This is probably the best management book I have ever read (and the most difficult to synthesis). Ben Horowitz recounts in his book the hard times he encountered during his career, especially as the founder CEO of Loudcloud and Opsware. It’s not about theories and models to follow. It’s about real situations, thoughts and decisions he had to make. Read this book send you in his mind when he had to make choices where there were no good choices, when he made mistakes, when he decided or not to sell the company, or when he managed his executives team.
Difficult to synthesis because it’s composed of a lot of personal stories and analyses, and getting the main ideas would lead to rewriting the entire book. However, I noted some ideas among a lot. But again, it’s really worth reading the whole book.
Learn to be CEO
Ben Horowitz shares the idea that nothing can prepare someone to be a CEO except the fact of being a CEO. That means a CEO will face a lot of situations he doesn’t know how to manage or does not have the skills for. He has to make himself a CEO. In addition to that, it’s a lonely job. Even if he can share with his executive team or the board, in the critical moments, he takes the decisions alone.
“By far, the most difficult skill I learned as CEO was the ability to manage my own psychology.”
To help through this journey as a CEO, Ben Horowitz lists some advices he applied himself:
- Focus on what you need to get right and stop worrying about all the things that you did wrong
- Make some friends as it’s extremely useful from a psychological perspective to talk to people who have been through similarly challenging decisions
- Get it out of your head and onto paper. That can help separate yourself from you own psychology in the hard time.
- Focus on the road, not the wall. There are always a thousand of things that can go wrong. If you focus too much on them you will drive yourself nuts.
Peacetime & wartime CEO
A difference has to be made between the good CEOs. Some are good in peacetime, others in wartime. Peacetime can be defined when a company has a large advantage over the competition and its market is growing. So, they can think about growth. On the other hand, Wartime is when the company is facing a threat. This can come from the competitors, a market change, a macroeconomic change, and so forth.
The skills needed are not the same in each situation, and the behaviors when driving the teams should be different.
The given definition of politics is when people advance their careers or agendas by means other than merit and contribution. Ben Horowitz says that these behaviors often come from CEOs even if they are the least political CEOs. It often occurs unintentionally as a result of CEO actions or decisions. To minimize politics, two techniques are advised:
- Hire people with the right kind of ambition. The definition given by Andy Grove is: the right kind of ambition is ambition for the company’s success with the executive’s own success only coming as a by-product of the company’s victory.
- Build strict processes for potentially political issues and do not deviate. In particular for activities as performance evaluation, organization design or promotions.
Face the hard decisions head on
Ben Horowitz makes the parallel with the personal life where we all encounter facing choices between doing what’s popular, easy and wrong, versus doing what’s lonely, difficult and right. This is all about courage to face our own decisions (cutting a popular project, selling or not the company, …).
“Every time you make the hard, correct decision, you become a bit more courageous and every time you make the easy, wrong decision, you become a bit more cowardly. If you are CEO, these choices will lead to a courageous or cowardly company.”
Embrace the struggle
As your dreams turn into nightmares, you find yourself in the Struggle. The Struggle is not failure. But depending on you, your courage, your strengths and weaknesses, it can cause failure or bring greatness. Ben Horowitz provides some advices to go through the Struggle:
- Don’t put it all on your shoulders. Get the maximum number of brains on the problems even if the problems represent existential threats.
- This is not checkers, this is chess. Technology moves, competition moves, market moves, the people move. This is like playing a 3D chess. There is always a possible move.
- Play long enough, and you might get lucky. In the technology game, tomorrow looks nothing like today. If you survive until tomorrow, it may bring you the answer that seems impossible today.
- Don’t take it personally. Everybody makes mistakes. Every CEO makes thousand of mistakes.
CEO should tell it like it is
A strong advice in the communication area shared in the book is to stop being too positive to protect employees. The CEO should tell the real situation (with the appropriate reformulation) to let the whole company informed and get the more brains working on the solutions.
Without trust, communication breaks. More specifically: In any human interaction, the required amount of communication is inversely proportional to the level of trust.
Take care of People, Products and Profits (in that order)
As Ben Horowitz mentioned, it’s a simple saying but it’s deep of sense and difficult to follow as taking care of people is a really complex path. As an organization grows large, good people can be hidden by political and bureaucratic process. In peacetime, being a good company is important but not essential. But when things go wrong, it’s critical to be a good place to work as the only thing that keeps your employees at the company is that they like their job. And things always go wrong at some times.
“In good organizations, people can focus on their work and have confidence that if they get their work done, good things will happen for both the company and them personally. It’s a true pleasure to work in an organization such at this. Every person can wake up knowing that the work they do will be efficient, effective, and make a difference for the organization and themselves. These things make their jobs both motivating and fulfilling.”