When asked ‘should I apply to Stanford Business School or Y Combinator?’, a YC Alumni replied:
“Apply to both,” I reply, “they’re each amazing. YC is outstanding preparation for building an early stage company, and Stanford for leading as an executive and board member. But if you’re managing a company, do one more thing: read High Output Management.”
That book had a big impact on me, as well as Managing Humans by Rands, here are my consolidated notes on those two books, embellished with my own experience.
Let’s start with what you’re trying to achieve. This is normally in 3 cadences:
3-year - strategic vision
The quarterly goals are the next set of steps to achieve the annual ones, a good framework for setting them and communicating them is OKRs, the wonder of which is that they cascade down the org (i.e. everyone sets their goals inline with the OKRs all the way to the top) so in theory, the company is proceeding in the right direction at all levels. Organisations are full of opaque boxes and this is a good way of ensuring that all work is conducive to the strategy.
You’re going to need a team so let’s talk about finding them:
Interview on technical grounds but also for ‘cultural fit’, this dreaded term doesn’t mean that they are ‘like us’ it means that the person appears to embody the company’s values, which should be specific and clear to everyone.
Dig as deep as you can on technical/operational questions i.e jump around less, ask about fewer topics, but spend longer on each. If this person’s last job at a fast-food restaurant, ask them how they take orders, how they dealt with complaints, what they do at the end of a shift and why, what improvements could be made? The closer their experience to the role the easier this will be, but it doesn’t always mean the person has to have done the exact role before.
Don’t hire too rashly… it’s tempting to think that this person is going to solve our problems. You can’t be overly optimistic. Get the opinion of other team members and ensure everyone is happy.
Managers do 5 things
Gather information e.g. reporting
Make decisions to get outcomes and with buy-in
Nudge others (not micro-manage)
Find, retain, embolden and equip the team
Promote the culture and lead by example
Ideally a manager should manage 6 - 8 team members.
Managers should leverage their time
A manager is not managed by their effort but by their output. To improve that they need to leverage their capabilities.
Leverage does not mean ‘use’. It means disproportionately get a result compared to effort - like the mechanical advantage gained by using a lever.
Leveraged management activities:
Group training - pass your knowledge on in parallel, foster conversation
Performance reviews and one-to-ones - time to foster and improve each team member i.e. show them how to leverage their time and be more productive
Delegation - it’s important to remember to keep an eye on the outcomes/results here and to nudge and coach where necessary
Process design and review - looking for improvements working ‘on’ the business rather than in it
Retaining staff - staff are valuable and expensive to replace
Meddling and micro-management are the opposite of leveraged activity. For the company, it’s a waste of the manager’s time. The cause is usually that the team is not cut out for the work or the manager lacks trust and/or confidence. Often found with new managers, in which case they need to be coached.
Ultimately a manager should be reviewed on their effectiveness i.e. how close are they to getting the peak performance out of a given team i.e. how much leverage did they achieve.
What employees want
What do employees want? They want what everyone wants, the so called universal needs: Autonomy, Collaboration, Consistency, Clarity, Integrity, Recognition, Respect, Reassurance, Security, Support, Understanding.
They are also coming to work to progress their career, which means doing a great job of what they’re doing now but also keeping an eye on what opportunites beckon next, at a growing company you often find alignment between their career plan and what the company needs in future.
Keep in mind that as a manager, you a responsible for the performance of your team. There are two ways to improve it: training and motivation.
Employees should spend around 5% of their time on growth activities e.g. training, reading, conferences.
Employees should feel fairly compensated and if we feel they are underpaid vs the market we should strive to correct this. Money is the most talked about but it’s not the only incentive. It covers the first two levels of Maslow’s hierarchy (Physiological and Security needs), which leaves:
Social needs - a group that you bond with
Recognition - this could be internal praise of industry prominence
Self-Actualization - a wooly term that basically means fulfillment of one's talents
As humans what we crave is meaningful work that we’re good at, the sense of wellbeing that comes from this, combined with a sense of community, is extremely powerful and something that you should strive to create, not just for a productive work environment but because it is a natural and wholesome way for humans to exist.
All of this builds on top of an environment that you need to create of low Complexity, Uncertainty and Ambiguity (“CUA”). It is your job to make sure everyone understands their goals and what they need to do to get there.
