Output Management Quotes

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 absolute truth is that if you don’t know what you want, you won’t get it.

Let chaos reign, then rein in chaos.

there are only two ways for a manager to improve the output of an employee: motivation and training.

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.

My day always ends when I’m tired and ready to go home, not when I’m done. I am never done.

Remember that by saying “yes”—to projects, a course of action, or whatever—you are implicitly saying “no” to something else.

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.

Just as you would not permit a fellow employee to steal a piece of office equipment worth $2,000, you shouldn’t let anyone walk away with the time of his fellow managers.

Reports are more a medium of self-discipline than a way to communicate information. Writing the report is important; reading it often is not.

The idealized market was supposed to deliver ‘friction free’ exchanges, in which the desires of consumers would be met directly, without the need for intervention or mediation by regulatory agencies. Yet the drive to assess the performance of workers and to measure forms of labor which, by their nature, are resistant to quantification, has inevitably required additional layers of management and bureaucracy. What we have is not a direct comparison of workers’ performance or output, but a comparison between the audited representation of that performance and output. Inevitably, a short-circuiting occurs, and work becomes geared towards the generation and massaging of representations rather than to the official goals of the work itself. Indeed, an anthropological study of local government in Britain argues that ‘More effort goes into ensuring that a local authority’s services are represented correctly than goes into actually improving those services’. This reversal of priorities is one of the hallmarks of a system which can be characterized without hyperbole as ‘market Stalinism’. What late capitalism repeats from Stalinism is just this valuing of symbols of achievement over actual achievement. […] It would be a mistake to regard this market Stalinism as some deviation from the ‘true spirit’ of capitalism. On the contrary, it would be better to say that an essential dimension of Stalinism was inhibited by its association with a social project like socialism and can only emerge in a late capitalist culture in which images acquire an autonomous force. The way value is generated on the stock exchange depends of course less on what a company ‘really does’, and more on perceptions of, and beliefs about, its (future) performance. In capitalism, that is to say, all that is solid melts into PR, and late capitalism is defined at least as much by this ubiquitous tendency towards PR-production as it is by the imposition of market mechanisms.

[..] in the work of the soft professions, it becomes very difficult to distinguish between output and activity. And as noted, stressing output is the key to improving productivity, while looking to increase activity can result in just the opposite.

At Intel, we put ourselves through an annual strategic long-range planning effort in which we examine our future five years off. But what is really being influenced here? It is the next year—and only the next year.

When a person is not doing his job, there can only be two reasons for it. The person either can’t do it or won’t do it; he is either not capable or not motivated. To determine which, we can employ a simple mental test: if the person’s life depended on doing the work, could he do it? If the answer is yes, that person is not motivated; if the answer is no, he is not capable.

We must recognize that no amount of formal planning can anticipate changes such as globalization and the information revolution we’ve referred to above. Does that mean that you shouldn’t plan? Not at all. You need to plan the way a fire department plans. It cannot anticipate where the next fire will be, so it has to shape an energetic and efficient team that is capable of responding to the unanticipated as well as to any ordinary event.

The output of a manager is the output of the organizational units under his or her supervision or influence.

we confused the manager’s general competence and maturity with his task-relevant maturity.

delegation without follow-through is abdication.

One way to improve efficiency is to streamline processes according to schedules, required inputs and expected outputs.

What leads people to do great work? It feels like a complicated question but it really isn’t, as Andy Grove points out in his classic High Output Management. He flips the question around and asks: What gets in the way of good work? There are only two possibilities. The first is that people don’t know how to do good work. The second is that they know how, but they aren’t motivated.

The old saying has it that when we promote our best salesman and make him a manager, we ruin a good salesman and get a bad manager. But if we think about it, we see we have no choice but to promote the good salesman. Should our worst salesman get the job? When we promote our best, we are saying to our subordinates that performance is what counts.

Once someone’s source of motivation is self-actualization, his drive to perform has no limit. Thus, its most important characteristic is that unlike other sources of motivation, which extinguish themselves after the needs are fulfilled, self-actualization continues to motivate people to ever higher levels of performance.

Are you trying new ideas, new techniques, and new technologies, and I mean personally trying them, not just reading about them? Or are you waiting for others to figure out how they can re-engineer your workplace—and you out of that workplace?

