As companies scale and become bigger, top management can often end up getting disconnected from the issues being faced by the rank and file. But Jensen Huang, the CEO of NVIDIA — currently the most valuable company in the world — has an ingenious method to be on top of all that’s happening at NVIDIA.
NVIDIA uses a system called “Top 5 emails” to enable CEO Jensen Huang to have a 360 degree overview of the company at all times, says Tae Kim, the author of ‘The NVIDIA Way’. Kim said that NVIDIA has an unusual organizational structure, in which CEO Jensen Huang has more than 60 direct reports.
“A key component to this is this thing called “Top 5″ emails,” Kim explained on the Upstream podcast. “Most companies have status reports where a low level employee writes a report that goes to a middle manager, who sanitizes that report, who then sends it to his boss, and then his boss’s boss. And by the time it gets to the CEO, there’s nothing actionable in the report — it’s completely devoid of any bad news, which is what the CEO needs to steer the company,” he said.
“So at NVIDIA, there’s no formal status reports. Everything is through this thing called ‘Top Five’ emails, where an employee and every executive, either every week or every two weeks, writes the top five most important things that they’re working on. (Things) they’re seeing in the market, what comparisons they are doing,” he explained.
“And what Jensen does is he samples a hundred of these top five emails every day. So he gets a real-time view of what’s going on in the market — what his employees are working on, what competitors are doing and so on. So that helps him make strategic decisions on where to steer the company and allocate resources almost on a real time basis.”
And Jensen Huang doesn’t only read the Top 5 emails — he actively responds to them and seeks clarifications. “He’s constantly on email, he’s emailing all weekend into Sunday night, asking his employees, what are you doing here, what did you mean by that, he is constantly sending like probably hundreds of emails a day. He has almost like a great sensor system that he sees what everyone’s doing,” Kim says.
“And that culture of employees being honest to Jensen and their executives — they call intellectual honesty — is part of the firm’s culture. So it’s just faster compared to the slow status reports in a typical company. Jensen has this real time view with hundreds of data points every day, and it just works in a faster, better way for NVIDIA,” he explains.
Kim said that Huang’s approach to getting regular “Top 5” emails from his employees was unique in the corporate world. “That’s something I don’t see other companies doing. Most companies love to have the CEO managing six or seven direct direct reports where the Chief Operating Officer is another layer doing all that stuff. No, Jensen wants his fingers and his pulse on everything. All the way up and up and down through the company,” he said.
Jensen Huang isn’t the only CEO who likes to interact directly with rank and file employees. Elon Musk famously speaks directly to his engineers when he’s looking to fix problems at one of his many companies, and has spent a lot of time sleeping on his factory floors. There does seem to be a pattern here — Elon Musk is the richest man in the world, and Jensen Huang runs the most valuable company in the world — and both CEOs seem to go the extra mile to have a direct line of communication with their many employees.