Nvidia this year became the world's most valuable semiconductor company with a value of over $1 trillion. The company earns more money than Intel and other tech giants, and yet Jensen Huang's management style is quite unconventional, as it turns out, with no long-term planning and 40 direct reports, among other interesting tidbits. Nvidia CEO Jensen Huang outlined his management philosophy in an interview with Joel Hellermark conducted earlier this year (and recently noticed by analyst Dan Hockenmaier), giving a unique insight into the radically different way that Huang manages his company.
40 Direct Reports, No 1:1 Meetings
Huang avoids typical hierarchical communication and maintains a flat organizational structure, with as many as 40 direct reports. Meanwhile, he avoids 1:1 meetings, preferring group discussions that ensure everyone is on the same level, starting right from the top. Huang places a strong emphasis on continuous learning and staying updated with the latest trends and innovations in the industry. One of the ways he does this is by surrounding himself with knowledgeable individuals who are willing to share their expertise.
Meetings at Nvidia are not restricted by rank or position. Everyone, from VPs to entry-level employees, has access to all information and can join any meeting, according to Huang. Huang's philosophy revolves around the idea that if there's a strategic direction or decision to be made, why limit the information to a select few?
"If there is a strategic direction, why do you tell one person," Huang asked rhetorically. "You tell everybody, and so after, we are swimming in the soup of strategizing and how to formulate the path to the future. When the time comes, I will send it out to everybody at the same time, or I will tell everybody at the same time, and people will give me feedback, and we will refine it."
Share Strategic Directions, No Solid Plans
By sharing the strategic direction of the company with everyone, Huang says he opens the door for feedback from various perspectives. This collective approach is designed to harness the intelligence and expertise of the entire organization, leading to refined and well-thought-out strategies.
When it comes to strategies, Nvidia certainly follows its own path. In terms of planning, Huang believes that rigid long-term plans can sometimes be restrictive. Therefore, he doesn't set long-term or short-term plans. Instead, the company adopts a flexible approach, constantly re-evaluating its strategies based on the ever-evolving business and market conditions, according to Huang. This is particularly crucial given the rapid advancements in the field of AI, where adaptability can be a significant advantage.
"We don't do a periodic planning system," said Huang. "The reason for that is because the world is a living, breathing thing. So, we just plan continuously; there is no five-year plan, there is no one-year plan, there is no plan — there is just what we are doing."
To speed up the decision-making process and stay up-to-date with realities, Huang gave up usual status reports. He feels that by the time status updates reach him, they often lose their "ground truth" (original essence and authenticity). To counteract this, he encourages any employee to email him their immediate 'top five things' on their mind. Every morning, he dedicates time to reading around 100 of these emails, ensuring he is in touch with the ground realities of his company.
Think Outside the Box, Leave Commodity Markets
Huang says the core mission of Nvidia is to tackle challenges that are on the edge of what's currently possible, pushing the envelope of what conventional computers can achieve rather than solving regular computing problems. In fact, Huang believes in walking away from businesses or sectors that have become commoditized, which is why Nvidia left the smartphone and tablet SoC market a few years ago. Huang feels this approach drives technological advancements and sets Nvidia apart from rivals.
However, making decisions that deviate from the norm or established playbooks can be challenging. Instead of following established practices, Huang suggests breaking down problems into their fundamental truths and building solutions from there, saying this approach encourages innovative thinking and often leads to groundbreaking solutions that traditional methods might overlook. Another way Huang says he deviates from established practices is by trusting his intuition to 'make the right decisions at the right time.'
Huang describes Nvidia's organizational structure as having three primary objectives: attracting the best talent in the industry, operating with a lean and efficient team, and ensuring that information flows swiftly and effectively throughout the company.
The merits of different management styles often come with many tradeoffs, and we don't get to see that side of the picture in the one-sided description. However, it is clear that Huang's unique style is designed to retain much of the flexibility you would see with a start-up, as opposed to the rigid hierarchical organizations at large incumbents that often become mired down in internal bureaucracy and then begin to stagnate. Nvidia is experiencing rapid growth now as it has essentially cornered many aspects of the explosive GPU market, but how this streamlined management style will work as the company becomes larger remains a question, along with whether or not a successor could succeed in replicating the approach.