To get acceptable quality at the lowest cost, it is vitally important to reject defective material at a stage where its accumulated value is at the lowest possible level. Thus, as noted, we are better off catching a bad raw egg than a cooked one, and screening out our college applicant before he visits Intel. In short, reject before investing further value.

The key to survival is to learn to add more value—and

An organization’s capabilities reside in two places. The first is in its processes—the methods by which people have learned to transform inputs of labor, energy, materials, information, cash, and technology into outputs of higher value. The second is in the organization’s values, which are the criteria that managers and employees in the organization use when making prioritization decisions.

The value system at Intel is completely the reverse. The Ph.D. in computer science who knows an answer in the abstract, yet does not apply it to create some tangible output, gets little recognition, but a junior engineer who produces results is highly valued and esteemed. And that is how it should be.

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

The single most important task of a manager is to elicit peak performance from his subordinates. So if two things limit high output, a manager has two ways to tackle the issue: through training and motivation.

Decisions decides your output

So even if you’re just an invited participant, you should ask yourself if the meeting—and your attendance—is desirable and justified.

Values and behavioral norms are simply not transmitted easily by talk or memo, but are conveyed very effectively by doing and doing visibly.

if your organization uses e-mail, a lot more people know what’s going on in your business than did before, and they know it a lot faster than they used to.

A manager’s output = The output of his organization + The output of the neighboring organizations under his influence

A poor performer has a strong tendency to ignore his problem.

You cannot stay in the self-actualized mode if you’re always worried about failure.

All production flows have a basic characteristic: the material becomes more valuable as it moves through the process.

A common rule we should always try to heed is to detect and fix any problem in a production process at the lowest-value stage possible.

if we want to cultivate achievement-driven motivation, we need to create an environment that values and emphasizes output.

High managerial productivity, I argue, depends largely on choosing to perform tasks that possess high leverage.

So in the end careful interviewing doesn’t guarantee you anything, it merely increases your odds of getting lucky.

Keep in mind that a meeting called to make a specific decision is hard to keep moving if more than six or seven people attend. Eight people should be the absolute cutoff.

When the need to stretch is not spontaneous, management needs to create an environment to foster it.

Adapt or die. Some

What is your realistic output today? Some days, you just don’t have enough gas in the tank, and as much as you’re able, honor that.

Yet the drive to assess the performance of workers and to measure forms of labor which, by their nature, are resistant to quantification, has inevitably required additional layers of management and bureaucracy. What we have is not a direct comparison of workers’ performance or output, but a comparison between the audited representation of that performance and output. Inevitably, a short-circuiting occurs, and work becomes geared towards the generation and massaging of representations rather than to the official goals of the work itself.

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 enhance productivity.

There are people who are highly capable and dazzle with insights, strategic thinking and knowledge, but at times they leave you exasperated by their lack of output and their inability to get things done and manage complexity. These are the people who are often labelled as high potential, but are yet to fire fully. They possess a high-quality algorithm but are poor on productivity.

What is the role of the supervisor in a one-on-one? He should facilitate the subordinate’s expression of what’s going on and what’s bothering him. The supervisor is there to learn and to coach.

Middle managers are the muscle and bone of every sizable organization, no matter how loose or “flattened” the hierarchy, but they are largely ignored despite their immense importance to our society and economy.

many ExOs are adopting the Objectives and Key Results (OKR) method. Invented at Intel by CEO Andy Grove and brought to Google by venture capitalist John Doerr in 1999, OKR tracks individual, team and company goals and outcomes in an open and transparent way. In High Output Management, Grove’s highly regarded manual, he introduced OKRs as the answer to two simple questions: Where do I want to go? (Objectives) How will I know I’m getting there? (Key Results to ensure progress is made)

you have to accept that no matter where you work, you are not an employee—you are in a business with one employee: yourself. You are in competition with millions of similar businesses. There are millions of others all over the world, picking up the pace, capable of doing the same work that you can do and perhaps more eager to do it. Now, you may be tempted to look around your workplace and point to your fellow workers as rivals, but they are not. They are outnumbered—a thousand to one, one hundred thousand to one, a million to one—by people who work for organizations that compete with your firm. So if you want to work and continue to work, you must continually dedicate yourself to retaining your individual competitive advantage.

you can learn how to focus on and fully execute your vision through any resistance, how to capture new ideas and act on them in a manageable way. That way, you can tackle them methodically, one at a time. The scale of the output that follows will be breathtaking.