You must also ‘shape the field’ so that they can see the ascension of their own goals in the plan going forward, usually this comes down to their career. What are they wanting to learn? Where are they wanting to be? Don’t forget the primary driver that is self-interest, it should be possible to align this with the business. Not just financially (e.g. we’re more profitable, you earn more) but in career-growth (e.g. you want to learn a new skill, and we need that skill).
How ‘much’ to manage people
Trust, but verify.
That’s the key. And the level of your involvement will come down to what Andy Grove called Task Relevant Maturity (TRM).
If your team member has high task-relevant maturity, managing them should come down to setting objectives and checking in.
Medium-high task-relevant maturity means dialogue - helping the team member find their way to the next level using your own experience.
Low high task-relevant maturity means your one to ones are likely to be very task orientated and very specific in what needs to happen.
This is all normally on the continuum of junior-mid-weight-senior but it’s important to remember that a senior team member doing a ‘new’ thing may have low TRM and require close guidance.
Not only will this be a more effective use of your time (more leverage) but managing people by focussing on their strengths is fantastic for motivation.
High Output Management talked a lot about dual reporting/matrix management, which is necessary in a technical organization where this is often a ‘line manager’ and also a day-to-day person coordinating a team. The book provides a good model for this.
Here are the types:
Note none of these are status updates meetings, especially one-to-ones - in general it’s best to keep status updates written.
One to ones - monthly with team members about their objectives and growth
Staff meetings - regular meetings to coordinate activities of a team, not a status update but a discussion of key issues and ideas to improve performance
Operational reviews - a team presents to a wider group on performance
Mission-Oriented meetings - one-off meeting (or series) to solve a specific problem
All hands - ideally once a week for 30 mins with company news, recent wins, and praise for demonstrations of excellence
I keep my default meeting time to 30 mins, but sometimes stretch to an hour and often try and finish early.
In these meetings often you’ll be making decisions, which consist of:
When it needs to be answered
Who decides - Decisions should be made at the lowest competent level but should include someone with sufficient experience and a broad view of the business.
Who needs to be consulted - this is vital for information gathering and, just as importantly, the buy-in of the team. This will be 10x harder if they are not consulted or even made aware of the decision.
Who needs to be informed - remember to eliminate uncertainty, within a company you should broadcast transparently and frequently.
Performance reviews generally happen at the same time as compensation conversations. For that reason your team is listening the most at this point so make use of that.
Make sure the goals are clear (see OKRs)
Nothing in the performance review should be a surprise. This is a sign that you are not doing your one-to-ones correctly.
Send a written copy first, then you can discuss and again, there should be no surprises in the meeting.
Performance reviews are about the past 6 months, it’s important to keep notes to avoid recency bias i.e. what’s the last thing you can remember they did
Managers can not possibly rate higher than their team, by definition.
Get to the point, listen, avoid the temptation to talk too much.
There are generally three types:
Typical i.e. alternating between what is being done well and what is not, working out together how to address that. I try not to have too many points in a review so we can focus on the most important.
The blast: explaining how they need to buck up your ideas, and specifically how. Often you’ll have to push through denial, blaming of others etc until the person can take accountability. At that point the conversation gets more useful because you can start working out solutoins.
The ace: the most pleasant but remember it’s still about improving that person for theirs and our benefit, so find growth areas.
Retention (or lack of) is basically always your fault. Either you wanted to keep the employee and they left, in which case we failed. Or you wanted them to leave and they left, in which case they were a bad hire or their role outgrew them. It doesn’t mean we have to panic but it’s generally best as a manager to stoically begin from a position that everything is your fault. It doesn’t mean you are a “bad” manager. It means you are imperfect, like everyone. Poor retention can be down to strategic issues that are beyond your control alone but that you can improve as a management team.
If someone has resigned, my beliefs have shifted closer to the US model where they should exit the company ASAP so we can all move on, although in client-facing roles it’s better to have more time for a full handover to the replacement.
Exit interviews are crucial because the power-dynamic of boss-worker has totally dissipated. For that reason, these are some of the most useful meetings you will have if you are serious about improving your team and company (and perhaps your own performance). Here are the main points:
Was your job as you expected?
What do you think of the initiatives happening in the company at the moment?
Did leadership do a good job?
What did we do well?
What is one thing we can do to improve?
Do we work inline with our values?
Those are my most general notes on this topic but I will add to this post over time.