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Female role models dissertation do my dnp capstone projects college health kdp crystal thesis builder [Music] by output management it means taking charge of the decision-making process self-confidence mostly comes from a gut level realization that 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 high output management it means learning how to use your resources wisely a great deal of managers work has to do with allocating resources manpower money and capital but the single most important resource that we allocate from one day to the next is our only time by output management it means accurately assessing the value of your subordinates the biggest problem with most reviews is that we don't usually define what it is we want from our subordinates and if we don't know what we want we are surely not going to get it [Music] [Applause] [Music] manager they're often the Forgotten breed in companies and organizations yet they represent the very backbone of business and industry think about it as a manager you are in effect a chief executive of an organization yourself so don't wait for the principles and practices you find appealing to be imposed from the top as a micro CEO you can improve your own and your group's performance and productivity whether or not the rest of the company follow suit all it takes is putting into practice the ideas and concepts in this powerful audio program welcome to career tracks high output management by dr. Andrew s growth in this thought-provoking program you'll learn three basic yet powerful management ideas that you can put to work immediately you'll learn how to apply the principles and discipline of an output oriented endeavor like manufacturing to your own work as a manager you'll learn how the team concepts can effectively increase the output of the group you lead and finally you'll learn how the same concepts used in the development of a sports athlete can be similarly used in the development of management skills the ideas for this unique program were developed by a living legend in management dr. Andrew s Grove author of high output management and president and CEO of Intel Corporation drawing from his many years at the helm of a multi-billion dollar giant dr. Grove presents a system tailored specifically for managers like you in organizations of all types you won't hear any lofty high-level management theories here but you will hear answers to practical issues you face every day before we begin here are a few tips and suggestions to get the most from this career track program first as you listen have a pencil and pad handy when you hear a point that is a particular interest or importance stop the tape and jot it down by the time you complete this program you will have created your own action plan to begin implementing the ideas in high output management second listen to these tapes several times at home at the office in your car the more you listen the more clear these ideas and concepts will become and finally at the end of this program Andrew Grove includes 25 specific exercises to help you apply these ideas principles and techniques to your job what is meant by an output oriented approach to management on this side Andrew Grove will apply some of the principles and the discipline of manufacturing to the work of managers the fact is all of your employees produce in some way and when you approach work with this basic understanding in mind the concepts of production will give you a systematic way of managing your work so let's begin with the basics of production in what Andrew Grove calls the breakfast factory the narrator for this program is Bob ASCII here is side one [Music] high output management published by arrangement with dr. Andrew s Grove copyright 1990 by dr. Andrew s Grove all rights reserved let me begin by telling you what this audio cassette album is not about there's not a sentence in it about bits and bytes Rams and roms or anything else remotely technical or arcane even though Intel where I work is a high tech Silicon Valley company as a practitioner of the art of Management I've tried instead to lay out what I think constitutes a good solid management approach for my experience at Intel this consists of energetic and committed people sitting down together looking at problems and figuring out ways to solve them so my job here is to provide you with basic ideas clear principles and specific techniques you can use in your own managerial circumstances and at the end of this program I've included a list of 25 specific ways you can apply these basic ideas principles and techniques to your job so you can start increasing your output immediately we can start our discussion of high output management by looking at the way a good business handles the basics of production to do this I've invented an example which I call the breakfast Factory the goal of the breakfast Factory is to deliver breakfasts to its customers but the way it does this can be applied to delivering any product or service because as I'm going to show you the basics of production are the same whether you are required to deliver breakfasts or sales presentations or college graduates to understand the principles of production imagine that you're a waiter which I was while I went to college and that your task is to serve a breakfast consisting of a three-minute soft-boiled egg buttered toast and coffee your job is to prepare and deliver the three items simultaneously each of them fresh and hot the task here encompasses the basic requirements of production these are to build and deliver products in response to the demands of the customer at a scheduled delivery time at an acceptable quality level and at the lowest possible cost Productions Charter cannot be to deliver whatever the customer wants whenever he wants it for this would require an infinite production capacity or the equivalent very large ready to deliver inventories in our example the customer may want to have a perfect three-minute egg with hot buttered toast and steaming coffee waiting for him the moment he sits down to fulfill such an expectation you would either have to have your kitchen idle and poised to serve the customer whenever he drops in or have a ready to consume inventory of perfectly boiled eggs hot buttered toast and coffee neither is practical instead a manufacturer should accept the responsibility of delivering a product at the time committed to in this case by implication about five to ten minutes after the customer arrives at our breakfast establishment and we must make our breakfast at a cost that enables us to sell it at a competitive price and still make an acceptable profit how are we going to do this in the most intelligent way we start by looking at our production flow the first thing we must do is to pin down the step in the flow that will determine the overall shape of our operation we'll call it the limiting step the issue here is simple which of the breakfast components takes the longest to prepare because the coffee is already steaming in the kitchen and the toast takes only about a minute the answer is obviously the egg so we should plan the entire job around the time needed to boil it not only does that component take the longest to prepare the egg is also for most customers the most important feature of the breakfast now you'll need to calculate the time required to prepare the three components to ensure that they are all ready simultaneously first you must allow time to assemble the items on a tray next you must get the toast from the toaster and the coffee from the pot as well as the egg out of the running water adding the required time to do this to the time needed to get and cook the egg defines the length of the entire process called in production jargon the total throughput time next using the egg time as your base you must allow yourself time to get and toast the slices of bread finally using the toast time as your base you can determine when you need to pour the coffee the key idea is that we construct our production flow by starting with the longest or most difficult or most sensitive or most expensive step and work our way back here we are planning our flow around the most critical step the time required to boil the egg and we are staggering each of the other steps according to their individual throughput times in production jargon we offset them from each other the idea of a limiting step has very broad applicability take for example recruiting college graduates to work for Intel certain of our managers visit the college's interview some of the seniors and invite the more promising candidates to visit the company we bear the expense of the candidates trip which can be considerable during the trip the students are closely interviewed by other managers and technical people after due consideration employment is offered to some of the students whose skills and capabilities match our needs best and those who accept the offers eventually come to work for the company to apply the basic principle of production you need to build the sequence here around its most expensive feature which is the students trip to the plant to minimize the use of this step per final college hire we obviously have to increase the ratio of accepted offers to applicants invited to visit the plant we do this by using phone interviews to screen people before issuing invitations the technique saves money substantially increases the ratio of offers extended per plant visit and reduces the need to use the expensive limiting step the principle of time offsets is also present here working back from the time the students will graduate the recruiter staggers the various steps involved to allow time for everything on-campus interviews phone screening plant visits to take place at the appropriate times during the month preceding graduation now that we know what our production flow should look like we can use our breakfast service to examine other production principles as we make each breakfast we go through the three fundamental types of production operations there is process manufacturing an activity that physically or chemically changes material just as boiling changes an egg there is assembly in which components are put together to make a new entity just as the egg the toast and the coffee together make a breakfast and finally there is the test operation which examines a component for a new entity there are for example visual tests made it points in the breakfast production process you can see that the coffee is steaming and that the toast is brown process assembly and test operations can be readily applied to other very different kinds of productive work take for instance the task of training a Salesforce to sell a new product the three types of production operations can be easily identified the conversion of large amounts of raw data about the product in the meaningful selling strategies comprehensible to the sales personnel is a process which transforms data into strategies the combination of the various sales strategies into a coherent program can be compared to an assembly step here the appropriate product selling strategies and pertinent market data such as competitive pricing and availability are made to flow into one presentation along with such things as brochures handouts and flip charts the test operation comes in the form of a dry run presentation with a selected group of fields sales personnel and management if the dry run fails the test the material must be reworked another well-established manufacturing concept to meet the concerns and objections of the test audience breakfast preparation college recruiting and sales training are very much unlike one another but all of them possess a basically similar flow of activity to produce a specific output now real life as you know is full of thickets and underbrush so there are a few complications to be added to our production process we've been assuming our breakfast operation had infinite capacity that means nobody had to wait for an available toaster or for a pot to boil and I again but no such ideal world exists what would happen if you had to stand in the line of waiters waiting for your turn to use the toaster if you didn't adjust your production flow to account for the queue you're a three-minute egg could easily become a six-minute egg the whole production process has to be conceived differently toaster capacity has become the limiting step and what you do has to be reworked around it let's complicate things a little further what happens if you are stuck in line waiting for a toaster when it's time to start boiling your egg your conflict is seemingly irreconcilable but it really isn't if you were managing the restaurant you could turn your personnel into specialists by hiring one egg cooker one toast maker one coffee poorer and one person to supervise the operation but that of course creates an immense amount of overhead probably making it too expensive to consider if you are a waiter you could ask the waiter in line next to you to help out to put your toast in while you ran off to start your egg but when you have to depend on someone else the results are likely to be less predictable as the manager you could add another toaster but this becomes an expensive addition of capital equipment you could run the toaster continuously and build up an inventory of hot toasts throwing away what you can't use but always having immediate access to product that means waste which can also become too expensive for the operation but at least you know that alternatives do exist equipment capacity manpower and inventory can be traded off against each other and then balanced against delivery time because each alternative costs money your task is to find the most cost effective way to deploy your resources finding this way is the key to optimizing all types of productive work bear in mind that there is a right answer one that gives you the best delivery time and product quality at the lowest part will cost to find that right answer you must develop a clear understanding of the trade-offs between the various factors manpower capacity and inventory and you must reduce the understanding to a quantifiable set of relationships the thinking you force yourself to go through to understand the relationship between the various aspects of your production process is what is important here let's take our manufacturing example a step further and turn our business into a high-volume breakfast factory operation first you buy a continuous egg broiler a gadget with a conveyor belt that carries the eggs into a container of boiling water and removes them after three minutes producing a constant supply of perfectly boiled three-minute eggs note that our business now assumes a high and predictable demand for three-minute eggs it cannot now readily provide a four-minute egg because automated equipment is not very flexible second you match the output of a continuous egg boiler with the output of the continuous toaster we have now turned things into a continuous operation but we've done this at the expense of flexibility and we can no longer prepare each customer's order exactly when and how you requested so our customers have to adjust their expectations if they want to enjoy the benefits of our new mode lower cost and more predictable product quality but continuous operation doesn't automatically mean lower cost and better quality what would happen if a water temperature in the continuous egg boiler quietly went out of specification the entire work in process all the eggs in the boiler and the output of the machine from the time the temperature climbed or dropped to the time the malfunction was discovered becomes unusable all the toast is also wasted because you don't have any eggs to serve with it how do you minimize the risk of a breakdown of this sort performing a functional test is one way from time to time you open an egg as it comes out of the machine and check its quality but you will have to throw away the egg you tested a second way involves in process inspection which can take many forms you could for example simply insert a thermometer into the water so that the temperature could be easily and frequently checked to avoid having to pay someone to read this you could connect an electronic gadget to it that would set off bells anytime the temperature varied by a degree or two the point is that whenever possible you should choose in process tests over those that destroy product what else could go wrong with our continuous egg machine the eggs going into it could be cracked or rotten or they could be over or under sized which would affect how fast they cook to avoid such problems you will want to look at the eggs at the time of receipt something called incoming or receiving inspection if the eggs are unacceptable in some way you're going to have to send them back leaving you with none now you have to shut down to avoid that you need a raw material inventory but how large should it be the principle to be applied here is that you should have enough to cover your consumption rate for the length of time it takes to replace your raw material that