High Output Management Principles in the Digital Age

Applying high output management principles in the digital age is crucial in our changing world. The internet has disrupted every major industry and changed the way every company operates. The philosophy Andy Grove wrote about in 1983 was based on his time leading Intel. At the time, Intel was a leader in the tech sector producing microprocessors used in computer hardware.

Andy Grove published High Output Management 36 years ago. Since then, the internet has infiltrated every facet of our lives and changed the way we work. In the digital age management, principles have to adapt to remote workers and a plethora of communication platforms. Yet, the core principles Grove laid out adapt to our modern workplace.

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What do high output management principles in the digital age look like?

The principles that Grove outlined focus on understanding the basics of production, management’s core duties, cross-functional teams, and individual performance. While the principles remain the same, automation replaces the formerly human led activities. The shift towards technology and the proliferation of the internet merely amplify organizations work. It remains crucial to understand the basics of production whether you work in a restaurant, software company, or services firm. You have to understand the key inputs and time to implement for those inputs to be effective.

Why are high output management principles important?

The shift towards technology and the proliferation of the internet merely amplify organizations work. Understanding the basics of production for your business regardless of the industry is crucial. You have to understand the key inputs and timing for those inputs to be effective.

As the speed of everything has increased with technology, consumers demands raise the stakes for speed and accuracy. This means that the people in your company have even greater leverage and responsibility making their productivity even more valuable. Due to this automation, a sales rep can reach thousands of potential customers with a few clicks. With this greater reach creates opportunities for great communications to have a positive compounding effect.

On the flipside, negative outcomes are also amplified with the advent of technology. Wells Fargo’s perverse incentive program led to bad behavior. Employees were easily able to create new accounts and charge customers fees without their consent. Perverse incentives and the greater leverage people have can quickly ruin a company’s business and reputation with its customers.

Thus the stakes are now higher than ever to adopt the high output management principles in the digital age.

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How do you apply high these principles to your business?

The good news is it is not harder to implement high output management principles in the digital age. Still applicable today are the four overarching ideas that Grove laid out in 1983.

The Breakfast Factory

First and foremost is understanding your production process. Grove uses the example of a breakfast restaurant and of having a 3-minute egg as the core of the breakfast. When looking at your own business think about what has to happen between the order and a satisfied customer. Ask yourself what are the inputs meaning raw materials, information, and what activities/effort must happen to create the desired output?

Once you understand what raw materials and activities that need to be done, think about the outputs. What is the desired output for your business? In the breakfast factory example, it may be the perfect egg with other sides to round out the meal. Identify what ‘good’ looks like.

Next, determine key indicators that you can measure and track throughout the production process. What are the key indicators that will help you predict if your inputs will equal your desired output?

Lastly, is checking for quality. You may have to start over if you only test quality at the end of production. How can you create regular checkpoints to ensure quality?

Financial Glass - High Output Management Principles Time

Management is a Team Game

In implementing, the fourth broad idea of high output management is management. The first struggle, which is still common today, is understanding the desired managerial output. It’s not just having lots of meetings and checking boxes with employees. Truly defining the key output is the first step. Next, is the methods of delivery through meetings. There are all types of meetings from process-oriented meetings, 1:1s with subordinates, staff meetings, operational reviews, and mission-oriented meetings. Each type of meeting is a manager’s tool.

The good news is in the digital age there are many modes of conducting meetings. With more distributed workforces face-to-face meetings often become impractical. When you use video conferencing ensure that everyone is aligned on the purpose of each meeting. Great managerial work involved clearly defined meetings.

The next principle is the decision making process. Technology either enables or hinders decision making which is why you must define your ideal process. The ideal decision-making process is simple. The three steps are free discussion, making a clear decision, and getting full support.

Lastly, when it comes to management is planning. You must continue to execute today while planning for the future state of work. In the fast moving business environment, things move quicker than in the past and you must be able to adapt. Staying aware of the current environment while looking at the future of your business is vital to long-term success.

Team of Teams

Hybrid roles and organizations are a part of the way businesses operate in today’s more complex business environment. High output management principles in the digital age focus on reporting structures that bridge business units and roles. In the startup environment, this is a natural phenomenon as limited resources require that people take on multiple roles. Cross-functional roles must have clear lines of whom they report to and their goals.

The Players

In today’s tight labor market and unemployment at near record lows, the people in your organization are its greatest assets. Being able to understand your people and keep them motivated is crucial. The art of motivating people is an ever complex and evolving task. It continues to get increasingly difficult with the advent of technology, distractions, and a multitude of opportunities. High output management in the digital age must focus on your people. Understand what motivates them and recognize their motivation will change over time.

Performance reviews are just as crucial today as they were in the past. The immediacy of feedback and iteration of improvement happens more frequently in the digital age. You have more opportunities to deliver feedback and praise. Ultimately these performance reviews should encapsulate and build on the more frequent feedback you provide. These formal performance reviews are crucial to help clarify, motivate, and record employees performance.

Interviewing, quitting, and training are all the boss’s job. Hiring is not a task you want to overlook. The folks you hire will become a part of your organization and influence the culture you are creating. In the digital age, it is easy to outsource or use tools to suggest candidates. It is well worth the expense to ensure a cultural fit. Additionally, when a valued employee decides to quit you have a very short window to understand why. You must be willing to immediately focus time showing you care and hopefully save from losing a valued team member.

Lastly, the boss must conduct training and spend time with new employees. You want to instill the right behaviors and ensure you are aligned.

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What will happen to your business if you apply high output management principles?

If you adopt the classic high output management principles to your business you will set yourself up for incredible success. The essence of the ideas is to focus on the most important aspects of your business. Understand those key pieces from production to management and organization structure to the people. Distilling down what is most important and using technology to enhance your ability to execute will create a stellar combination.

Final takeaways

The classic high output management principles that Grove laid out 36 years ago are just as applicable today. The digital age has brought new challenges and ways of doing business, yet the core foundation is still the same. Take time to analyze your own business and identify how you can apply these principles to your organization.

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