As a rule of thumb, a manager whose work is largely supervisory should have six to eight subordinates; three or four are too few and ten are too many. This range comes from a guideline that a manager should allocate about a half day per week to each of his subordinates.

An excerpt from “Recess Theory,” by Axelrod MacMurray: We need to be happy in order to be productive. We need to push the boundaries of the workplace and allow adults to tap into their inner child in order to maximize success and innovation. It is important for the adult employee to be given time to be social in an unstructured and creative way during the work day and it is incumbent upon managers to foster this. The focus of the play should not have a goal. Used properly in the workplace, an hour of playtime will ultimately increase your output exponentially.

The customer is also at the center of how we analyze and manage performance metrics. Our emphasis is on what we call controllable input metrics, rather than output metrics. Controllable input metrics (e.g., reducing internal costs so you can affordably lower product prices, adding new items for sale on the website, or reducing standard delivery time) measure the set of activities that, if done well, will yield the desired results, or output metrics (such as monthly revenue and stock price). We detail these metrics as well as how to discover and track them in chapter six.

email, that ingenious twentieth-century invention whereby any random person on the planet can pester you, at any time they like, and at almost no cost to themselves, by means of a digital window that sits inches from your nose, or in your pocket, throughout your working day, and often on weekends, too. The “input” side of this arrangement—the number of emails that you could, in principle, receive—is essentially infinite. But the “output” side—the number of messages you’ll have time to read properly, reply to, or just make a considered decision to delete—is strictly finite.

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. Obviously, you measure a salesman by the orders he gets (output), not by the calls he makes (activity).

To implement the actual simplification, you must question why each step is performed. Typically, you will find that many steps exist in your work flow for no good reason. Often they are there by tradition or because formal procedure ordains it, and nothing practical requires their inclusion.

your task is to find the most cost-effective way to deploy your resources—the key to optimizing all types of productive work. Bear in mind that in this and in other such situations there is a right answer, the one that can give you the best delivery time and product quality at the lowest possible cost.

A project life cycle represents the highest-level project management approach, depicted as a series of periods and phases, each with a defined output. A project life cycle can be documented with a methodology, which is a system of practices, techniques, procedures, and rules used by those who work in a discipline.

In his entire output, I can find only one piece of genuine unfairness: a thuggish attack on the poetry of WH Auden, whom he regarded as a dupe of the Communist Party. But even this was softened in some later essays. The truth is that he disliked Auden's homosexuality, and could not get over his prejudice. But much of the interest of Orwell lies in the fact that he was born prejudiced, so to speak, against Jews and the coloured peoples of the empire, and against the poor and uneducated, and against women and intellectuals—and managed, in a transparent and unique way, to educate himself out of this fog of bigotry (though he never did get over his aversion to 'pansies').

When I first became a manager, I had mixed feelings about training. Logically, training for high-tech companies made sense, but my personal experience with training programs at the companies where I had worked was underwhelming. The courses were taught by outside firms who didn’t really understand our business and were teaching things that weren’t relevant. Then I read chapter 16 of Andy Grove’s management classic, High Output Management, titled “Why Training Is the Boss’s Job,” and it changed my career. Grove wrote, “Most managers seem to feel that training employees is a job that should be left to others. I, on the other hand, strongly believe that the manager should do it himself.

Publishers, theatrical managers, and critics ask not for the quality inherent in creative art, but will it meet with a good sale, will it suit the palate of the people? Alas, this palate is like a dumping ground; it relishes anything that needs no mental mastication. As a result, the mediocre, the ordinary, the commonplace represents the chief literary output.

In general, meddling stems from a supervisor exploiting too much superior work knowledge (real or imagined). The negative leverage produced comes from the fact that after being exposed to many such instances, the subordinate will begin to take a much more restricted view of what is expected of him, showing less initiative in solving his own problems and referring them instead to his supervisor.

Monitoring the results of delegation resembles the monitoring used in quality assurance. We should apply quality assurance principles and monitor at the lowest-added-value stage of the process. For example, review rough drafts of reports that you have delegated; don’t wait until your subordinates have spent time polishing them into final form before you find out that you have a basic problem with the contents.

