The Hard Thing About Hard Things - Ben Horowitz
Ben Horowitz founded and ran a growing company that he eventually sold for $1.6 billion. Life as a CEO is about making hard decisions. Especially when it comes to people.
Running a company is hard. Running a growing company, while fun, is harder. Growing it to over a billion dollar valuation is a dream many of us wish to have on our resume.
The CEO will regularly bump up against "The Struggle". It can be in the form of outside economic issues, missteps through internal financials or even making the wrong hiring decisions.
Ben Horowitz lead his company Opsware through the dot-com crash. This is a feat in itself and, by being open with his team and using what he shared in this book was able to fight from $0.35 per share to over $7.
Much of this battle is fought inside the mind of the leader. The personal psychology is the greatest part of The Struggle. We entrepreneurs get this and it is important to learn how to deal with it and work through it to victory. The famous illustration of the race car driver focusing on the road ahead rather than the track walls lends nicely to the difference in focus on solutions rather than obstacles.
Throughout the book, Ben makes some vital points to other CEOs:
- Be open with bad news. It's better to deal with it immediately. I say "in absence of a story, people make up their own." Not being open will create a negative culture. Being open will also invite solutions from the smart people you hired.
- Layoffs happen. Again, deal with it immediately and fairly - take responsibility. Set your people up for victories elsewhere. How you handle the people you need to let go will make a difference in your reputation.
- How you fire an executive is even more important. Bill Campbell, a famous CEO, said "You cannot let him keep his job, but you absolutely can let him keep his respect." Focus on continuity for the business. This is the greatest impact.
On the team:
- Take care of your people. Train them well, pay them fairly and give them the tools needed to succeed in their roles. Also provide management the guidelines to get the performance you expect.
- Hire for the person's strengths not reject them for their weaknesses. Ben seems to be saying someone should be hired even if they don't fit the culture. (I disagree with this - although I respect what Ben is saying).
- Ditch the politics to create a great place to work. I like the term he uses "ambitious in terms of the entire company not just their own career." He speaks of having structure around performance reviews, compensation and promotions.
On being a CEO:
- Know what needs to be done and get the organization to do it. Ultimately simplified however, the true role of a CEO is being able to look at the big picture and focusing the team on getting only the core things done. This is key in dire times. Simplify and do only what is needed.
- There are two types of CEO's: Ones - Decision Makers and Twos - Implementers. This is similar to what Gino Wickman calls Visionaries and Implementers. Truly great CEO's learn to combine the characteristics. (Again, I disagree in the sense that a true visionary cannot do a good job of implementation and visa versa. That being said, leaders that don't have a yin to their yang need to either hire someone to do the other part or at least minimize their weaknesses in the opposing skills to protect the core of their company).
- There are different CEOs: Wartime CEOs and Peacetime CEOs. When a company is going through tough times or fighting to grow, Wartime CEOs are important. When a company is working to keep their edge and hone their market, the Peacetime CEO is best.
- No CEO knows everything they need to. Stay authentic and grow. Like a boxer learning new footwork, things might feel uncomfortable at first but you grow into it. At the same time, don't lose your core you.
- There are different types of acquisitions: The first is acquiring talent and/or technology. This can happen at the scale of $5-50 million. The second is a desire to acquire the products to sell. These are at the scale of $25-250 million. Finally the acquisition is aimed at the whole company. These are at a scale of billions. Through any of these, it is vital to be rational and make clear decisions.
Being a CEO can be lonely. There is a lot of pressure and The Struggle is real. Like anything, though, greatness and happiness happen through struggle.
Rating: 3/5 stars