means if your egg man comes by and delivers once a day you want to keep a day's worth of inventory on hand to protect yourself but remember inventory costs money so you have to weigh the advantage of carrying a day's supply against the cost of carrying it besides the cost of the raw material and the cost of money you should also try to gauge the opportunity at risk what would it cost if you had to shut your egg machine down for a day how many customers would you lose how much would it cost to lure them back such questions define the opportunity at risk all production flows have a basic characteristic the material becomes more valuable as it moves through the process a boiled egg is more valuable than a raw one a fully assembled breakfast is more valuable than its constituent parts and finally the breakfast placed in front of the customer is more valuable still the last carries the perceived value the customer associates with the establishment when he drives into the parking lot after seeing the sign and is better breakfasts a college graduate - who we are ready to extend an employment offer is more valuable to us than the college student we meet on campus for the first time a common rule we should always try to heed is to detect and fix any problem in a production process at the lowest you stage possible we should find and reject the rotten egg as it's being delivered from our supplier rather than permitting the customer to find it likewise if we can decide that result water college candidate at the time of the campus interview rather than during the course of a plant visit we save the cost of the trip and the time of both the candidate and the interviewers now that we've discussed delivering a breakfast from the point of view of production basics we're ready to talk about how to manage delivering a breakfast as managers will find that we need to consider four things how to choose and use indicators control our output assure quality and improve productivity we can start by assuming that a hungry public has loved the breakfast you've been serving and thanks to the help of your many customers and a friendly banker you've created a breakfast factory which among other things uses specialized production lines for toast coffee and eggs as manager of the factory you have a substantial staff and a lot of automated equipment but to run your operation well you will need a set of good indicators or measurements your output of course is no longer the breakfasts you deliver personally but rather all the breakfasts your factory delivers their profits generated and the satisfaction of your customers just to get a fix on your output you need a number of indicators to get efficiency and high output you need even more of them and you have to focus each indicator on a specific operational goal let's say that as manager of the breakfast factory you will work with five indicators to meet your production goals on a daily basis which five pieces of information would you want to look at each day immediately upon arriving at your office here are my candidates first you want to know your sales forecast for the day how many breakfasts should you plan to deliver to assess how much confidence you should place in your forecast you would want to know how many you delivered yesterday compared to how many you planned on delivering in other words the variance between your plan and the actual delivery of breakfast your next key indicator is raw material in the taury do you have enough eggs bread and coffee on hand to keep your factory running today if you find you have too little inventory you can still order more if you find you have too much you may want to cancel today's egg delivery another important piece of information is the condition of your equipment if anything broke down yesterday you will want to get it repaired or rearrange your production line to meet your forecast for the day you must also get a fix on your manpower if two waiters are out sick you will have to come up with something if you are still going to meet the demand forecasted should you call in temporary help should you take someone off the toaster line and make him a waiter finally you want to have some kind of quality indicator it's not left to monitor the number of breakfasts each waiter delivers because the waiters could have been rude to the customers even as they served a record number of breakfast perhaps you should set up a customer complaint log maintained by the cashier if one of your waiters elicited more than the usual number of complaints yesterday you will want to speak to him first thing today all these indicators measure factors essential to running your factory if you look at them early every day you will often be able to do something to correct a potential problem before it becomes a real one during the course of the day indicators tend to direct your attention toward what they are monitoring it is like riding a bicycle you will probably steer it where you are looking if for example you start measuring your inventory levels carefully you are likely to take action to drive your inventory levels down which is good up to a point but your inventories could become so lean that you can't react to changes in demand without creating shortages so because indicators direct your activities you should guard against overreacting this you can do by pairing indicators so both effect and counter effect are measured in the inventory example you need to monitor both inventory levels and the incidence of shortages a rise in shortages will obviously lead you to do things to keep inventories from becoming too low nor work and indicators and paired indicators we have more help then in administrative work our company has been using measurements to improve the productivity of administrative work for several years the first rule is that a measurement any measurement is better than none but a genuinely effective indicator will cover the output of the work unit and not simply the activity involved that means you measure salespeople by the orders they get not by the calls they make because orders are output while calls are just activity the second rule for a good indicator is that what you measure should be a physical countable thing for example your indicator for accounts payable could be the number of vouchers processed for custodial work it could be the number of square feet cleaned for customer service the number of sales orders entered and for inventory control the number of items managed in inventory since these are all quantity or output indicators for administrative work they're paired counterparts should stress the quality of the administrative work for example in accounts payable the number of vouchers processed should be paired with the number of errors found either by auditing or by suppliers the number of square feet cleaned by a custodial group should be paired with a partially objective and partially subjective rating of the quality of the work as assessed by a senior manager who has an office in the clean area work quantity and work quality indicators have many uses first they spell out very clearly what the objectives of an individual or group are second they provide a degree of objectivity when measuring an administrative function third and as important as any they give us a measure by which various administrative groups performing the same function in different organizations can be compared with each other the performance of a custodial group in one major building can now be compared with that of another group in a second building in fact if indicators are put in place the competitive spirit engendered frequently has an electrifying effect on the motivation each group brings to its work along with a parallel improvement in performance [Music] [Applause] this completes I've warned of career tracks high output management by dr. Andrew s Grove to get a better handle on the production process you should begin to think of our breakfast factory example as though it's a black box you'll learn more about this important concept on the next side as we continue now please fast forward this cassette to the end then turn it over to here side to [Music] [Music] you [Music] welcome to side two of career tracks high output management by Andrew S Grove as a manager once you've sampled the indicators to know what's happening in your business there's something else you need to know how to do control future output on this side you'll learn how to forecast future production needs and you'll hear tips on how to assure product quality here is side two to uncover more of these useful indicators we can think of our breakfast Factory as if it were a black box the input which is the raw materials flows into the box and the labor of waiters helpers and you the manager also flows into the box the output which is the breakfasts flows out of it in general we can represent any activity that resembles a production process in this simple fashion we can draw a black box to represent college recruiting where the input is the applicants on campus and the output is college graduates who have accepted our employment offers the labor is the work of our on-campus interviewers and the managers and technical people who interview back at the plant similarly the process of field sales training can be seen as a black box with the input being the raw product specifications and the output being trained sales personnel the labor here is the work of the marketing and Merchandising people who turn raw information into usable sales tools and train the field sales personnel in fact we can represent most if not all administrative work by our magical black box and we can sort out with the input the output and the labor are in the production process then to improve our ability to run that process we need to know what is going on inside the black box we need to cut some windows into the box so we can understand the internal workings of any production process and assess what the future output is likely to be various kinds of leading indicators can become those windows and give us a way to look inside the black box showing us in advance what the future might look like and because they give us time to take corrective action they make it possible to avoid problems of course for leading indicators to do any good you must believe in their validity while this may seem obvious in practice confidence is not as easy to come by as it sounds to take big costly or worrisome steps when you are not yet sure you have a problem is hard but unless you are prepared to act on what your leading indicators are telling you all you will get from monitoring them is anxiety leading indicators might include the daily monitors we use to run our breakfast factory from machine downtime records to an index of customer satisfaction both of which can tell us if problems lie down the road a generally applicable example of a window cut into the black box is the linearity indicator to create a linearity indicator for our college recruiting process for instance we plot the number of graduates who need to accept our offer in each month in order for us to reach our hiring target if we start making offers in January and needed to hit our hiring target by June our idea line starts at 0% just before we make our offers in January an angle straight up across our chart to hit 100% in June if we plot our actual progress against this ideal line we can see whether we are ahead or below our ideal goal if by April we find ourselves far below the ideal straight line we know that the only way we can hit our target is by getting acceptance at a much higher rate in the remaining two months than we had gotten in the preceding four thus the linearity indicator flashes an early warning allowing it's time to take corrective action if we consider a manufacturing unit in this fashion we may assume that because it makes monthly goals regular late fall as well but we can cut a window into the black box here measure production output against time as the month proceeds and compare that with the ideal linear output we may learn that output performance is spread evenly throughout the course of the month or that it is concentrated in the last week of the month if the latter is the case the manager of the unit is probably not using manpower and equipment efficiently and if the situation is not remedied one minor break down toward month's end could cause the unit to miss its monthly output goal entirely the linearity indicator will help you anticipate such a problem and is therefore quite valuable also valuable our trend indicators these show output measured against time and also against some standard or expected level a display of trends forces you to look at the future as you are led to extrapolate almost automatically from the past this extrapolation gives us another window in our black box also measurement against a standard makes you think through why the results were what they were and not what the standard said they would be another sound way to anticipate the future is through the use of the staggered chart which forecasts an output over the next several months the chart is updated monthly so that each month you will see your current forecast information compared to several prior forecasts if you are forecasting for say six months at a time you would write down in June what your forecasts are for each of the next six months July through December then in July you would note your forecasts for the months August through January in July you will also write down the actual figures for July so you can compare them with what you had forecast if you enter all this information on a chart you can readily see the variation of one forecast from the next which can help you anticipate future trends better than if you use the simple trend chart in my experience nowhere has the stagger chart been more productive than in forecasting economic trends we use it for example to forecast rates of incoming orders such a chart shows not only your outlook for business month by month but also how your outlook varied from one month to the next this way of looking at incoming business of course makes the people who do for casting take their tasks very seriously because they know that their forecasts for any given month will be routinely compared with future forecasts and eventually was the actual result but even more important the improvement or deterioration of the forecasted outlook from one month to the next provides the most valuable indicator of business trends that I have ever seen it's too bad that all economists and investment advisers aren't obliged to display their forecasts in a staggered chart form then we could really have a way to evaluate whatever anyone of them chooses to say finally indicators can be a big help in solving all types of problems if something goes wrong you will have a bank of information that shows all the parameters of your operation allowing in to scan them for unhealthy departures from the norm if you do not systematically collect and maintain an archive of indicators you will have to do an awful lot of quick research to get the information you need and by the time you have it the problem is likely to have gotten worse we've sampled the indicators a manager can use to know what's happening in the business so let's move on to the second thing that a manager has to know how to do controlling future output there are two ways to control the output of any Factory some industries build to order for example when you go shopping for a sofa you're going to have to wait a long time to get what you bought unless you buy it right off the floor a Furniture Factory builds to order when it learns what you want the factory looks for a hole in its manufacturing schedule and makes the item for you but if your competition in the sofa business makes the same product but has it ready in four weeks well you need four months you are not going to have many customers so even though you would much rather build to order you will have to use another way to control the output of your factory in short you will have to build two forecasts to do this the manufacturer sets up his activities around a reason speculation that porters will materialize for specific products within a certain time an obvious disadvantage here is that the manufacturer takes an inventory risk risking capital to respond to an faded future demand in good order at Intel we build a forecast because our customers demand that we respond to their needs in a timely fashion even though our manufacturing throughput times are quite long our breakfast factory makes its product to customer order but buys from its suppliers like the Eggman on the basis of forecasted demand similarly most companies recruit new college graduates to fill anticipated needs rather than recruiting only when a need develops which would be foolish because college graduates are turned out in the highly seasonal fashion so building to forecast is a very common business practice delivering a product it was built to forecast to a customer consists of two simultaneous processors each with a separate time cycle a manufacturing flow must occur in which the