10.1 Look down on your machine and yourself within it from the higher level.
Higher-level thinking isn’t something that’s done by higher-level beings. It’s simply seeing things from the top down. Think of it as looking at a photo of yourself and the world around you from outer space. From that vantage, you can see the relationships between the continents, countries, and seas. Then you can get more granular, by zooming into a closer-up view of your country, your city, your neighborhood, and finally your immediate environment. Having that macro perspective gives you much more insight than you’d get if you simply looked around your house through your own eyes.
a. Constantly compare your outcomes to your goals.
You must always be simultaneously trying to accomplish the goal and evaluating the machine (the people and the design), as all outcomes are reflections of how the machine is running. Whenever you identify a problem with your machine, you need to diagnose whether it is the result of a flaw in its design or in the way your people are handling their responsibilities.
Sample size is important. Any problem can be a one-off imperfection or a symptom of root causes that will show up as problems repeatedly. If you look at enough problems, which one it is will become clear.
b. Understand that a great manager is essentially an organizational engineer.
Great managers are not philosophers, entertainers, doers, or artists. They are engineers. They see their organizations as machines and work assiduously to maintain and improve them. They create process-flow diagrams to show how the machine works and to evaluate its design. They build metrics to light up how well each of the individual parts of the machine (most importantly, the people) and the machine as a whole are working. And they tinker constantly with its designs and its people to make both better.
They don’t do this randomly. The do it systematically, always keeping the cause-and-effect relationships in mind. And while they care deeply about the people involved, they cannot allow their feelings for them or their desire to spare them discomfort to stand in the way of the machine’s constant improvement. To do otherwise wouldn’t be good for either the individuals on the team or the team that the individuals are a part of.
Of course, the higher up you are in an organization, the more important vision and creativity become, but you still must have the skills required to manage/orchestrate well. Some young entrepreneurs start with the vision and creativity and then develop their management skills as they scale their companies; others start with management skills and develop vision as they climb the ladder. But like great musicians, all great managers have both creativity and technical skills. And no manager at any level can expect to succeed without the skill set of an organizational engineer.
c. Build great metrics.
Metrics show how the machine is working by providing numbers and setting off alert lights in a dashboard. Metrics are an objective means of assessment and they tend to have a favorable impact on productivity. If your metrics are good enough, you can gain such a complete and accurate view of what your people are doing and how well they are doing it that you can almost manage via the metrics alone.
In constructing your metrics, imagine the most important questions you need answered in order to know how things are going and imagine what numbers will give you the answers to them. Don’t look at the numbers that you have and try to adapt them to your purposes, because you won’t get what you need. Instead start with the most important questions and imagine the metrics that will answer them.
Remember that any single metric can mislead; you need enough evidence to establish patterns. And of course the information that goes into the metrics must be assessed for accuracy. A reluctance to be critical can be detected by looking at the average grade each grader gives; those giving higher average grades might be easy graders and vice versa. Similarly helpful are “forced rankings,” in which people must rank co-worker performance from best to worst. Forced rankings are essentially the same thing as “grading on a curve.” Metrics that allow for independent grading across departments and groups are especially valuable.
d. Beware of paying too much attention to what is coming at you and not enough attention to our machine.
If you keep your focus on each individual task, you will inevitably get bogged down. If instead you pay attention to building and managing your machines, you will be rewarded many times over.
e. Don’t get distracted by shiny objects.
No matter how complete any project or plan, there will always be things that come out of nowhere and look like the most important or urgent or attractive thing to focus on. These shiny objects may be traps that will distract you from thinking in a machinelike way, so be on your guard for them and don’t let yourself be seduced.
* Source: Principles by Ray Dalio