a source of it.

He must convey his knowledge to members of his organization and to other groups he influences.

Beyond relaying facts, a manager must also communicate his objectives, priorities, and preference as they bear on the way certain tasks are approached.

Decision Making

Once and awhile, we managers in fact make a decision. But for every time that happens, we participate in the making of many, many others, and we do that in a variety of ways

• We provide factual inputs or just offer opinions
• We debate the pros and cons of alternatives and thereby force a better decision to emerge
• We review decisions made or about to be made by others, encourage or discourage them, ratify or veto them

It is 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.

Providing direction (Nudges)

You often do things designed to influence events slightly.

In such instances you may be advocating a preferred course of action, but you are not issuing an instruction or a command. Yet you’re doing something stronger than merely conveying information. 

Let’s call it “nudging” because through it you nudge an individual or a meeting in the direction you’d like.

In reality, for every unambiguous decision we make we probably nudge things a dozen times.

Role Modeling

While we move about, doing what we regard as our jobs, we are role models for people in our organization. 

Nothing leads as well as by example...Values and behavioral norms are simply not transmitted easily by talk or memo, but are conveyed very effectively by doing and doing visibly.

Allocating resources

A great deal of a manager’s resources has to do with allocating resources: manpower, money, and capital. 

But the single most important resource we allocate from one day to the next is our own time.

How you handle your own time is, in my view, the single most important aspect of being a role model and leader.

Leverage of Managerial Activity 

The art of management lies in the capacity to select from the many activities of seemingly comparable significance the one or two or three that provide leverage well beyond the others and concentrate on those.

A manager must always keep many balls in the air at the same time and shift her energy and attention to activities that will most increase the output of her organization.

• In order words, she should move to the point where her leverage will be greatest

What can a manager do to increase his output? Find leverage. 

• Leverage is the measure of the output generated by any given managerial activity.

Managerial productivity 

The output of a manager per unit of time worked - can be increased in 3 ways

• Increasing the rate with which a manager performs her activities, speeding up her work
• Increasing the leverage associated with the various managerial activities
• Shifting the mix of a manager’s activities from those with lower to those with higher leverage

High Leverage activities

• Affect many people at once - When many people are affected by one manager
• Affect over long period of time - 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
• Providing unique knowledge - When a large group’s work is affected by an individual supplying a unique, key piece of knowledge or information [the person who comprehends the critical facts or has the critical insights -- the “knowledge specialist” or the “know-how manager” - has tremendous authority and influence on the work of others, and therefore very high leverage]

Leverage can depend on what an action is performed (earlier == higher-leverage)

Delegation as leverage

The “delegator” and the “delagatee” must share a common information base and a common set of operational ideas or notions on how to go about solving the problems

• Unless both parties share the relevant common base, the delegatee can become an effective proxy only with specific instructions

Delegation without follow-up is abdication

• 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

Do more, faster

The most obvious way to increase managerial output is to increase the rate, or speed, of performing work.

The most common approach to increasings a managers productivity -- her output over time - has been time management techniques

• Identify the limiting step
• Batching similar tasks
• Calendar as a production-planning tool
• Active use of your calendar, taking the initiative to fill the holes between time-critical events with non-time critical though necessary activities
• You should say “no” at the outset to work beyond your capacity to handle