raw material moves through various production steps and finally enters the finished goods warehouse simultaneously a salesman finds the prospect and sells to that prospect who eventually places an order with the manufacturer ideally the order for the product and the product itself should arrive on the shipping dock at the same time because the art and science of forecasting is so complex you might be tempted to give all forecasting responsibilities to a single manager who can be made accountable for it but this usually doesn't work very well what works better is to ask both the manufacturing and the sales departments to prepare a forecast so that people are responsible for performing against their own predictions at Intel we try to match the manufacturing and selling flows with as much precision as possible if there's no match we end up with a customer order that we can't satisfy or with a finished product for which we have no customer either way we have problems obviously if the match does come off with a forecasted order becoming a real order the customers requirements can be nicely satisfied with the factory's product delivery the ideal is rarely found in the real world because neither the sales flow nor the manufacturing flow is completely predictable we should deliberately build a reasonable amount of slack into the system and inventory is the most obvious place for it clearly the more inventory we have the more change we can cope with and still satisfy orders but inventory costs money to build and keep and therefore should be controlled carefully ideally inventory should be kept at the lowest value stage as we've learned before like raw eggs kept to the breakfast factory also the lower the value the more production flexibility we obtain for a given inventory cost it's a good idea to use stager charts in both the manufacturing and sales forecasts as I noted they will show the trend of change from one forecast to another as well as the actual results by repeatedly observing the variance of one forecast from another you will continually pin down the causes of inaccuracy and improve your ability to forecast growth orders and the availability of product forecasting future demands and then adjusting output to the forecasts is an old and honored way of operating rigid factories but it is also an important way to increase the productivity of administrative factories administrative work has up to now been considered qualitatively different from work in a widget Factory and it has also lacked objective performance standards but if we have carefully chosen indicators that characterize an administrative unit and watch them closely we are ready to apply the methods of factory control to administrative work we can use actual standards inferred from the trend data to forecast the number of people needed to accomplish anticipated tasks by rigorous application of the principles of forecasting manpower can be reassigned from one area to another and the head count made to match the forecasted growth or decline in administrative activity without this rigor the staffing of administrative units would always be left at its highest level and given Parkinsons famous law people would find ways to let whatever they're doing fill the time available for its completion there is no question that having standards and believing in them and staffing an administrative unit objectively using forecasted workloads will help you to maintain and Ants productivity in addition to using indicators and controlling future output a manager has to know how to assure quality Manufacturing's Charter is to deliver product at a quality level acceptable to the customer at minimum cost to assure that the quality of our product will in fact be acceptable all production flows whether they make breakfasts or college graduates must possess inspection points to get acceptable quality at the lowest cost it is vitally important to reject the effective material at a stage where its accumulated value is at the lowest possible level in the language of production the lowest value point inspection is called incoming material inspection or receiving inspection if we use a black box again to represent our production process inspections that occur at points within it are called logically enough in process inspections finally the last possible point of inspection when the product is ready to be shipped to the customer is called final inspection or outgoing quality inspection when material is rejected at incoming inspection a couple of choices present themselves we can send it back to the vendor as unacceptable or we can waive our specifications and use the substandard material anyway using it would result in a higher reject rate in our production process than if we had used thoroughly acceptable material but that might be less expensive than shutting down the factory all together until our vendor provides better material such decisions can only be made properly by a balanced group of managers which typically consists of representatives from the Quality Assurance manufacturing and design engineering departments this group can weigh all the consequences of rejecting or accepting substandard raw material while in most instances the decision to accept or reject defective material at a given inspection for it is an economic one a manager should never let substandard material be used when its defects could cause a complete failure a reliability problem for our customer because we can never assess the consequences of an unreliable product we can't make compromises when it comes to reliability think of a component going into the cardiac pacemaker if the component doesn't work upon receipt for the manufacturer he can replace it while the unit is still in the factory this will probably increase costs but if the component fails later after the pacemaker has been implanted the cost of the failure is much more than the financial one inspections of course cost money to perform and further add to expense by interfering with the manufacturing flow and making it more complicated accordingly a manager should recognize that a balance exists between the desired result of the inspection improved quality and disturbance to the production process itself which should be minimal let's consider a few techniques commonly used to balance the two needs there is a gate like inspection and the monitoring step in the gate like inspection all material is held at the gate until the inspection tests are completed if the material passes it is moved on to the next stage in the production process if the material fails it will be returned to an earlier stage where it will be reworked or scrapped in the monitoring step a sample of the material is taken and if it fails a notation is made from which a failure rate is calculated the bulk of the material is not held as the sample is taken but continues to move through the manufacturing process the smoothness of the flow is maintained but if for example three successive samples fail the monitoring tests we can South alive what is the trade-off here if we hold all the material we add to throughput time and slow down the manufacturing process a monitor produces no comparable slowdown but might let some bad material escape before we can act on the monitors results and shut things down which means that we might have to reject material later at a higher value stage clearly for the same money we can do a lot more monitoring than gate type inspection and if we do more monitoring we may well contribute more to the overall quality of the product then if we do less frequent gate like inspections but any choice has to be made with a specific case in mind as rule of thumb we should lean toward monitoring when experience shows we are not likely to encounter big problems another way to lower the cost of quality assurance is to use variable inspections because quality levels vary over time it is only common sense to vary how often we inspect for instance if for weeks we don't find problems it would seem logical to check less often but if problems begin to develop we can test ever more frequently until quality again returns to the previous higher level the advantage here is still lower costs and even less interference with a production flow yet this approach is not used very often even in widget manufacturing why not probably because we are creatures of habit and keep doing things the way we always have whether it be from week to week or year to year suitably thought through intelligent inspection schemes can actually increase the efficiency and productivity of any manufacturing or administrative process let's take an example very different from the making of widgets or breakfasts I recently read a story in a news magazine that said the American Embassy in London could not deal with the deluge of visa applications some 1 million Britons apply for visas each year of which about 98% are approved the embassy employs 60 people who process as many as 6,000 applications a day most applications are received by mail and at anytime from 60,000 to 80,000 British passports are in the Embassy's hands meanwhile lines of 100 or more British and other Nationals stand in front of the building looking for an opportunity to walk their passports through the embassy has tried a number of ways to handle matters more efficiently including newspaper advertisements asking tourists to apply early and to expect a three week turnaround the Embassy also installed boxes where applicants could drop off their passports and visa applications if they really needed same-day service even so the lines at the embassy remained long in fact the Embassy's expediting schemes only made the the worse because nothing was done to address the basic issue to speed the processing of visas overall time and money were spent to classify various kinds of application slated for different processing times but this only created more logistical overhead with no effect on output if our government wants British tourists to visit the United States our government should not irritate these would-be visitors and if the embassy can't get the money to increase its staff a simple solution can be borrowed from basic production techniques we need in short to replace their present scheme with the quality assurance test for that the bureaucratic minds of the embassy would need to accept that a 100 percent check of the visa applicants is unnecessary some 98 % of those applying are approved without any question so if the embassy were to institute a sampling test of visas a quality assurance test and a thorough one of that the log jam of applications could be broken without materially increasing the chance that the undesirable will enter our country moreover the embassy could select the sample to be checked according to predetermined criteria the visa processing could then work rather like the Internal Revenue Service through the checks and audits that the IRS performs that government agency induces compliance among most taxpayers without having an agent look at every single return later when we examine managerial productivity will see that when managers dig deeply into the specific activity under their jurisdiction they're applying the principle of variable inspection if the managers examined everything their subordinates did they would be meddling which for the most part would be a waste of their time even worse their subordinates would become accustomed to not being responsible for their own work knowing full well that their supervisor will check everything out closely the principle of variable inspection applied to managerial work nicely skirts both problems and gives us one important tool for improving managerial productivity being able to improve productivity was the fourth thing I said a manager must be able to do and there are two basic ways to go about it the workings of our black box can furnish us with the simplest and most useful definition of productivity productivity is output divided by the labor required to generate the output so one way to increase productivity is to do whatever we are now doing but faster this could be done by reorganizing the work area or just by working harder a second way to improve productivity is to change the nature of the work performed what we do not how fast we do it as the slogan has it we want to work smarter not harder here I'd like to introduce the concept of leverage which is the output generated by a specific type of work activity an activity with high leverage will generate a high level of output an activity with low leverage a low level of output for example a waiter able to boil two eggs and operate two toasters can deliver two breakfasts for almost the same amount of work as one his output per activity and therefore his leverage is high a waiter who can handle only one egg in one toaster at a time possesses lower output and leverage a very important way to increase productivity is to arrange the work flow inside our black box so that it will be characterized by high output per activity which is to say high leverage activities [Music] this complete side to management is a team game and there are four key management skills or abilities we're thinking of management as a team game can really pay off you'll learn these on the next slide as we continue with high output management by Andrew S Grove now please load the next cassette and listen to side three [Music] [Music] you [Music] this is side three of high output management by Andrew s Grove now that you have a clear picture of the production process and some critical managerial abilities let's look more closely at several effective ways managers can increase their abilities and productivity on this side you'll learn important techniques in the areas of managerial leverage getting the most from meetings decision-making and planning here is side three automation is certainly one way to improve the leverage of all types of work but in both rigid manufacturing and administrative work something else can also increase the productivity of the black box this is called work simplification to get leverage this way you first need to create a flow chart of the production process as it exists every single step must be shown on it no steps should be omitted in order to pretty things up on paper second count the number of steps in the flow chart so that you know how many you started with third set a rough target for reduction of the number of steps in the first round of work simplification our experience at Intel shows that you can reasonably expect a 30 to 50 percent reduction to implement the actual simplification you must question apply each step is performed typically you will find that many steps exist in your workflow for no good reason often they are there by tradition or because formal procedure ordains it and nothing practical requires their inclusion remember the visa Factory at our Embassy in Britain didn't really have to process 100% of the applicants so no matter what reason may be given for a step you must critically question each and throw out those that common sense says you can do without of course the principle of work simplification is hardly new in the widget manufacturing arts industrial engineers have been doing it for 100 years for the application of the principle to improve the productivity of the soft professions the administrative professional and managerial workplace is new and slow to take hold the major problem to be overcome is defining what the output of such work is or should be as we will see in the work of the soft professions it becomes very difficult to distinguish between output and activity and as I noted stressing output is the key to improving productivity looking to increase activity can result in just the opposite now that we have a good picture of the production process and some critical managerial abilities we can look more closely that ways managers can increase their abilities and productivity here I'm going to concentrate on teamwork in management management is a team game and there are four key management skills or abilities we're thinking of management as a team game really pays off the for our managerial leverage getting the most from meetings decision-making and planning if we as managers want to increase our output through leverage and in meetings decision-making and planning the first thing we have to be able to do is to distinguish output from activity what is the manager's output I asked a group of middle managers just that question I got these responses output is judgements and opinions Direction allocation of resources mistakes detected personnel trained and subordinates developed courses taught products planned commitments negotiated do these things really constitute the output of a manager I don't think so they are instead activities or descriptions of what managers do as they try to create a final result or output what then does make up managers output at Intel if they are in charge of wafer fabrication plants their output consists of completed high quality fully processed silicon wafers if they supervise a design group their output consists of completed designs that work correctly and