Dan Yakir is a scientist at the Weizmann Institute who manages the FluxNet research station at Yatir. He says that the forest not only demonstrates that trees can thrive in areas that most people would call desert, but that planting forests on just 12 percent of the world’s semi-arid lands could reduce atmospheric carbon by one gigaton a year—the annual CO2 output of about one thousand 500-megawatt coal plants. A

Enforce functional training by withholding new employee requisitions. As Andy Grove writes, there are only two ways for a manager to improve the output of an employee: motivation and training. Therefore, training should be the most basic requirement for all managers in your organization. An effective way to enforce this requirement is by withholding new employee requisitions from managers until they’ve developed a training program for the TBH, “To Be Hired.

Design for 80 percent and build separate paths for exceptions. Eliminate or reduce the impact of low-value steps. Simplify complex steps. Combine simple steps. Work to design quality into the work, rather than inspect step outputs after the fact. Use parallel paths wherever possible. Broaden job content and empower employees. Don’t design things to the task level unless the risk of variation is unacceptable and you’re willing to invest in testing prior to implementation.

JIT is a technique used to eliminate the waste of excess inventory. Parts and materials are “pulled” through the production process only as needed, rather than “pushed” out onto the production floor in large quantities. Accountants justifiably see inventory as an asset because it represents an investment by the company. From a JIT perspective, however, it is an avoidable cost that must be minimized. Any costs that do not contribute to the value of the output are to be eliminated.

Eliciting peak performance means going up against something or somebody. Let me give you a simple example. For years the performance of the Intel facilities maintenance group, which is responsible for keeping our buildings clean and neat, was mediocre, and no amount of pressure or inducement seemed to do any good. We then initiated a program in which each building’s upkeep was periodically scored by a resident senior manager, dubbed a “building czar.” The score was then compared with those given the other buildings. The condition of all of them dramatically improved almost immediately. Nothing else was done; people did not get more money or other rewards. What they did get was a racetrack, an arena of competition. If your work is facilities maintenance, having your building receive the top score is a powerful source of motivation. This is key to the manager’s approach and involvement: he has to see the work as it is seen by the people who do that work every day and then create indicators so that his subordinates can watch their “racetrack” take shape.

a big part of a middle manager’s work is to supply information and know-how, and to impart a sense of the preferred method of handling things to the groups under his control and influence. A manager also makes and helps to make decisions. Both kinds of basic managerial tasks can only occur during face-to-face encounters, and therefore only during meetings. Thus I will assert again that a meeting is nothing less than the medium through which managerial work is performed. That means we should not be fighting their very existence, but rather using the time spent in them as efficiently as possible. The

Let’s say there was a wrist-mounted meter that could measure energy output during dancing and the goal was to give off an energy level of 1,000 units. Or someone would (say) kill you. And you had a notion of how you wanted to dance, but when you danced that way, your energy level was down around 50. And when you finally managed to get your energy level above 1,000, you glanced up at a mirror (there’s a mirror in there, wherever you’re dancing off death) and—wow. Is that dancing? Is that me dancing? Good God. But your energy level is at 1,200 and climbing. What would you do? You’d keep dancing like that.

What is the actual link between material consumption and objective and subjective quality of life once the basic needs for food, clothes, shelter, and mobility are well satisfied? Going from material misery to modest material comfort will make many things in life better but, obviously, the link is not an endless escalator. But if so, where is the saturation point? Can such a level actually be quantified in a meaningful way? These questions must be asked even if there are no easy answers, mainly because of the situation that is the very opposite of the material poverty outlined at the beginning of this section: too many people live in the condition of material excess and this does not endow them with a higher physical quality of life than that enjoyed by moderate consumers and it does not make them exceptionally happy. At the most fundamental level, the question is about the very nature of modern economies. All but a tiny minority of economists (those of ecological persuasion) see the constant expansion of output as the fundamental goal. And not just any expansion: economies should preferably grow at annual rates in excess of 2%, better yet 3%. This is the only model, the only paradigm, and the only precept, as the economists in command of modern societies cannot envisage a system that would deliberately grow at a minimum rate, even less so one that would experience zero growth, and the idea of a carefully managed decline appears to them to be outright unimaginable. The pursuit of endless growth is, obviously, an unsustainable strategy (Binswanger, 2009), and the post-2008 experience has shown how dysfunctional modern economies become as soon as the growth becomes negligible, ceases temporarily or when there is even a slight decline: rising unemployment, falling labor participation, growing income inequality, and soaring budget deficits.

