Key Messages
Learn The Lessons Of Being A Ceo: How To Fire People, Hire With Weaknesses And Be A Wartime Ceo
The Hard Thing About Hard Things provides readers with an inside look at what it takes to become a great CEO.
Through the perspective of Ben Horowitz, readers gain insight into the daily struggles and decisions that come with leading a company as well as the invaluable lessons he learned throughout his journey.
From learning how to fire people without creating animosity to why hiring someone with weaknesses can be a benefit, this book equips aspiring CEOs with all they need to know.
It moves beyond just the knowledge though – it dives deeper into developing and honing those skills that successful CEOs have, such as resilience and courage in making hard decisions.
Most importantly, readers will find out what truly makes someone a “wartime CEO” which requires one’s ability to think big picture while keeping their head on straight through times of struggle.
The Struggle: Negotiating Crises And Difficult Decisions As The Ceo Of A Company
Running a successful company is no easy feat.
Every CEO must deal with the pressures and responsibilities that come along with such a task.
Whether it’s making tough decisions for the business, dealing with financial concerns, or even trying to find the right people for certain roles, every leader has to face their own separate set of challenges.
These hardships are referred to as The Struggle – where hopes and dreams of success clash with reality.
It can be taxing on both the physical and mental states of an individual, not to mention any pre-existing relationships or career considerations they may already have.
The Struggle is what makes a talented leader great–it’s where greatness is born.
Despite the difficult decisions and immense stress that comes alongside The Struggle, it’s ultimately up to the CEO negotiate their way through these trials and tribulations.
If they succeed in overcoming these problems, they’ll be rewarded for their hard work; if not, then there might very well be serious consequences involved.
Dealing With The Struggle As A Ceo: 3 Strategies For Surviving And Thriving In Difficult Times
The Struggle can be daunting for CEOs, but it doesn’t have to be a solo journey.
Enlisting the help of your team and being creative in how you find solutions can go a long way in easing some of the burden.
Take for example the dot-com crash’s effect on Opsware, the software company owned by author Ben Horowitz.
He assembled his entire team to discuss the issue, told them honestly and directly what the consequences would be if they failed to overhaul their product, and even said that anyone who wasn’t willing to commit fully should quit right there.
His sincerity motivated his employees in such a way that they managed to save their company and increase its stock price from $0.35 per share to $7 each!
The author also faced an incredibly demanding juggling act while at Loudcloud during the dot-com boom.
He was $2 million short of their revenue goal of $75 million, yet he still managed to come up with a solution.
By taking Loudcloud public and raising funds this way, Ben Horowitz was able to keep his company afloat.
Ultimately, the struggle can seem unbearable at times – but with teamwork or individuals coming together as a united front and looking towards creative solutions, it becomes much less intimidating.
And stay focused on where you’re going; just like racecar drivers do when they face hazards on the track: don’t look at them, concentrate ahead.
This will help you remain confident in your ability to get through The Struggle as CEO!
The Value Of Being Open And Honest With Employees About Bad News
When it comes to dealing with problems and bad news in your company, honesty is the best policy.
Nothing good ever comes from keeping information secret; not only does gossiping quickly spread the bad news anyway, but secrecy also erodes trust among employees and demoralizes them when issues surface unexpectedly.
Instead of trying to contain any bad news, the CEO should divulge any underlying issues as soon as possible so that the whole organization can start to address the problem right away.
This will help put those problems in the hands of people who have the expertise to analyze and come up with solutions quickly – engineers can examine technical aspects while accountants work on costs and so forth.
Many CEOs fall into the positivity delusion, thinking their employees cannot handle daunting tasks or too much information.
But by being upfront about challenges within their organization, CEOs empower their teams to take charge and find timely solutions for any crisis situation.
Everyone will benefit from improved communication surrounding bad news because finding answers become that much easier when you all work together towards a common goal.
Laying Off Employees The Right Way: Fast, Fair, And Admitting Failure
Nobody wants to have to lay off people, but if it is necessary, then it must be done as quickly and fairly as possible.
This means doing it immediately once the decision has been made, so that people don’t suffer from prolonged fear and anxiety.
And when it comes to those who are being let go, they should be given severance packages and references that are fair, in order to show respect for the hard work they put in at the company.
It also helps if you are able to explain why this was necessary in a clear way.
Instead of blaming certain employees or justifying a bad situation with excuses like “targets weren’t met”, it’s important for the CEO to take responsibility by admitting that the company failed its employees and explaining openly what must be done now to move forward.
This can help build trust between remaining employees and management, while allowing everyone an opportunity to process the experience together.
How To Fire An Executive: Tips For Ceos On Letting Go Fairly And Respectfully
When it comes to firing an executive, the CEO needs to take responsibility for the mis-hire and ensure that there is continuity of business.
The CEO has to understand that they are responsible for hiring wrong people in the first place and must explain this to the board.
They have to investigate why they made such a mistake and formulate a plan on how it can be avoided in future.
This will help build trust between the board members and them.
The CEO also must prepare well for the conversation with the executive, including figuring out what words they will use and coming up with a good severance package.
They should not humiliate or berate the person as it decreases morale among those who stay on in the company.
Once an executive leaves, there needs to be continuity of business so that operations do not get hampered.
This can be done by temporarily replacing them until a new one is found or delegating these duties amongst existing team members.
All of this will help keep things running smoothly even after an executive has departed.
How To Take Better Care Of Your Employees: Invest In Quality Hr And Training
If you want to take good care of your people and create a great organization, you need to start by investing in the right human resources structure and training your staff.