are ready to go into manufacturing similarly if managers are high school principals their output will be trained and educated students if managers are surgeons their output will be fully recovered healed patients we can sum matters up with the proposition that a manager's output equals the output of the managers organization plus the output of the neighboring organizations that are under the managers influence why because business and education and even surgery represent work done by teams managers can do their own jobs their individual work and do it well but that does not constitute their output if the managers have groups of people reporting to them or circles of people influenced by them the managers output must be measured by the output created by their subordinates and associates if the managers our knowledge specialists or know-how managers their potential for influencing neighboring organizations is enormous the internal consultant who supplies needed insight to a group struggling with a problem will affect the work and the output of the entire group similarly if a lawyer acquires a regulatory permit for a drug company he will release the flow of the result of many years of research at that company to the public or a marketing analyst who reviews mountains of information product information market information competitive information analyzes market research and makes fact-finding visits can directly affect the output of many neighboring organizations her interpretations of the data and her recommendations will perhaps guide the activities for the whole company thus the definition of manager should be broadened individual contributors who gather and disseminate know-how and information should also be seen as middle managers because they exert great power within the organization but the key definition here is that the output of managers is a result achieved by groups either under their supervision or under their influence while the managers all work is clearly very important that in itself does not create output their organizations create output by analogy a coach or a quarterback alone does not score touchdowns and win games entire teams do League standings are kept by team not by individual business and this means not just the business of Commerce but the business of Education the business of government the business of medicine is a team activity and always it takes a team to win it is important to understand that managers will find themselves engaging in an array of activities in order to affect output as the middle managers I queried said managers must form opinions and make judgments they must provide direction they must allocate resources they must detect mistakes and so on all these are necessary to achieve output but output and activity are by no means the same thing consider my own managerial role as president of a company I can affect output through my direct subordinates group general managers and others licensed by performing supervisory activities I can also influence groups not under my direct supervision by making observations and suggestions to those who manage them both types of activity will I hope contribute to my output as a manager by contributing to the output of the company as a whole I was once asked by a middle manager at Intel how I could teach in plant courses visit manufacturing plant 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 answer his own question I guess those things are your job to Wednesday they are absolutely my job not my entire job but part of it because they help add to the output of Intel let me give you another example Cindy an engineer at Intel supervises an engineering group in a wafer fabrication plant 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 in both roles Cindy contributes to the output of the wafer fabrication plant as the supervising engineer she performs activities that increase the output of the plant in which she works as a member of the advisory body she provides specialized knowledge that will influence and increase the output of all the other Intel wafer fabrication plants let's refer again to our black box if the machinery within an organization can be compared to a series of gears we can visualize how middle managers effect output in times of crisis they provide power to the organization when things aren't working as smoothly as they should middle managers apply a bit of oil and of course they provide intelligence to the machine to directors purpose because you are a manager has anybody ever asked you as a manager what you really do most of us have had the struggle to answer that question what we actually do is difficult to pin down on some up much of it often seem so inconsequential but 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 the output seems important and worthwhile the activities often seem trivial and messy but a surgeon whose output is a cured patient spends his time scrubbing and cutting and suturing and this hardly sounds very respectable either to find out what we managers really do let's review one of my busier days I'll describe the activity in which I was engaged explain it a bit and categorize it into types these types of activity are information gathering information giving decision-making giving nudges and being a role model afterward I'll discuss these types of activity and more detail here we go from 8 o'clock to 8:30 a.m. I met with a manager who had submitted his resignation to leave you for another company I listened to his reasons that was information-gathering I felt he could be turned around and saved for Intel so I encouraged injured talk to certain other managers about a career change this was an edge and I made a decision to pursue this matter with them myself during this time I also took a phone call from a competitor ostensibly he was calling about a meeting of an industry-wide society but in reality he was feeling out how I saw business conditions I did the same this was information gathering from 8:30 until 9:00 a.m. I read mail from the previous afternoon a scribbled messages on about half of it some of these were expressions of encouragement or disapproval others were exhortation is to take certain types of action here I was giving edges making a decision I denied one request to proceed with a particular small project of course I was information-gathering as I did this - from 9:00 a.m. to 12:00 o'clock noon I attended the weekly executive staff meeting we gathered information by reviewing the prior months incoming order and shipment rates and we engaged in decision making by setting priorities for the upcoming annual planning process then we reviewed the status of a major marketing program earlier we had decided that this program was faltering and required review now we found that it was doing a little bit better than before this was information gathering but the presentation still elicited a lot of comments and suggestions that is edges from the people at the meeting file 8 we gathered information by reviewing a program to reduce the manufacturing cycle time of a particular product line since the presentation showed that the program was in good shape no further action was taken from 12 noon to 1:00 p.m. I had lunch in the company cafeteria I happened to sit with members of our training organization who complained about the difficulty they had in getting me and other senior managers to participate in training at our foreign locations their complaint was news to me so this was information gathering I made a note to follow up with my own schedule as well as with my staff and to nudge them in doing a better job of supporting the foreign training program after lunch from 1 p.m. to 2 o'clock in the afternoon I attended a meeting regarding a specific product quality problem the bulk of the meeting was information gathering getting sufficient information on the status of the products from the corrective action that had been implemented the meeting ended in a decision made by the division manager with my concurrence to resume shipment of the product next from 2 p.m. to 4 p.m. I gave a lecture for our employee orientation program in this program senior management gives all professional employees of presentation describing the objectives history management systems and so forth of the company at its major groups I am the first lecturer in the series here I was giving information and I was a role model not only in communicating the importance we place on training but also in the way I handled questions and comments and represented in living form some of the values of the company at the same time the nature of the questions gave me a feeling for the concerns and level of understanding of a large number of employees employees I don't ordinarily have access to so this meeting also represented information gathering I spent the time from 4 to 4:45 in the afternoon in my office returning phone calls during these calls I disapproved grabbing a compensation increase to a particular employee which I thought was way outside of the norm this was clearly a decision I also decided to conduct a meeting with a group of people to decide what organization would move to a new site we were opening in another state this was a decision to hold a decision-making meeting from 4:45 to 5:00 p.m. I met with my assistant and discussed a variety of requests for me to attend the number of meetings for those that I decided not to attend I suggested alternatives phylite from 5 p.m. to 6:15 I read today Ismael including progress reports like the morning's mail reading this was information gathering interspersed with nudging and decision-making as you think about what happens during my day you won't see any obvious patterns I dealt with things in a seemingly random fashion also my day always ends when I'm tired and ready to go home not when I'm done because I am never done managers must keep many balls in the air at the same time and shift their energies and attention to activities that will most increase the output of their organizations in other words they should move to the point where their leverage will be the greatest as you can see much of my day is spent acquiring information and as you can also see I use many ways to get it I read standard reports and memos but also get information ad hoc I talked to people inside and outside the company managers at other firms or financial analysts or members of oppressed customer complaints both external and internal are also a very important source of information 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 asked 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 let me bring you may have missed but reports also have another totally different function as they are formulated and written the authors are forced to be more precise than they might be verbally so the reports value stems from the discipline and the thinking the writers are forced to impose upon themselves as they identify and deal with trouble spots in their presentations writing the report is important reading it often is not similarly our Capitol authorization process 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 to improve and maintain your capacity to get information you have to understand the way it comes to you there's a hierarchy involved verbal sources are the most valuable but what they provide is also incomplete and sometimes inaccurate like a newspaper headline that can give you only the general idea of a story a headline can't give any of the details and might even give you a distorted idea of what the real story is you read the newspaper article itself to find out who what where why now after getting a real story you should have some reiteration and perspective which can be compared to reading a news magazine or even a book each level in your information hierarchy is important and you can rely on none alone though the most thorough information might come from the news magazine you do not of course want to wait a full week after an event to find out about it your information sources should complement one another and also be redundant because that gives you a way to verify what you've learned 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 why should you do this think of what happens when people come to see managers in their offices a certain stop and start dynamics occurs when the visitors have done something socially dictated while a two-minute kernel of information is exchanged the meeting often takes a half hour but if managers walk through their areas and see people with whom they have two minute concerns they can simply stop cover the concerns and be on their way get all for the subordinates when they initiate conversation accordingly such visits are an extremely effective and efficient way to transact managerial business then why are they underutilized because of the awkwardness that managers feel about walking through an area without a specific task in mind at Intel we combat this problem by using programmed visits meant to accomplish formal tasks but rich also set the stage for ad-hoc mini transactions for example we ask our managers to participate in mr. cleaning inspections in which they go to a part of the company that they normally wouldn't visit the managers examine the housekeeping the arrangement of pain the labs and the safety equipment and in so doing spend an hour or so browsing around and getting acquainted with things firsthand as my schedule showed managers not only gather information they are a source of information and giving information is a second major managerial activity beyond relaying facts to their own organisations and the groups they influence managers must also communicate their objectives priorities and preferences as they relate to certain tasks so their subordinates will know how to make decisions that will be acceptable transmitting objectives and preferred approaches is a key to successful delegation someone who adheres to the values of a corporate culture will behave in consistent fashion under similar conditions which means that managers don't have to suffer the inefficiencies engendered by the formal rules procedures and regulations they're sometimes used to get the same result the third major kind of managerial activity of course is decision making to be sure once in a while 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 we'll talk later about just how decisions should be made meanwhile let's say that decisions can be separated into two kinds the forward-looking kind are made for example in the capital authorization process here we allocate the financial resources of the company among various future undertakings the second kind are made as we respond to a developing problem or a crisis 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 the managers life other activities conveying information making decisions and being a role model for your subordinates are all governed by the base of information that you the manager have about the tasks the issues the needs and the problems facing your organization in short information gathering is the basis of all of our managerial work which is why I choose to spend so much of my day doing it you often do things of the office designed to influence events slightly maybe making a phone call to an associate suggesting that a decision be made in a certain way or sending a node or a memo that shows how you see a particular situation or making a comment during an oral presentation 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 I call it Neji because through it you imagine individual for a meeting in the direction you would like this is an 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 madge things a dozen times finally something more subtle pervades the day of all managers while we move about doing what we regard as our jobs we are role models for people in our organization our subordinates our peers and even our supervisors much has been said and written about a manager's need to be a leader the fact is no single managerial activity can be said the constitute leadership and 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 visibly all managers need to act so that they can be seen exerting influence but they should do so in their own way some of us feel comfortable dealing with large groups talking about our feelings and values openly in that fashion others prefer working one-on-one with people in a quieter more intellectual environment these and other styles of leadership will work but only if we recognize and consciously stress the need for us to be role models for people in our organization don't think for a moment that the way I described leadership applies only to large operations an insurance agent in a small office who continually talks with personal friends on the phone imparts a set of values about permissible conduct to everyone working for her a lawyer who returns to his office after lunch a little drunk does the same on the other hand a supervisor in the company large or small who takes his work seriously exemplifies to his associates the most important managerial value all this complete side three of career tracks high-output management by Andrew s Grove