The mother is downloading emotion programs into the infant’s right brain. The child is using the output of the mother’s right hemisphere as a template for the imprinting, the hardwiring, of circuits in his own right hemisphere.”2 You’re even determining the size of his hippocampi3 (more development confers better learning, stress management, and mental health), anterior cingulate (emotional regulation), and amygdala (emotional reactivity). This early brain wiring influences happiness levels and mood later in life, because better wiring means a better ability to connect with others, regulate positive or negative emotions, and soothe ourselves.

But it was while discussing SpaceX’s grandest missions that Shotwell really came into her own and seemed to inspire the interns. Some of them clearly dreamed of becoming astronauts, and Shotwell said that working at SpaceX was almost certainly their best chance to get to space now that NASA’s astronaut corps had dwindled. Musk had made designing cool-looking, “non–Stay Puft” spacesuits a personal priority. “They can’t be clunky and nasty,” Shotwell said. “You have to do better than that.” As for where the astronauts would go: well, there were the space habitats, the moon, and, of course, Mars as options. SpaceX has already started testing a giant rocket, called the Falcon Heavy, that will take it much farther into space than the Falcon 9, and it has another, even larger spaceship on the way. “Our Falcon Heavy rocket will not take a busload of people to Mars,” she said. “So, there’s something after Heavy. We’re working on it.” To make something like that vehicle happen, she said, the SpaceX employees needed to be effective and pushy. “Make sure your output is high,” Shotwell said. “If we’re throwing a bunch of shit in your way, you need to be mouthy about it. That’s not a quality that’s widely accepted elsewhere, but it is at SpaceX.” And, if that sounded harsh, so be it. As Shotwell saw it, the commercial space race was coming down to SpaceX and China and that’s it. And in the bigger picture, the race was on to ensure man’s survival. “If you hate people and think human extinction is okay, then fuck it,” Shotwell said. “Don’t go to space. If you think it is worth humans doing some risk management and finding a second place to go live, then you should be focused on this issue and willing to spend some money. I am pretty sure we will be selected by NASA to drop landers and rovers off on Mars. Then the first SpaceX mission will be to drop off a bunch of supplies, so that once people get there, there will be places to live and food to eat and stuff for them to do.

The Objectives and Key Results (OKR) technique is a tool for management, focus, and alignment. As with any tool, there are many ways to use it. Here are the critical points for you to keep in mind when using the tool for product teams in product organizations. Objectives should be qualitative; key results need to be quantitative/measurable. Key results should be a measure of business results, not output or tasks. The rest of the company will use OKRs a bit differently, but for the product management, design, and technology organization, focus on the organization's objectives and the objectives for each product team, which are designed to roll up and achieve the organization's objectives. Don't let personal objectives or functional team objectives dilute or confuse the focus.

Two years later, DeepMind engineers used what they had learned from game playing to solve an economic problem of vital interest: How should Google optimize the management of its computer servers? The artificial neural network remained similar; the only things that changed were the inputs (date, time, weather, international events, search requests, number of people connected to each server, etc.), the outputs (turn on or off this or that server on various continents), and the reward function (consume less energy). The result was an instant drop in power consumption. Google reduced its energy bill by up to 40 percent and saved tens of millions of dollars—even after myriad specialized engineers had already tried to optimize those very servers. Artificial intelligence has truly reached levels of success that can turn whole industries upside down.

Constant communication is not something that gets in the way of real work; it has instead become totally intertwined in how this work actually gets done—preventing easy efforts to reduce distractions through better habits or short-lived management stunts like email-free Fridays. Real improvement, it became clear, would require fundamental change to how we organize our professional efforts. It also became clear that these changes can’t come too soon: whereas email overload emerged as a fashionable annoyance in the early 2000s, it has recently advanced into a much more serious problem, reaching a saturation point for many in which their actual productive output gets squeezed into the early morning, or evenings and weekends, while their workdays devolve into Sisyphean battles against their inboxes—a uniquely misery-inducing approach to getting things done.

