Input, Output, Outcome

Andy Grove’s excellent book High Output Management is rightfully considered a fundamental think piece in management tech. Nevertheless, the term “output management” is misleading. While a hardware company like Intel can more easily manage how many units are produced, i.e., output, that is not how software startups should view their product engineering. I believe this is one of the reasons we’re seeing so many companies struggling with hybrid/remote teams. Even worse are those who are still managing by inputs. If your people (or you) are being managed that way, this article will hopefully help you end up in a healthier position.

The Fallacies

Let’s start with a couple of real stories I’ve encountered. The first is of a first-timer VP Engineering who I thought was pretty darn good at the role. After working with over a hundred executives, it’s easier to spot those genuinely aligned with business impact, growing their teams, and pushing back on bad decisions, even if it’s tough politically. Unfortunately, the CEO thought differently. For him, a VP that’s not “hands-on” enough or that tries to introduce basic processes and clarity into the company is not “in it” or “managing for management’s sake.” That CEO is not looking at the outcomes—the improvement in the team’s performance over time—but judging the VP as one would assess a factory worker. If there are not enough butt-in-seat hours or lines-of-code produced, how good can they really be? They eventually parted ways, and the company missed out on a promising executive.

Contrast that with another story I’ve seen several times: VPs doing incredibly well, and the founders are very happy with how their teams perform. However, sometimes, these executives feel bad because they’re not “working hard enough!” The company’s leadership, concerned about results, is pleased, yet they are being self-judgmental and assuming they should work harder. Let me tell you something, the best executives I see don’t work hard but work smart. That’s only possible if you move past measuring inputs and outputs.

Old Crutches

The fact is that managing by trying to see how “hardcore” someone seems in the office or by tracking weird metrics that can be gamed, such as velocity, doesn’t really work in our modern world. When everyone sat in the same room, and one might have been satisfied with mediocre impact-per-engineer, those management crutches might have worked. However, this no longer makes sense.

When people realize they are rewarded for working “hard,” they start playing that game. You’ve seen the Dilbert strips about people making sure to leave five minutes after the boss or scheduling emails to be sent at odd hours. That’s precisely what’s holding teams from high-impact operations, especially as hybrid work becomes entrenched.

Mixed Signals

Further, founders who bemoan how their team is “lazy” usually refrain from doing so explicitly. After all, we all know that asking people to work harder without any real reason doesn’t look good. I do not think you should be measuring people (or allowing yourself to be measured) by anything but actual outcomes, but if that’s your current situation, at least let people know. Otherwise, you will end up getting resentful managers and frustrated employees who won’t understand the dissonance between what they’re doing and what the company is happy with.

For example, setting clear office hours might be an unpopular move, but if you’re measuring people by that, you might as well tell them what yardstick is being used so they can adjust to it. Otherwise, you will be even more likely to be displeased. Worried they’ll leave if you do that? You should be. But you have other options.

How Come Outcomes?

This all boils down to a straightforward conclusion: if you manage to come up with clear outcomes that a team can have genuine agency to achieve, management can become simpler. Teams who are given a business outcome and the proper staffing to get to it are always more engaged, satisfied, and creative. That means you’ll have to be fine with someone who doesn’t seem to “burn the midnight oil” if they’re still getting all of their work done on time.

I know that this is scary. In my work, I’ve sometimes had to talk to CEOs to get them to take a leap of faith in their executives and let them do what they ought to do. However, the other option is much scarier: you’ll be forever trapped in counting hours and staying very myopic, which will significantly hamper productivity as the team grows.