as a manager a great deal of your work has to do with allocating resources manpower money and capital but the single most important resource you can allocate from one day to the next is your time you'll learn how to allocate this valuable resource on the next side please fast forward this tape to the end then turn it over to your side [Music] [Music] you [Music] [Music] [Applause] [Music] welcome to side four of career tracks high output management for every activity a manager performs the output of the organization should increase by some measurable degree the extent to which that output is increased is determined by the leverage of that activity and clearly the key to high output is being sensitive to the leverage of what you do during your day you'll learn more about this important concept as we continue here is side for a great deal of managers work has to do with allocating resources manpower money and capital but the single most important resource that we allocate from one day to the next is our own time in principle more money more manpower or more capital can always be made available but our own time is the one absolutely finite resource we each have it's allocation and use therefore deserve considerable attention how you handle your own time is in my view the single most important aspect of being a role model and leader in a typical day of mine I can count some 25 separate activities in which I participated mostly information gathering and information giving but also decision making and nudging some 2/3 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 meetings provide an occasion for managerial activities getting together with others is not of course inactivity it is a medium you as a manager can do your work in the meeting in a memo or through a lot of speaker for that matter but you must choose the most effective medium for what you want to accomplish and that is the one that gives you the greatest leverage now leverage was the concept I introduced earlier in discussing productivity meetings allow me to leverage my time what else can I do to gain greater managerial leverage first let me define leverage more precisely for every activity a manager performs the output of the organization should increase by some degree the extent to which that output is increased is determined by the leverage of that activity clearly the key the high output is being sensitive to the leverage of what you do during the day the output of managers per unit of time worked can be increased in three ways first by increasing the rate with which managers perform their activities speeding up their work second by increasing the leverage associated with the various managerial activities and third by shifting the mix of managers activities from those with lower to those with higher leverage so let's consider the leverage of various types of managerial work high leverage activities can be achieved in these basic ways when many people are affected by one manager when a single 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 and when a large groups work is affected by an individual supplying a unique key piece of knowledge or information having many people affected by one manager is the most obvious example of a high leverage activity consider Robin and Intel finance manager responsible for setting up the annual financial planning process for the company when Robin defines in advance exactly what information needs to be gathered and presented of each stage of the planning process and lays out who is responsible for what she directly affects the subsequent work of perhaps 200 people who participate in the planning process by spending a certain amount of time in advance of the planning activities Robin will help to eliminate confusion and ambiguity for a large population of managers over an extended period of time consequently her work contributes to the productivity of the entire organization and clearly has great leverage leverage that depends however on when it is performed work done in advance of the planning meeting obviously has great leverage if Robin has to scramble later to help a manager define guidelines and milestones her work will clearly have much less leverage to maximize the leverage of their activities managers must keep timeliness which is often critical firmly in mind leverage can also be negative some managerial activities can reduce the output of an organization suppose I am a key participant at a meeting and I arrive unprepared not only do I waste the time of the people attending the meeting because of my lack of preparation but I deprive the other participants of the opportunity to use that time to do something else each time a manager imparts knowledge skills or values to a group his leverage is high as members of the group will carry what they learn to many others but again leverage can be positive or negative an example of leverage that I hope is high and positive is might 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 200 new employees besides 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 here is another example of this kind of leverage to train a group of salespeople Barbera and Intel marketing engineer sets out to teach them what the organization's products are if she does her job well these salespeople will be better equipped to sell the line if she does it poorly great and obvious damage is done a final less formal example here Cindy as you recall is a member of a technical coordinating body in which he tries to disseminate her understanding of a specific technology to all of the companies manufacturing groups in effect she uses the coordinating body as an informal training vehicle to affect high leverage on her counterparts in neighboring Intel organizations managers can also exert high leverage by engaging in activities that take them only a short time but that effect another person's performance over a long time performance reviews represent a good example of this with a few hours work that managers spend preparing and delivering each review they can affect the work of the recipients enormous Lee here are two managers can exert either positive or negative leverage subordinates can be motivated and even redirected in their efforts or the reviews can discourage and demoralize them for who knows how long another seemingly trivial piece of work creating a tickler file can improve daily work significantly for a long time setting up this simple mechanically it is a one-time activity yet it is likely to improve the productivity of the managers who use it indefinitely the leverage here is very very high examples of high- leverage abound after going through the annual planning process an Intel manager saw the inspite of successful cost reduction efforts in the prior year his division was still not to make any money in the coming year the manager became depressed though he didn't realize it he almost immediately began to affect people around him and soon depression spread throughout his organization he snapped out of it only when someone on his staff finally told him what he was doing to the people under him another example is waffling this occurs when a manager puts off a decision that will affect the work of other people in effect the lack of a decision is the same as a negative decision no green light is a red light and work can stop for a whole organization managerial middling is also an example of negative leverage this occurs when supervisors use their superior knowledge and experience of subordinates responsibilities to assume command of situations rather than letting the subordinates work things through themselves for example if a senior manager sees an indicator showing an undesirable trend and dictates to the person responsible a detailed set of actions to be taken that is managerial meddling after being exposed to a lot of meddling the subordinates will begin to take a much more restricted view of what is expected of them show less initiative in solving their own problems and refer them instead to their supervisors because the output of the organization will consequently be reduced in the long run meddling is clearly an activity having negative managerial leverage the Third Kind of managerial activity with high leverage is exercised by a person with unique skills and knowledge one such person is an intel marketing engineer responsible for setting prices for the product line hundreds of salespeople in the field can be negatively effected if prices are set too high no matter how hard they may try they won't be able to get any business of course if the prices were set too low we would be giving money away take another example an intel development engineer who has uniquely detailed knowledge of a particular manufacturing process effectively controls how it is used since the process will eventually provide the foundation for the work of many product designers all over the company the leverage the development engineering search is enormous the same is true for a geologist in an oil company for an actuary in an insurance firm all our specialists whose work is important for the work of their organization at large the knowledge specialists were 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 to select the one or two or three that provide leverage well beyond the others and to concentrate on them for me paying close attention to customer complaints constitutes a high leverage activity aside from making a customer happy the activity tends to give me 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 my personal attention choosing which one out of 10 or 20 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 because managerial time has a hierarchy of values delegation is an essential aspect of Management for high leverage the delegate or and delegate II must share a common information base and the 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 delegate II can become an effective proxy only with specific instructions 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 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 for your managerial effectiveness this is not too bad so long as it is based on a conscious decision that you will hold on to certain tasks that you enjoy performing even though you could if you chose delegate them but be sure to know exactly what you're doing and avoid the charade of insincere delegation which can produce immense negative managerial leverage given a choice should you delegate activities that are familiar to you or those that aren't before answering consider the following principle delegation without follow-through is abdication you can never wash your hands of a task even after you delegate it you are still responsible for its accomplishment and monitoring the delegated task is the only practical way for you to ensure a result monitoring is not meddling it 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 but recall the pencil experiment and understand that this will very likely go against your emotional drain 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 are delegated don't wait until your subordinates have spent time polishing them in the final form before you find out that you have a basic problem with the content a second Quality Assurance principle applies to the frequency with which you check your subordinates work a variable approach should be employed using different sampling schemes with various subordinates you should increase or decrease your frequency depending on whether your subordinates are performing a newly delegated task or one that they have experienced family how often you monitor should not be based on what you believe your subordinates can do in general but on their experience with specific tasks and their prior performance as your subordinates work improves over time you should respond by reducing the intensity of the monitoring to use quality assurance principles effectively managers should only go into details randomly just enough to try to ensure that subordinates are moving ahead satisfactorily to check into all the details of a delegated task would be like quality assurance testing 100% of what manufacturing turned out making certain types of decisions is something managers frequently delegate to subordinates how is this best done by monitoring their decision-making process how do you do that let's examine what Intel goes through to approve a capital equipment purchase we ask a subordinate to think through the entire matter carefully before presenting a request for approval and a monitor how good the person's thinking is we ask him quite specific questions about his request during a review meeting if he answers them convincingly we'll give an approval this technique allows us to find out how good the thinking is without having to go through it ourselves you can get even more out of your highly leveraged activities by increasing the speed at which you perform them this is the most obvious way of increasing managerial output and time management techniques have been the honest approach to it any number of consultants will tell managers that the way to higher productivity is to handle a piece of paper only once to hold only stand-up meetings which will presumably be short and to turn their desks so that they present their backs to their office doors these time management suggestions can be improved upon I think by applying our production principles first we must identify our limiting step back to that breakfast factory example what is the egg in our work in the managers life some things really have to happen on a schedule that is absolute for me an example is the class I teach I know when it is going to meet and I know I must prepare for it there is no give in the time here because over 200 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 a movable and manipulate the more yielding activities around it we can work more efficiently a second production principle we can apply to managerial work is batching similar tasks any manufacturing operation requires a certain amount of set-up time so for managerial work to proceed efficiently we should use a single set-up effort for a whole group of similar activities 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 for groups similarly if managers have a number of reports to read or a number of performance reviews to approve they 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 setup time needed for the task what makes running a factory different from running a job shop the job shop is prepared to service any customer who drops in the owner handles the job required and moves on to the next rep a factory on the other hand is usually run by forecasts and not by individual order for 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 early common sense and an important way to minimize the feeling and the reality of fragmentation experienced in managerial work forecasting and planning your time around key events like the egg in the breakfast factory are literally like running an efficient factory what is the medium of managers forecasts it is something very simple their calendars most people use their calendars as a repository of orders that come in someone throws an order to them for their time and it automatically shows up on their calendars this is mindless passivity to gain better control of their time managers should use their calendars as production planning tools taking firm initiatives to schedule work that is not time critical between those limiting steps in the day another production principle can be applied here because manufacturing people trust their indicators they would allow material to begin its journey through the factory if they think it is already operating at capacity if they did material might go half way through and back up behind the bottleneck instead factory managers say no at the outset so they don't overload the system other kinds of managers find this hard to apply because their indicators of capacity are not as well established or not as believable how much time do you need to read your mail to write your reports to meet with a colleague you may not know precisely but you surely have a feel for the time required and you should exploit that sense to schedule your work to use your calendar as a production planning tool you must accept responsibility for two things you should move toward the active use of your calendar taking the initiative to fill the holes between the time critical events with non time critical though necessary activities 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 the wait until something reaches a higher value stage and then abort due to lack of capacity means losing more money in 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 the next production principle you can apply is to allow slack a bit of looseness in your scheduling highway planners for example know that a freeway can handle an optimum number of vehicles having fewer cars means that the road is not being used at capacity but at that optimum point if just a few more cars are allowed to enter the traffic flow everything comes to a crunching halt with the new metering devices that control access during the rush hour