The quality of our thinking is largely influenced by the mental models in our heads. While we want accurate models, we also want a wide variety of models to uncover what’s really happening. The key here is variety. Most of us study something specific and don’t get exposure to the big ideas of other disciplines. We don’t develop the multidisciplinary mindset that we need to accurately see a problem. And because we don’t have the right models to understand the situation, we overuse the models we do have and use them even when they don’t belong. You’ve likely experienced this first hand. An engineer will often think in terms of systems by default. A psychologist will think in terms of incentives. A business person might think in terms of opportunity cost and risk-reward. Through their disciplines, each of these people sees part of the situation, the part of the world that makes sense to them. None of them, however, see the entire situation unless they are thinking in a multidisciplinary way. In short, they have blind spots. Big blind spots. And they’re not aware of their blind spots. [...] Relying on only a few models is like having a 400-horsepower brain that’s only generating 50 horsepower of output. To increase your mental efficiency and reach your 400-horsepower potential, you need to use a latticework of mental models. Exactly the same sort of pattern that graces backyards everywhere, a lattice is a series of points that connect to and reinforce each other. The Great Models can be understood in the same way—models influence and interact with each other to create a structure that can be used to evaluate and understand ideas. [...] Without a latticework of the Great Models our decisions become harder, slower, and less creative. But by using a mental models approach, we can complement our specializations by being curious about how the rest of the world works. A quick glance at the Nobel Prize winners list show that many of them, obviously extreme specialists in something, had multidisciplinary interests that supported their achievements. [...] The more high-quality mental models you have in your mental toolbox, the more likely you will have the ones needed to understand the problem. And understanding is everything. The better you understand, the better the potential actions you can take. The better the potential actions, the fewer problems you’ll encounter down the road. Better models make better decisions.

Less is more. “A few extremely well-chosen objectives,” Grove wrote, “impart a clear message about what we say ‘yes’ to and what we say ‘no’ to.” A limit of three to five OKRs per cycle leads companies, teams, and individuals to choose what matters most. In general, each objective should be tied to five or fewer key results. (See chapter 4, “Superpower #1: Focus and Commit to Priorities.”) Set goals from the bottom up. To promote engagement, teams and individuals should be encouraged to create roughly half of their own OKRs, in consultation with managers. When all goals are set top-down, motivation is corroded. (See chapter 7, “Superpower #2: Align and Connect for Teamwork.”) No dictating. OKRs are a cooperative social contract to establish priorities and define how progress will be measured. Even after company objectives are closed to debate, their key results continue to be negotiated. Collective agreement is essential to maximum goal achievement. (See chapter 7, “Superpower #2: Align and Connect for Teamwork.”) Stay flexible. If the climate has changed and an objective no longer seems practical or relevant as written, key results can be modified or even discarded mid-cycle. (See chapter 10, “Superpower #3: Track for Accountability.”) Dare to fail. “Output will tend to be greater,” Grove wrote, “when everybody strives for a level of achievement beyond [their] immediate grasp. . . . Such goal-setting is extremely important if what you want is peak performance from yourself and your subordinates.” While certain operational objectives must be met in full, aspirational OKRs should be uncomfortable and possibly unattainable. “Stretched goals,” as Grove called them, push organizations to new heights. (See chapter 12, “Superpower #4: Stretch for Amazing.”) A tool, not a weapon. The OKR system, Grove wrote, “is meant to pace a person—to put a stopwatch in his own hand so he can gauge his own performance. It is not a legal document upon which to base a performance review.” To encourage risk taking and prevent sandbagging, OKRs and bonuses are best kept separate. (See chapter 15, “Continuous Performance Management: OKRs and CFRs.”) Be patient; be resolute. Every process requires trial and error. As Grove told his iOPEC students, Intel “stumbled a lot of times” after adopting OKRs: “We didn’t fully understand the principal purpose of it. And we are kind of doing better with it as time goes on.” An organization may need up to four or five quarterly cycles to fully embrace the system, and even more than that to build mature goal muscle.

