The Hard Thing About Hard Things: Building a Business When There Are No Easy Answers

by Ben Horowitz

bureaucratic overhead.

Who should design a process? The people who are already doing the work in an ad hoc manner.

keep in mind that it’s much easier to add new people to old processes than new processes to old people.

What can you do to increase the visibility of their performance?

Different sizes of company impose different requirements on the company’s architecture.

CEO must be accomplished enough or smart enough that people will want to work for her.

Even if you know what you are doing, things go wrong. Things go wrong because building a multifaceted human organization to compete and win in a dynamic, highly competitive market turns out to be really hard.

Seeing people fritter away money, waste each other’s time, and do sloppy work can make you feel bad. If you are the CEO, it may well make you sick.

Every problem in the company was indeed my fault. As the founding CEO, every hire and every decision that the company ever made happened under my direction.

If the CEO is outwardly focused, she ends up terrorizing the team to the point where nobody wants to work at the company anymore. If the CEO is inwardly focused, she ends up feeling so sick from all the problems that she can barely make it to work in the morning.

problem is that she doesn’t actually fix any of the problems and the employees eventually become quite frustrated that the chief executive keeps ignoring the most basic problems and conflicts. Ultimately, the company turns to crap.

The key to getting to the right outcome was to keep from getting married to either the positive or the dark narrative.

The process of writing that document separated me from my own psychology and enabled me to make the decision swiftly.

The only reason the CEO can make a better decision is her superior knowledge.

everybody faces choices between doing what’s popular, easy, and wrong versus doing what’s lonely, difficult, and right.

technological advances have dramatically lowered the financial bar for starting a new company, but the courage bar for building a great company remains as high as it has ever been.

when it comes to CEO succession, internal candidates dramatically outperform external candidates.

when they make a decision, they comfortably make decisions with very little information when necessary.

The resulting companies become too chaotic to reach their full potential and the CEO ends up being replaced.

They insist upon super-clear goals and strongly prefer not to change goals or direction unless absolutely necessary.

by promoting someone past everyone on the executive team and making them CEO (as GE did), you will likely cause massive turnover of the executive staff.

the most important attribute required to be a successful CEO is leadership.

the measure of the quality of a leader: the quantity, quality, and diversity of people who want to follow her.

three key traits: The ability to articulate the vision The right kind of ambition The ability to achieve the vision

will the leader be able to articulate a vision that’s compelling enough to make people stay?

getting so many super-talented people to continue following him at NeXT, long after the company lost its patina, and in getting the employees of Apple to buy into his vision when the company was weeks away from bankruptcy.

The first thing that any successful CEO must do is get really great people to work for her. Smart people do not want to work for people who do not have their interests in mind and in heart.

Truly great leaders create an environment where the employees feel that the CEO cares more about the employees than she cares about herself.

he’s completely authentic. He would happily sacrifice his own economics, fame, glory, and rewards for his employees. When you talk to Bill, you get the feeling that he cares deeply about you and what you have to say, because he does. And all of that shows up in his actions and follow-through.

Bill:3

Indeed, the enemy of competence is sometimes confidence. A CEO should never be so confident that she stops improving her skills.

almost no CEOs that can function in both peacetime and in wartime. You’re a peacetime/wartime CEO.”

gregarious

Sociable

Peacetime in business means those times when a company has a large advantage over the competition

In times of peace, the company can focus on expanding the market and reinforcing the company’s strengths.

The great wartime CEO Andy Grove marvelously describes the forces that can take a company from peacetime to wartime in his book Only the Paranoid Survive.

basic principle in most management books is that you should never embarrass an employee in a public setting. On the other hand, in a room filled with people, Andy Grove once said to an employee who entered the meeting late, “All I have in this world is time, and you are wasting my time.” Why such different approaches to management?

Kaharsh din pala

In wartime, by contrast, the company typically has a single bullet in the chamber and must, at all costs, hit the target.

He needed everyone to move with precision and follow his exact plan; there was no room for individual creativity outside the core mission.

Google’s management fostered peacetime innovation by enabling and even requiring every employee to spend 20 percent of their time on their own new projects.

Peace time open pa sa creativity while war time... Have to be precise. As if one bullet left. No time tonwaste

Peacetime CEO builds scalable, high-volume recruiting machines. Wartime CEO does that, but also builds HR organizations that can execute layoffs.

Peacetime CEO spends time defining the culture. Wartime CEO lets the war define the culture. Peacetime CEO always has a contingency plan. Wartime CEO knows that sometimes you gotta roll a hard six. Peacetime CEO knows what to do with a big advantage. Wartime CEO is paranoid. Peacetime CEO strives not to use profanity. Wartime CEO sometimes uses profanity purposefully.

Peacetime CEO thinks of the competition as other ships in a big ocean that may never engage. Wartime CEO thinks the competition is sneaking into her...

Peacetime CEO does not raise her voice. Wartime CEO rarely speaks in a normal tone.

HAhaa

Peacetime CEO strives for broad-based buy-in. Wartime CEO neither indulges consensus building nor tolerates disagreements.

Maybe thats why lol

Wartime CEO is too busy fighting the enemy to read management books written by consultants who have never managed a fruit stand.

HAhha

it’s hard. Mastering both wartime and peacetime skill sets means understanding the many rules of management and knowing when to follow them and when to violate them.

Be aware that management books tend to be written by management consultants who study successful companies during their times of peace. As a result, the resulting books describe the methods of peacetime CEOs. In fact, other than the books written by Andy Grove, I don’t know of any management books that teach you how to manage in wartime like Steve Jobs or Andy Grove.

It generally takes years for a founder to develop the CEO skill set and it is usually extremely difficult for me to tell whether she will make it.

evaluating people’s performances and constantly giving feedback is precisely what a CEO must do.

“Spare me the compliment, Ben, and just tell me what I did wrong.”