planners can get a fix on the right number the same thing can be done for managerial work there is an optimum degree of loading with enough slack built-in so that one unanticipated phone call will not ruin your schedule for the rest of the day you need some slack another production principle is very nearly the opposite managers should carry a raw material inventory in terms of project this is not to be confused with a work in process inventory because that like eggs in a continuous boiler tends to spoil or become obsolete over time instead this inventory should consist of things you need to do but don't need to finish right away discretionary projects the kind you can work on to increase your group's productivity over the long term without such an inventory of projects managers will most probably use their free time meddling in their subordinates and don't forget this production principle most production practices follow well-established procedures and rather than reinventing the wheel repeatedly use a specific method that has been shown to work before but managers tend to be inconsistent they 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 another important component of managerial leverage is the number of subordinates managers have if they do not have enough their leverage is obviously reduced if they have too many they get bogged down with the same result as a rule of thumb managers whose work is largely supervisory should have six to eight subordinates three or four or too few and ten or too many this range comes from a guideline that managers should allocate about a half day per week to each of their subordinates two days a week per subordinate would probably lead the medaling an hour a week does not provide enough opportunity for monitoring the 6:00 to 8:00 rule six to eight subordinates for a manager whose work is largely supervisory is right for the classically hierarchical managers whose primary work is the supervision of others what about know-how managers the middle managers who mainly supply expertise and information even if they work without a single subordinate servicing a number of varied customers as an internal consultant can in itself be a full-time job in fact anyone who spends about a half day per week as a member of a planning advisory or coordinating group has the equivalent of a subordinate so as a rule of thumb if managers are both hierarchical supervise and suppliers of know-how they should try to have a total of six to eight subordinates or their equivalent sometimes the business is organized in a way that makes the ideal fan-out of six to eight subordinates hard to reach a manufacturing plant for example may have an engineering section and a production section in which case the plant manager would only have two people reporting directly to him the manager might then choose to act as one of the two subordinates choosing to be his own engineering manager for instance if he does that the manufacturing manager will still report to him and the people who would ordinarily report to the head of engineering will also report to him so he will actually have six direct reports five engineers and the manufacturing manager this complete side for of career tracks high output management by Andrew Grove did you know that the use of indicators especially a bank of indicators kept over time can also reduce the time managers spend dealing with interruptions you'll learn more about this important time management concept on the next side please replace this cassette with side five and continue [Music] you [Music] this is side five of careertech's hide output management by Andrew growth on this side we'll cover additional information on managerial leverage then we'll cover significant information on the curse of the managers existence the topic of meetings here is sideline the next important production concept we can apply to increasing our leverage as managers is to strive toward regularity we can obviously run our breakfast factory more efficiently if customers arrived in a steady and predictable stream rather than dropping in by ones and twos though we can't control our customers habits we should try to smooth out our workload as much as possible as I said we should try to make our managerial work take on the characteristics of a factory not a job shop accordingly we should do everything we can to prevent little stops and starts in our day as well as interruptions brought on by big emergency even though some emergencies are unavoidable we should always be looking for sources of future high-priority trouble by cutting windows into the black box of our organization recognizing you've got a time bomb on your hands means you can address a problem when you want to not after the bomb has gone off but because you must coordinate your work with that of other managers you can only move toward regularity if others do too in other words the same box of time must be used for like activities for example at Intel Monday mornings have been set aside throughout the corporation as the time when planning groups meet so anybody who belongs to one can count on Monday for that purpose and be free of scheduling conflicts about 20 middle managers at Intel were once asked to be part of an experiment after repairing up they tried some role-playing enriched one manager was to define the problem most limiting his output and the other was to be a consultant who would analyze the problem and propose solutions the most common problem cited was uncontrolled interruptions which affected both supervisory and know-how managers in a remarkably uniform fashion moreover the interruptions had a common source most frequently coming from subordinates and from people outside the managers immediate organization but whose work the managers influenced the most frequently proposed solutions were not very practical the idea mentioned most often was to create blocks of time for individual work by actually hiding from the interrupter but this is a less than happy answer because the interrupter 'he's obviously have legitimate problems and if the manager is responded by hiding these would pile up one solution was a suggestion that customers not call marketing managers of certain hours no good there are better ways let's apply a production concept manufacturers turn off standard products by analogy if you can pin down what kind of interruptions you're getting you can prepare standard responses for those that pop up most often people don't come up with totally new questions and problems day in and day out and because the same ones tend to surface repeatedly managers can reduce the time spent handling interruptions by using standard responses having them available also means that managers can delegate much of the job to less experienced personnel also if you use the production principle of batching that is handling a group of similar chores at one time many interruptions that come from your subordinates can be accumulated and handled randomly but at staff and 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 a bank of indicators kept over time can also reduce the time managers spend dealing with interruption how fast they can answer a question depends on how fast they can put their fingers on the information they need for a response by maintaining archives of information managers don't have to do ad hoc research every time the full range if the people who interrupt you knew how much they were disturbing you they would probably police themselves more closely and cut down on the number of times they felt they had to talk to you right away in any case managers should try to force frequent interrupt errs to make an active decision about whether an issue can wait so instead of going into hiding managers can hang signs on their doors that say I am doing individual work please don't interrupt me unless it really can't wait until 2 p.m. then hold an open office hour and be completely receptive to anybody who wants to see you the key is this understand that interrupts errs have legitimate problems that need to be handled that's why they're bringing them for you but you can channel the time neither 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 managers cope with problems to make something regular that was once irregular is a fundamental production principle and that's how you should try to handle the interruptions that plague you now that we've covered managerial leverage in detail we can move on to the topic of meetings I mentioned a few points about meetings earlier but because they are such an important part of Management as a team game we should look more closely as the best ways to approach them meetings have a bad name one school of management thought considers them the curse of the manager's existence someone who did a study found that managers spent up to fifty percent of their time in meetings and implied that this was time wasted Peter Drucker once said that spending more than 25% of his time in meetings is a sign of a manager's mao organization and William H white jr. in his book the organization man described meetings as non-contributory labor that managers must endure but there is another way to regard meetings earlier I said but a big part of middle managers workers to supply information and know-how and to impart a sense of the preferred method of handling things to the groups under her control and influence managers also make and help to make decisions both kinds of basic managerial tasks can only occur during face-to-face encounters and therefore only during meetings thus I assert that meetings are 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 the two basic managerial roles of sharing information and making decisions produce two basic kinds of meetings in the first kind of meeting called a process-oriented meeting knowledge is shared and information is exchanged such meetings take place on a regularly scheduled basis the purpose of the second kind of meeting is to solve a specific problem meetings of this sort called mission oriented frequently produce a decision they are ad hoc Affairs not scheduled one in advance because they usually can't be here's how to make the most of a process-oriented meeting to start with we should aim for regularity in this kind of meeting the people attending should know how the meeting is run what kinds of substantive matters are discussed and what is to be accomplished it should be designed to allow managers to batch transactions to use the same production set of time and effort to take care of many similar managerial tasks moreover given the regularity you and the others attending can begin to forecast the time required for the kinds of work to be done then a production control system can take shape which means that a scheduled meeting will have minimum impact on other things people are doing at Intel we use three kinds of process oriented meetings the one on one the staff meeting and the operation review a one on one at Intel is a meeting between the supervisor and the subordinate and it is the principal way their business relationship is maintained its main purpose is mutual teaching and exchange of information by talking about specific problems and situations the supervisors teach the subordinates skills and know-how and suggest ways to approach things at the same time the subordinates provide the supervisors with detailed information about what they are doing and what they are concerned about from what I can tell regularly scheduled one-on-ones are highly unusual outside of Intel when I ask a manager from another company about the practice I usually get them all no I don't need scheduled meetings with my supervisor or my subordinate I see him several times a day but there is an enormous difference between a casual encounter between a supervisor and a subordinate or even a meeting to resolve a specific problem and a one-on-one when Intel was a young company I realized that even though I was expected to supervise both engineering and manufacturing I knew very little about the company's first product line member 8 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 private lessons on memory design and manufacturing these took place by appointment and involve a teacher who was also a subordinate of mine preparing for each during the session the pupil supervisor me busily took notes trying to learn as intel grew the initial tone and spirit of such one-on-one endur'd and grew who should have one-on-ones in some situations supervisors should perhaps meet with all those who work under them from professionals to production operators but here I want to talk about one-on-ones between supervisors and each of the professionals who report to them directly how often should you have one-on-one or put another way how do you decide how often somebody needs such a meeting the answer is the job or task relevant maturity of each of your subordinates in other words how much experience do given subordinates have with the specific tasks at hand this is not the same as the experience they have in general or how old they are as we'll see later the most effective management style in a specific instance varies from very close to very loose supervision as the subordinates task maturity increases accordingly you should have one-on-ones frequently for example once a week with subordinates who are inexperienced in the specific situation and less frequently perhaps once every few weeks with experienced veterans now another consideration here is how quickly things change in a job area in marketing for example the pace may be so rapid that supervisors need to have frequent one-on-one is to keep throughout on what's happening but in a research environment life may be quieter and for a given level of task relevant maturity less frequent meetings may suffice how long should one-on-one meetings last there really is no answer to this but the subordinates must feel that there is enough time to broach and get into thorny issues look at it this way if you had a big problem that you wanted to kick around with your supervisor the person whose professional interests in the matter is second old lady yours would you want to bring it up in a meeting scheduled to last only 15 minutes you would not I feel that a one-on-one should last an hour at the minimum anything less in my experience tends to make subordinates confine themselves to simple things that can be handled quickly now where should a one-on-one meeting take place in the supervisors office in the subordinates office or somewhere else I think you should have the meetings in or near the subordinates work area if possible a supervisor can learn a lot simply by going to the subordinates office he organized or not does he repeatedly have to spend time looking for documents he wants does he get interrupted all the time does he never get interrupted and in general how does he approach his work as the subordinate a key point about one-on-one meetings they should be regarded as the subordinates meetings with agendas and tone set by them there's good reason for this somebody needs to prepare for the meeting supervisors with eight subordinates would have to prepare eight times the subordinate only once so the subordinate should be asked to prepare an outline this is very important because it forces him to think through in advance all of the issues and points he plans to raise moreover with an outline the supervisor knows of the outset what is to be covered outlines also provide a framework for supporting information which the subordinate should prepare in advance the subordinate should then walk the supervisor through all the material what should be covered in a one-on-one meeting we can start with performance figures indicators used by the subordinate such as incoming order rates production output project status emphasis should be on indicators that signal trouble the meeting should also cover anything important that has happened since the last meeting current hiring problems people problems in general organizational problems and future plans and very very important potential problems even 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 these are often obscure and take time to surface consider and resolve what is the role of a supervisor in one-on-one meetings he should facilitate the subordinates expression of what's going on and what's bothering him the supervisor is there to learn and the coach Peter Drucker sums up the supervisors job here very nicely saying the good time users among managers do not talk to their subordinates about the managers problems but they know how to make the subordinates talk about the subordinates problems how is this done by applying groves principle of didactic management which is ask one more question when a supervisor thinks a subordinate has said all that he wants to say about a subject she should ask another question she should try to keep the flow of thoughts coming by prompting a subordinate with queries until both feel satisfied that they have gotten to the bottom of a problem I'd like to suggest some mechanical hints for effective one-on-one meetings first both the supervisor and the subordinate should have a copy of