gave up on the idea of creating “socialist men and women” who would work without monetary incentives. In a famous speech he criticized “equality mongering,” and thereafter not only did different jobs get paid different wages but also a bonus system was introduced. It is instructive to understand how this worked. Typically a firm under central planning had to meet an output target set under the plan, though such plans were often renegotiated and changed. From the 1930s, workers were paid bonuses if the output levels were attained. These could be quite high—for instance, as much as 37 percent of the wage for management or senior engineers. But paying such bonuses created all sorts of disincentives to technological change. For one thing, innovation, which took resources away from current production, risked the output targets not being met and the bonuses not being paid. For another, output targets were usually based on previous production levels. This created a huge incentive never to expand output, since this only meant having to produce more in the future, since future targets would be “ratcheted up.” Underachievement was always the best way to meet targets and get the bonus. The fact that bonuses were paid monthly also kept everyone focused on the present, while innovation is about making sacrifices today in order to have more tomorrow. Even when bonuses and incentives were effective in changing behavior, they often created other problems. Central planning was just not good at replacing what the great eighteenth-century economist Adam Smith called the “invisible hand” of the market. When the plan was formulated in tons of steel sheet, the sheet was made too heavy. When it was formulated in terms of area of steel sheet, the sheet was made too thin. When the plan for chandeliers was made in tons, they were so heavy, they could hardly hang from ceilings. By the 1940s, the leaders of the Soviet Union, even if not their admirers in the West, were well aware of these perverse incentives. The Soviet leaders acted as if they were due to technical problems, which could be fixed. For example, they moved away from paying bonuses based on output targets to allowing firms to set aside portions of profits to pay bonuses. But a “profit motive” was no more encouraging to innovation than one based on output targets. The system of prices used to calculate profits was almost completely unconnected to the value of new innovations or technology. Unlike in a market economy, prices in the Soviet Union were set by the government, and thus bore little relation to value. To more specifically create incentives for innovation, the Soviet Union introduced explicit innovation bonuses in 1946. As early as 1918, the principle had been recognized that an innovator should receive monetary rewards for his innovation, but the rewards set were small and unrelated to the value of the new technology. This changed only in 1956, when it was stipulated that the bonus should be proportional to the productivity of the innovation. However, since productivity was calculated in terms of economic benefits measured using the existing system of prices, this was again not much of an incentive to innovate. One could fill many pages with examples of the perverse incentives these schemes generated. For example, because the size of the innovation bonus fund was limited by the wage bill of a firm, this immediately reduced the incentive to produce or adopt any innovation that might have economized on labor.

People who plan have to have the guts, honesty, and discipline to drop projects as well as to initiate them, to shake their heads “no” as well as to smile “yes.

Andy Grove points out in his management classic High Output Management,

Much has been written about process design, so I won’t repeat that here. I have found the “The Basics of Production,” the first chapter of Andy Grove’s High Output Management, to be particularly helpful. For new companies, here are a few things to keep in mind:   Focus on the output first. What should the process produce? In the case of the interview process, an outstanding employee. If that’s the goal, what’s the process to get there?   Figure out how you’ll know if you are getting what you want at each step. Are you getting enough candidates? Are you getting the right candidates? Will your interview process find the right person for the job? Once you select the person, will they accept the job? Once they accept the job, will they become productive? Once they become productive, will they stay with your company? How will you measure each step?   Engineer accountability into the system. Which organization and which individual is responsible for each step? What can you do to increase the visibility of their performance?

The reasons for cooperatives’ success should be obvious by now, but they are worth reiterating: “The major basis for cooperative success…has been superior labor productivity. Studies comparing square-foot output have repeatedly shown higher physical volume of output per hour, and others…show higher quality of product and also economy of material use.”118 Hendrik Thomas concludes from an analysis of Mondragon that “Productivity and profitability are higher for cooperatives than for capitalist firms. It makes little difference whether the Mondragon group is compared with the largest 500 companies, or with small- or medium-scale industries; in both comparisons the Mondragon group is more productive and more profitable.”119 As we have seen, recent research has arrived at the same conclusions. It is a truism by now that worker participation tends to increase productivity and profitability. Research conducted by Henk Thomas and Chris Logan corroborates these conclusions. “A frequent but unfounded criticism,” they observe, “of self-managed firms is that workers prefer to enjoy a high take-home pay rather than to invest in their own enterprises. This has been proven invalid…in the Mondragon case… A comparison of gross investment figures shows that the cooperatives invest on average four times as much as private enterprises.” After a detailed analysis they also conclude that “there can be no doubt that the [Mondragon] cooperatives have been more profitable than capitalist enterprises.”120 Recent data indicate the same thing.121 One particularly successful company, Irizar, which was mentioned earlier, has been awarded prizes for being the most efficient company in its sector; in Spain it has ten competitors, but its market share is 40 percent. The same level of achievement is true of its subsidiaries, for instance in Mexico, where it had a 45 percent market share in 2005, six years after entering the market. An author comments that “the basis for this increased efficiency appears to be linked directly to the organization’s unique participatory and democratic management structure.”122 A major reason for all these successes is Mondragon’s federated structure: the group of cooperatives has its own supply of banking, education, and technical support services. The enormous funds of the central credit union, the Caja Laboral Popular, have likewise been crucial to Mondragon’s expansion. It proves that if cooperatives have access to credit they are perfectly capable of being far more successful than private enterprises.

