Andy Grove’s High Output Management is one of the most useful business books ever written. Grove's leadership was instrumental in guiding Intel through its pivotal transition from memory to microprocessor design and manufacturing in the 1980s, cementing his status as a tech industry icon.
In the book he documents his working history and management style, and is most famous for proposing what became OKRs, now canon in the tech universe.
But one of my favorite bits from the book (among several well known ideas) is his concept of “modes of control.”
The framework outlines different operational modes one can use to control and influence work, plotted along two dimensions: the motivations and incentives at play and the complexity of the environment (which he terms complexity, uncertainty, ambiguity: the “CUA factor”). Here's a 2x2:
The axes represent whether an issue involves individual or group interest, and the ambiguity of how to proceed with the unknown:
Group Interest → Self Interest
Low CUA (simplistic/legible, predictable, understandable) → High CUA (complex, ambiguous, unpredictable)
Each mode sits at one of the intersections. Grove emphasizes the importance of selecting the appropriate mode of control based on the situation and environment. The three modes, and examples:
Free market forces — Let the market work things out — low oversight, low control leads to bottom-up consensus. If you’re purchasing new tires, you select the lowest price and highest quality for your personal need. High self-interest, low ambiguity.
Contractual obligations — When a bias to self-interest orientation leads to negative outcomes for the group, upfront agreement on rules is required. Think traffic signals and stop signs. Individual sacrifice for better group outcome. There’s a high group interest in all of us obeying the rules, and low ambiguity about how to do so.
Cultural values — Decision making based on shared values, beliefs, and norms within the organization. Upfront contracts don't work when ambiguity and unpredictability are high. Group interest must be satisfied for the company’s success, but ambiguity can be very high as to how to know what to focus on. R&D and innovation fit with this mode, as does effective management and decision making in crisis situations. Strong cultural values in an organization help guide leaders to the right decisions without any explicit oversight.
Danger zone — When there's high tendency for selfishness and things are uncertain, you're in trouble. A sudden crisis without a strong culture or clear communication might lead you here, for example. When self-interest and ambiguity both spike up, you get chaos. An “everyone for themselves” panic on a sinking ship.
Thinking about this in the context of my own work, I can map past hardships and bad business decisions to mismatches in environment and mode. As managers, what we most often don’t respect enough is the nature of the CUA factor with a given job, project, or task. This mental framework for thinking about relationships is helpful for selecting the appropriate communication or management mode.
Next time your team encounters hard-to-overcome friction in getting things done, reflect on these modes and consider if you're mismatching your management style with the incentives and environmental ambiguity.
How do you think about “debugging” frictions in management? When things aren’t going well, how do you pick apart what’s wrong? I’d love to hear your thoughts in the comments.