Given how often management theories change and evolve, there are very few “classic” management books. High Output Management by Andrew S. Grove qualifies as one. For those who are unfamiliar with Andrew (Andy) Grove, he was one of the founders of Intel Corporation, became its CEO in 1987, and served as Chairman of the Board from 1997-2005. He was an instrumental figure in many of Intel’s business strategies, particularly the decision to change Intel’s focus from memory chips to microprocessors. In other words, Andy Grove is synonymous with Intel. Even today, a lot of the business practices, strategies, and culture of Intel are a reflection of his philosophies of building and running a successful company.
While many management books are written by academics or people with an education in business or finance, High Output Management is unique in that it is written by an engineer for engineers. An engineer by education myself, I loved how Grove, in true engineering fashion, transformed the art of management into a science that can and should be broken down and measured. He begins by comparing the managing of a company to making breakfast. It’s an analogy that would seem to make little or no sense when applied to management. Grove, however, uses it to illustrate how the management of any company should not be more complicated that running a restaurant that makes a great breakfast.
His breakfast analogy is only one way that he breaks down his management philosophies and techniques into easy to understand concepts. My other favorite is when he applies the concept of a black box to management. As Grove puts it:
The black box sorts out what the inputs, the output, and the labor are in the production process.
From there, he advocates creating leading indicators as a way to create “windows” into the black box that show you in advance what the future will look like. These leading indicators give you time to take corrective action and, as Grove so eloquently puts it, they make it possible for you to avoid problems. He concludes with a great observation about the leading indicators:
But unless you are prepared to act on what your leading indicators are telling you, all you will get from monitoring them is anxiety.
I also loved how Grove sums up his book at the beginning by telling you the three basic ideas that are covered in the book. They are, in his words, as follows:
The first is an output-oriented approach to management. That is to say, we apply some of the principles and the discipline of the most output-oriented of endeavors – manufacturing – to other forms of business enterprise, including most emphatically the work of managers.
The second idea is that the work of a business, of a government bureaucracy, of most forms of human activity, is something pursued not by individuals but by teams. This idea is summed up in what I regard as the single most important sentence of this book: The output of a manager is the output of the organizational units under his or her supervision or influence.
A team will perform well only if peak performance is elicited from the individuals in it. This is the third idea of the book.
Bottom line, High Output Management is a must read for anyone in management, especially in a technology company. The book is not full of management theory. It is full of practical and applicable ideas that can be used in a company of any size. The only caution is if you are not involved in business. Then you may not find the book quite as interesting.
I’d like to throw a hat tip out to Ben Horowitz. He wrote the foreword for the latest edition of High Output Management. He posted the foreword on his blog, which I follow. After reading the post, I decided to add High Output Management to my reading list and prioritize it. I’m glad I did, and I expect that I will be referring to the book regularly. Hopefully, I have the same experience and will get as much out of the book as Ben did.