Personal relationships are the only thing that prevents breakdown in the systems structure. There is constant need for arbitration of conflicts between various members of the system, for adjudication of disputes or jurisdiction, on direction, on budgets, on people, on priorities, and so on. The most important people, regardless of their job descriptions or assigned tasks, spend most of their time keeping the machinery running. In no other organizational structure is the ratio between output and effort needed for internal cohesion as unfavorable as in the systems structure.

In recent years there have been many proposals for geoengineering through solar radiation management. Some involve literally making the earth whiter (say, by using white roofs and roads). Perhaps the easiest to visualize is putting millions of little mirror-like particles 20 miles above the earth. For example, we might artificially increase sulfate aerosols in the stratosphere above background levels. This would increase the planetary albedo or whiteness and reduce incoming solar radiation. Climate scientists have calculated that reflecting about 2 percent of solar output could offset the warming effect of a doubling of CO2. The right number of particles in the right place could reduce solar radiation and cool the earth by the desired amount.

To digress 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 allows 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.

INPUTS: Stated succinctly, what is the clear and compelling purpose for the system? OUTPUTS: What are the meaningful outcomes you are committed to achieving? FEEDBACK: To what degree does your feedback process allow you to manage the inputs and improve the outputs on a consistent basis? In what ways has your “systems intelligence” grown?

Even more interesting, SAP has used the social currency supply to stimulate its developer economy in the same way as the Federal Reserve uses the money supply to stimulate the U.S. economy. When SAP introduced a new customer relationship management (CRM) product, it offered double points on any answer, code, or white paper relating to CRM. During the two-month duration of this “monetary expansion” policy, developers found gaps in the software and devised new features at a vastly higher rate.43 Used as a money supply, the increased flow of social currency caused overall economic output to rise. In effect, SAP employed an expansionary monetary policy to stimulate growth—and it worked.

As a general rule, you have to accept that no matter where you work, you are not an employee—you are in a business with one employee: yourself. You are in competition with millions of similar businesses.

If you only understand one thing about building products, you must understand that energy put in early in the process pays off tenfold and energy put in at the end of the program pays off negative tenfold.

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 chairman forces you to show up at a meeting prepared and on time, you might consider him a drill sergeant. But if you show up on time, ready to work, and someone else doesn’t and isn’t, you’ll probably begrudge the person responsible for wasting your time. It must be much the same in an operating room. Some people working there may not like a surgeon insisting upon precision, but I am one patient who would much prefer a disciplined operating room to any other kind. Once

Indeed, in many agricultural regions — including northern China, southern India (as well as the Punjab), Mexico, the western United States, parts of the Middle East, and elsewhere — water may be much more of a constraint to future food production than land, crop yield potential, or most other factors. Developing and distributing technologies and practices that improve water management is critical to sustaining the food production capability we now have, much less increasing it for the future. Water-short Israel is a front-runner in making its agricultural economy more water-efficient. Its current agricultural output could probably not have been achieved without steady advances in water management — including highly efficient drip irrigation, automated systems that apply water only when crops need it, and the setting of water allocations based on predetermined optimum water applications for each crop. The nation’s success is notable: between 1951 and 1990, Israeli farmers reduced the amount of water applied to each hectare of cropland by 36 percent. This allowed the irrigated area to more than triple with only a doubling of irrigation water use.37 Whether

If you avoid the presenter’s 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 valuable 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. Mission-Oriented

up to five hundred genes change their output when a person makes positive lifestyle changes, such as improved diet, moderate exercise, meditation, and stress management.

Our society respects someone’s throwing himself into sports, but anybody who works very long hours is regarded as sick, a workaholic. So the prejudices of the majority say that sports are good and fun, but work is drudgery, a necessary evil, and in no way a source of pleasure.

Productivity means fewer efforts in returns of more output.

Thus, 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.