the outline and both should take note sauna which serves a number of purposes I take notes in just about all circumstances and most often end up never looking at them again I do it to keep my mind from drifting and also to help me to just the information I hear and see since I take notes in outline form I am forced to categorize the information logically which helps me to absorb it equally important is what writing it down symbolizes many issues in one-on-ones lead to action required on the part of a subordinate when he takes notes immediately following the supervisor suggestions the act implies a commitment like a handshake that something will be done the supervisor also having taken notes can then follow up for the next one-on-one a real time-saver is using a hold file where both supervisors and subordinates are cumulate important but not altogether urgent issues for discussion at the next meeting this kind of file applies the production principle of batching and saves time for everyone involved by minimizing the need for ad hoc contact like phone calls drop-in visits and so on which constitute the interruptions we considered earlier supervisors should also encourage the discussion of heart-to-heart issues during one-on-one because this is the perfect forum for getting at subtle and deep work-related problems affecting subordinates are they satisfied with their own performances to some frustration or obstacle gnaw at them do they have doubts about where they are going but supervisors 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 your 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 long-distance telephone one-on-ones have become necessary because many organizations are now spread out geographically but these can work well enough with proper preparation and attention exchanging notes after the meeting is a way to make sure each knows what the other are committed to one-on-ones should be scheduled on a rolling basis setting up the next one as the meeting taking place and other commitments can thereby be taken into account and cancellations avoided what is the leverage of the one-on-one let's say you have a one-on-one with your subordinate every two weeks and it lasts one and a half hours 90 minutes of your time can enhance the quality of your subordinates work for two weeks or for some 80 plus hours and also upgrade your understanding of what he's doing clearly one-on-ones can exert enormous leverage this happens through the development of a common base of information and similar ways of doing and handling things between a supervisor and a subordinate and this is the only way in which efficient and effective delegation can take place at the same time the subordinates teach the supervisors and what is learned is absolutely essential if supervisors are to make good decisions during a recent one-on-one meeting my subordinate who is responsible for Intel 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 even though the summer is typically slow he proved to me that what was going on was not just seasonal after we pondered the data for a while and considered their relationship to other indicators of business activity in our industry 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 no small matter after he shared 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 this one on produced substantial leverage the Intel sales manager affected all the other managers who reported to me to to grass a bit I also think that one-on-ones at home can help family life as the father of two teenage daughters I have found that the conversation in such a time together is very different in tone and kind from what we say to each other in other circumstances the one-on-one makes each of us take the other seriously and allow subtle and complicated matters to come up for discussion obviously no notes are taken as father and daughter usually go out for dinner at a restaurant but a family one on one very much resembles a business one on one I strongly recommend both practices staff meetings are another kind of process-oriented meeting where knowledge is shared and information is exchanged a staff meeting is one in which a supervisor and all of his or her subordinates participate it presents an opportunity for interaction among peers now pure interaction is not easy yet it is key to good management the approach to decision-making but I'll advocate later depends on a group of peers working well together by learning how this happens in staff meetings or a group of peers get to know each other and where the presence of a common supervisor helps pure interaction to develop managers will be prepared to be members of other working bodies based on peer groups staff meetings also create opportunities for supervisors to learn from the exchange and confrontation that often developed 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 my first experience with staff meetings dates back to my early professional years when I was the head of a small group of Engineers during semiconductor device research everyone in this group worked on an isolated aspect of a problem or on a different problem altogether I was supposed to be the supervisor but I found that others in the group were often more familiar with the work of another researcher than I was so a group discussion on any subject tended to get more detailed and more heated but always more rewarding than an exchange between me and one other specialist what should be discussed at a staff meeting anything that affects more than two of the people present if the meeting B 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 to 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 this is when a varied set of housekeeping matters can be disposed of as well as when important issues can be given a tentative first look what is the role of a supervisor in the staff meeting a leader observer expediter questioner decision maker the answer of course is all of them please note that lecturer is not listed a supervisor should never use staff meetings to pontificate or lecture people this is the surest way to undermine free discussion and the meetings basic purpose the supervisors most important roles are being a meetings moderator and facilitator and controller of its pace and thrust ideally the supervisor should keep things on track with the subordinates bearing the brunt of working the issues staff meetings are an ideal medium for decision making because the group of managers present has typically worked together for a long time the formal as well as informal authority of each individual has been well established and everybody knows who likes to spout off who tends to daydream and who knows what interesting stuff about the company a staff meeting is like the dinner table conversation of a family operation reviews are the third kind of process-oriented meeting they are a medium of interaction for people who don't otherwise have much opportunity to deal with one another the format here should include formal presentations in which managers describe their work to other managers who are not their immediate supervisors and to peers in other parts of the company the basic purpose of an operation review at Intel is to keep the teaching on learning going on between employees several organizational levels apart 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 supervisor and on their outside peers who are the players at an operation review the organising manager the reviewing manager the presenters and the audience each of these players has a distinct role to play if the review is to be a useful one each review is organized by a supervisor of the presenting managers these organizing managers 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 organising managers should also be in charge of housekeeping the meeting rooms visual materials invitations and so on finally they should be the timekeepers scheduling the presentations and keeping them moving along they should pace the presenters using inconspicuous gestures so that the managers talking don't suddenly find themselves out of time with only half their points covered the reviewing manager at each review is the senior supervisor at whom the review is aimed reviewing managers have a very important although more subtle role to play than the organizing managers they should ask questions make comments and in general impart the appropriate spirit to the meeting they are the catalysts needed to provoke audience participation and by their example they should encourage free expression they should never preview the material since that will keep them from reacting spontaneously because the senior supervisors are role models for the junior managers present they should take their roles of the review extremely seriously the people presenting the reviews should use visual aids to the extent possible people are endowed with eyes as well as ears and the simultaneous use of both definitely helps the audience understand the points being made but care must be taken because all too frequently presenters get so obsessed with getting through all of their visual material that the message gets lost even while all the charts get flipped as a rule of thumb I would recommend four minutes of presentation and discussion time per visual aid which can include tables numbers or graphics the presenters must highlight whatever they want to emphasize with a color pen or pointer throughout presenters have to watch their audiences like hawks facial expressions and body language among other things will tell them if the audience is getting the message if they need to stop and go over something again or if they are boring people and should speed up the audience that an operation review also has 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 presenters eyes yawn or read the newspaper it's worse than not being there at all lack of interest undermines the confidence of the presenter remember that you are spending a big part of your working day at the review make that time as variable for yourself and your organization as you can pay attention and jot down things you've heard that you might try ask questions if something is not clear to you and speak up if you can't go along with an approach being recommended and if a presenter makes a factual error it is your responsibility to go on record remember you are being paid to attend the meeting which is not meant to be a siesta in the midst of an otherwise busy day regard attendance at the meeting for what it is work this completes ID five of high-output management so far we've discussed the importance of process-oriented meetings on the next side our discussion will turn to the subject of the mission-oriented meetings you'll also hear a discussion of what Andrew Grove considers to be the ideal decision-making model please fast forward this to set to the end then turn it over to your side six [Music] [Music] [Music] welcome decide six of career tracks high output management in your job as a manager you are called upon to make decisions which range from the profound to the trivial from the complex to the very simple on this side you'll hear pertinent information on the decision-making process as we discuss andrew groves ideal decision-making model here is side six all the process oriented meetings i've been discussing our regularly scheduled affairs held to exchange knowledge and information the mission oriented meetings on the other hand is usually held ad-hoc and it is designed to produce a specific output frequently this output is a decision the key to success here is what the Chairman or chairperson or chair does very often no one is officially given that title but by whatever name one person usually has more at stake in the outcome of the meeting than others in fact it is usually the chairpersons or the de facto chairman who called these meetings and most of what they contribute should occur before it begins all too often they show up as if they were just ordinary attendees and hope that things will develop as they want when mission-oriented meetings fail to accomplish the purpose for which they were called the blame belongs to the chairpersons chair persons must have a clear understanding of the meetings objectives what needs to happen and what decisions have 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 answers aren't yes an estimate of the dollar cost of a manager's time including overhead is about $100 per hour so we're meeting in bra ten managers for two hours costs the company two thousand dollars most expenditures of two thousand dollars have to be approved in advance by senior people like buying a copying machine or making a transatlantic trip yet our manager can call a meeting and commit two thousand dollars worth of managerial resources at a rim so even if you're just an invited participant you should ask yourself if the meeting and your attendance is desirable and justified tell the person who invited you if you don't feel it is determine the purpose of a meeting before committing your time and your company's resources if a meeting makes no sense get it called off early have a low value-added stage and find a less costly way a one-on-one meeting a telephone call a note to pursue the matter let's assume this mission-oriented meeting has to be held and you are the chairperson what are your obligations the first one has to do with attendance as the chairperson 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 see to it that he or she sends a representative keep in mind that a meeting call 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 spectator sport because onlookers get in the way of what needs to be done as chairperson you are also responsible for maintaining discipline it is criminal to allow people to be late and waste everyone's time remember wasting time here really means that you are wasting the company's money with the meter ticking away at the rate of about $100 per hour per version do not worry about confronting the later iver just as you would not permit a fellow employee to steal a piece of office equipment worth $2,000 you should let anyone walk away with the time of your fellow managers finally as chairperson you're responsible for logistical matters you should for example make sure that all necessary and audio-visual equipment is present in the me room you should also send out an 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 this may sound like too much regimentation for you but whether it's that or needed discipline depends on your point of view if the chairperson forces you to show up at a meeting prepared and on time you might consider that person a drill sergeant but if you show up on time ready to work and someone else doesn't and isn't you'll probably be unhappy with the person responsible for wasting your time once the meeting is over you the chair person must nail down exactly what happened by sending out minutes that summarize the discussion that occurred the decision made and the actions to 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 you get the full benefit from what was done ideally managers should never have to call ad-hoc mission oriented meetings 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% of the problems and issues the remaining 20% will still have to be dealt with in mission oriented meetings remember Peter Drucker said that if people spend more than 25% of their time in meetings it is a sign of now organization I would put it another way the real sign of mal organization is when people spend more than 25% of their time in ad-hoc mission oriented meetings in addition to knowing how to exert managerial leverage and hold productive meetings managers must be able to participate fully in the decision-making process decisions range the profound after the trivial from the complex to the very simple should we buy a building or should release it should we hire this person or that one should we give someone a seven percent or a twelve percent raise can we appeal this case on the basis of regulation 939 of the Internal Revenue Code should we serve free drinks at our departmental Christmas party in traditional industries where the management chain of command was precisely defined a person making a certain kind of decision was a person occupying a particular position in the organization chart authority went with responsibility however in businesses that mostly deal with information and know-how managers have to cope with a new phenomenon here a divergence rapidly develops between power based on position and power based on knowledge for example when someone graduates from college with a technical education at that time and for the next several years that young person will be fully up to date in the technology of the time and he'll possess 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 he is not now the technical expert he was when he joined the company and Intel anyway we managers get a little more obsolete every day so a business like ours has to employ a decision making process unlike those used in more conventional industries 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 the key to success for us is 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 here's my ideal decision-making model which describes how I think decision-making should work in a normal business the first stage should be free discussion in which all points of view and all aspects 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 usually when a meeting gets heated most participants hang back trying to sense the direction of things saying nothing until they see what view is likely to prevail then they throw their support behind that view to avoid being associated with a losing position bizarre as it may seem some organizations actually encourage such behavior in a news report about the rules of a certain American automobile company an employee of the company is quoted as saying in the meeting in which I was informed that I was released I was told built 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 than it could have been otherwise that's free discussion the first stage the next stage is reaching a clear decision again migrator the disagreement about the issue the more important becomes the word clear in fact particular pain should be taken to frame the terms of the decision with utter clarity again our tendency is to do just the opposite when we know what decision is controversial we rather obscure matters to avoid an argument but the argument is not avoided it is merely postponed people who don't like a decision will be a lot matter if they don't get a prompt and straight story about it so much for clear decision the second stage in our three stage setup finally everyone involved must give the decision reached by the group full support this does not necessarily mean agreement so long as the participants commit to back to the decision that is a satisfactory outcome no matter how much time we may spend trying to forge agreement we just won't be able to get it on many issues but an organization does not live by its members agreeing with one another at all times about everything it lives instead by people committing to support the decisions and the moves of the business all managers can expect is that the commitment to support is honestly present and this is something they can and must get from everyone this ideal decision-making model seems an easy one to follow yet I have found that it comes easily to only two classes of professional employees senior managers who have been in the company for a long time who feel at home with the way things are done and who identify with the values of the organization and the new graduates that we hire because they use the model of students during college work for middle managers the decision-making model is easier to accept intellectually than it is to practice why because they often have trouble expressing their views forcefully a hard time making unpleasant or difficult decisions and an even harder time with the idea that they are expected to support a decision with which they don't agree silk the logic of this ideal model will eventually win everyone over another desirable and important feature of the model is that any decision should be worked out and reached at the lowest competent level it should be made by people who are closest to the situation and know the most about it and by no I don't just mean understand technically that kind of understanding must be tempered with judgment and judgment is developed through experience and learning from the many errors one has made in one's career thus ideally decision-making should occur in the middle ground between reliance on technical knowledge on the one hand and reliance on the bruises one has received from having tried to implement and apply such knowledge on the other if you can't find people with both qualities you should aim to get the best possible mix of participants available for experience 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 status differences a journalist puzzled by our management style once asked me mister drove isn't your company's emphasis on visible signs of egalitarianism such as informal dress partitions instead of offices and the absence of other obvious perch like reserved parking spaces just so much affectation my answer was that this is not a vacation but a matter of survival 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 is to get good decisions we can't succeed in our industry now status symbols most certainly do not promote the flow of ideas facts and puns review what appears to be a matter of style really as a matter of necessity I mentioned that it's difficult for middle managers to practice this model it can also be hard to implement because anybody who makes a business decision also possesses emotions such as pride ambition fear and insecurity the most common problem is something we call the peer group syndrome a number of years ago at Intel's very first management training session we tried some role-playing to show people what can occur when a group of peers meets to solve a problem or make a decision we said that people are on the table to tackle what was then a live issue for them in their real jobs everyone was an organizational equal the chairperson of the meeting was one level higher but was purposely sent out of a room so he couldn't hear what was to happen observers in the audience couldn't believe their arse and ears as the mock meeting proceeded the managers working on the problem did nothing but go around in circles for some 15 minutes and none of them noticed they weren't getting anywhere when the chairperson was brought back in he sat down and listened for a while and couldn't believe things either we watched him lean forward as if he were trying to glean more from the conversation we then saw a black cloud form over his head finally he slapped the table and exclaimed what's going on here you people are talking in circles in getting nowhere after the chairperson intervened the problem was resolved in very short order we named this the peer plus one approach and we have used it citizen to aid decision-making where we must peers tend to look for a more senior manager even if that manager 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 John and Intel software engineer says 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 consequently the group is a whole waters around for a while feeling each other out waiting for a consensus to develop before anyone risks taking a position if and when a group consensus images one of the members will state it as a group opinion I think our position seems to be not as a personal position after a weak statement of the group position if the rest of the mob dies in the position becomes more solid and is restated more forcefully note the difference between the situation described earlier by the auto executive and the one John described in the former instance the people were expected to wait for their supervisor to state his opinion first in the latter members of the group were waiting for a consensus to develop the dynamics are different but the bottom line in both is that people didn't really speak their minds freely that certainly makes it harder for managers 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 but in the end self-confidence mostly comes from a gut level realization that 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 manifests itself and the meeting has no formal chairperson the person who has the most at stake should take charge if that doesn't work once I'll address the senior person present to assume control one thing that paralyzes both knowledge and position power possessors is the fear of simply sounding dumb so the senior person may not ask the questions that should be asked and the same fear will make other participants think their thoughts privately rather than say them out loud for all to hear at best they will whisper what they have 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 a related phenomenon influences lower-level people present in the meeting this group the lower-level group has to overcome the fear of being overruled which might mean embarrassment this even more than fear of sanctions or even a bilasa job makes junior people hang back and let the more senior people set the likely direction of decision-making but some issues are so complex that those called on to make a decision honestly aren't really sure how they feel when knowledge power and position power are separated the sense of uncertainty can become especially acute because the knowledge people are often not calm with securely business-related factors that might influence a decision what is often heard is we don't know what the company wants of us similarly managers holding position power don't know what to do because they realize they don't know enough about the technical details to arrive at the correct decision we must strive not to be done in by such obstacles we are all human beings endowed with intelligence and blessed with real power both can be drawn upon to help us overcome our fear of sounding dumb or of being overruled and lead us to initiate discussion and come out front with a stand sometimes no amount of discussion will produce a consensus yet the time for a decision has clearly arrived when this happens the senior person or pureplus one who until now has guided coached and prodded the group along has no choice but to make a decision personally if the decision-making process is proceeded correctly up to this point the senior manager will be making the decision having had the full benefit of free discussion where all points of view facts opinions and judgments were aired this is often not easy we Americans tend to be reluctant to exercise position power deliberately and explicitly it is just not nice to give orders such reluctance on the part of the senior manager can prolong the first phase of the decision-making process the time of free discussion past the optimum point and the decision will be put off if you either 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 the meeting but if you feel that you have already heard everything but all sides of the issue have been raised it is time to push for a consensus and failing that to step in and make a decision like other things managers do decision-making has an output associated with it which in this case is the decision itself like other managerial processes decision-making is likely or to generate high-quality output in a timely fashion if we say clearly at the outset that we expect exactly that in other words one of the managers key tasks is to settle six important questions in advance these questions are what decision needs to be made when does it have to be made who will decide who will need to be consulted prior to making the decision who will ratify or veto the decision who will need to be informed of the decision let me illustrate how these six questions came into play in a recent decision I was involved in Intel at already decided to expand its Philippine manufacturing plant roughly doubling its capacity the next question was square only limited space was available next to the existing plant but other things being equal building there was the most desirable thing to do because overhead and communications could be shared transportation costs between the two plants would amount to virtually nothing and our employees could be transferred from one plant to the other very easily the alternative consisted of buying a less expensive bottled land right some distance away the land would be not only cheaper but more plentiful which would allow us to build a relatively inexpensive one or two storey building buying the lot near the existing plants meant that we would have had to build a high-rise to get the amount of floor space we needed and the high rise semiconductor manufacturing plant would not be the most efficient that made us hesitate but it would be nice to have a second building next to the one we already own back and forth let the discussion let's apply our six questions here it was clear what decision needed to be made we either build a low distorted building next to our existing plant or we build a one or two storey building at a new outlying location as for the question when according to our long-range plans we needed the new plant in two to two-and-a-half years after we applied time offsets we found that we had to make a decision within a month this answered the Webb crew will decide our facilities construction people or the Intel group that manages the manufacturing plants the answer wasn't easy the facility's construction people were sensitive for matters pertaining to the costs and difficulties of construction and would probably mean toward the new location the plant management group knowing that operational benefits would come from having the two plants side-by-side would probably opt for the high-rise so the decision making body was composed of our construction manager for our Far East locations his supervisor the construction manager for the corporation the manager of the Far East manufacturing plant Network and his supervisor the senior manufacturing manager the meeting gave us parallel levels of managers from the two organizations the sensitivities of two interest groups coming to bear on a single decision is quite common in real corporate life in such meetings it is important to give to the two sides roughly equal representation because only from such balance will an even-handed decision emerge all of these individuals have consulted their staffs prior to the decision and gathered all relevant knowledge and views on the subject who will ratify or veto the decision the first common person to whom the senior managers of both organizations reported was myself also this was a big enough deal that the president of the company should be involved moreover I was somewhat familiar with the locations in the Philippines and how a plant like the one we have there operates so I was chosen as the person to veto or ratify the decision of the meeting who will need to be informed of the decision our chose Gordon Moore our chairman of the board he's not directly involved with manufacturing plants like the one contemplated but we don't build a new one in the Far East every day so he should know about what happened this is how the decision was made after studying Maps construction plans and costs land costs and traffic patterns and considering several times everything we thought was important the group decided to build next to our existing plan but to accept only as much manufacturing area as four storeys would yield the cost would have escalated had we exceeded that this with all relevant background was presented to me at a mission oriented meeting I listened to the presentation of the alternatives the group considered and of the reasons why they preferred their choice to these and after asking a series of questions and probing both the group's information and its thinking process I ratified the decision subsequently I informed Gordon Moore of the outcome and as you are hearing this the plan is either under construction are already operating employing consistent ways to make decisions as value beyond simply expediting the decision-making itself people invest a great deal of energy and emotion in coming up with a decision and somebody who has an important say-so or the right to veto it may come across the decision later if he does veto it he can be regarded as a johnny-come-lately who upsets the decision-making applecart this of course will frustrate and demoralize the people who may have been working on it for a long time if the veto comes as a surprise however legitimate it may have been on its merits an impression of political maneuvering is inevitably created politics and manipulation or even their appearance should be avoided at all costs and I can think of no better way to make the decision-making process straightforward than to apply it before the fact the structure imposed by our six questions one last thing if your final word has to be dramatically different from the expectations of the people who participated in the decision-making process make your announcement but don't just walk away from the issue people need time to adjust rationalized and in general put their heads back together adjourn reconvene the meeting after people have had a chance to recover and solicit their views of the decision at that time this will help everybody accept and learn to live with the unexpected if good decision-making appears complicated that's because it is and has been for a long time let me quote from Alfred Sloan the General Motors president who spent a lifetime preoccupied with decision making Alfred Sloan said this 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 or burdensome people sometimes try to run away from it a middle manager I once knew came to a strait from one of the better business schools and possessed what we might call a John Wayne mentality having become frustrated with the way Intel made decisions he quit he joined the company where his employers are shortened during the interview the people were encouraged to make individual decisions which they were then free to implement four months later he safet seferovic dissertation titles Pleasantville campus.