Begin by setting up a dependable HR team who can give you insider information on issues that you may not be able to detect on your own.
An example of this would be if they inform you that the compensation you offer isn’t up to par.
From there, you can decide how best to reconsider that offer.
In addition, make sure to provide ample training for each employee in order for them to fully understand how your company works and what tools are associated with their role – this is non-negotiable.
Training should also equip them with the experience and skills necessary for them to excel in their job, as well as hit their goals.
Finally, don’t forget about management training – explain how your managers should train their teams and the type of performance feedback they should deliver.
An effective HR structure coupled with informative training are two of the most important pieces in taking good care of your people and transforming an organization into something extraordinary..
How To Recruit Wisely: Emphasize Strengths And Consider Accurate Fit For Company Size
When hiring employees, it is important that you focus on their strengths, rather than looking for reasons to reject them based on their weaknesses.
You want to hire people who can excel at the job and have the abilities needed to do it well.
Take the example of Mark Cranney as mentioned in The Hard Thing About Hard Things – he had all the necessary strengths to succeed in sales management, but was seen as a poor cultural fit by some.
Nevertheless, he was hired and ended up being an invaluable asset for the company.
It’s also essential to ensure that any new employees’ experience is compatible with your company’s size; the roles vary significantly between smaller and larger businesses, so mismatches could occur if one hires someone used to a bigger setup into a small team.
A rhythm mismatch could arise if an executive accustomed to working at a high pace at a bigger company discovers there isn’t as much work waiting for them when they join a smaller firm.
On the flip side, somebody moving from a smaller company with fewer resources might find themselves struggling to adapt when joining a large one due to insufficient knowledge and awareness of all that is involved.
The best way forward is indeed to look for people with the right strengths for your unique needs and make sure their prior experience matches up with what you require!
How To Make Your Company A Pleasant Place To Work
If you want to create a company where people are motivated and happy to work, one of the most important things you must do is dispense with any corporate politics.
And the best way to do this is to hire ambitious employees who want the company’s success just as much as their own.
This helps make sure that no one will be using their energy or diverting attention or resources away from furthering the business.
You can also help put an end to potential political maneuvering by setting up clear processes and timelines: when it comes to performance evaluations, compensation and promotion schedules, everyone should know exactly how these things operate and when they will take place.
Finally, it’s also essential that all employees understand what is expected of them, as well as how their work is valued.
A hierarchy of titles can be useful for this purpose – although it must be set up in such a way that it does not lead to the “Law of Crappy People”, where lower levels titles may inadvertently undervalue higher level roles.
What Makes A Great Ceo? Vision, Authenticity And Motivation
The key to successfully leading an organization lies in knowing what direction to take and then getting the rest of your team to execute on that vision.
That’s what sets apart great CEOs–like Steve Jobs, Bill Campbell, and Andy Grove–from the rest.
Steve Jobs was a master at articulating his vision, even when Apple was on the brink of bankruptcy.
His sheer determination and willingness to lead the company motivated everyone around him.
Similarly, Bill Campbell had the unique ability of being compassionate yet highly motivational in his communications; by making everyone feel like they were part of a team and invested in its success.
Finally, Andy Grove showed remarkable decisiveness despite the challenging costs associated with Intel’s foray into microprocessing; something that ultimately secured their success today.
In short, having a clear understanding of where you want to take your business combined with excellent communication skills are essential for being an effective leader who can get their organization moving forward in harmony.
The Difference Between Ones And Twos In Leadership: Finding The Perfect Combination Of Skills
In The Hard Thing About Hard Things, the author describes two different approaches to leadership: the One and the Two.
Ones are decision makers, who enjoy researching and making important strategic decisions.
They define a path for their organization to follow and typically have big-picture visions.
Famous Ones include Bill Gates of Microsoft, who had an incredible forward-thinking vision.
But because Ones don’t see themselves as implementers, their organizations can become disorganized and chaotic.
Twos are implementers; they prefer the execution aspect of leadership over research and planning.
While Twos may struggle with making major strategic decisions that require proper analysis and foresight, they succeed in executing plans when ones have already been defined by Ones.
An example of a Two is someone like Dan Morris, former executive at Blackstone Group, who is known for remarkable employee development skills over visionary thinking capabilities.
Ultimately, it’s ideal for great CEOs to combine both characteristics of Ones and Twos into Functional Ones – understanding when it’s necessary to be decision makers as well as competent executors in their own particular areas of expertise.
It Takes Different Strategies To Survive In A Peacetime Or Wartime Business Landscape
Finding the right CEO for a company can depend on a lot of different factors, most notably its circumstances.
These can differ from a peaceful era where the company already has an advantage in the market to a time of war, where the health and even survival of the business may be threatened by macroeconomic shifts or competition.
In peacetime, CEOs have to focus on strengthening their existing advantages over competitors and look for ways to innovate in order to create new products.
Google is a good example of this as they are investing in technologies that speed up the internet while also allowing employees time to work on creative projects that have led to successful products.
On the other hand, Wartime CEOs have a bigger responsibility – they must make tough decision quickly in order to adapt their business strategy in order to survive.
A classic example of this is Andy Grove of Intel who had 80 percent staff devoted to memory production yet needed to pivot them towards microprocessors after Japanese companies released better technology.
Despite this being seen as a hugely successful move later on, it was undoubtedly risky at the time!
Great Ceos Need To Master A Variety Of Skills, Including The Ability To Give Constructive Feedback And Getting Comfortable With Doing Uncomfortable Things
One of the most difficult, yet essential, things that a great CEO must learn to do is operating in an uncomfortable environment.
Even though it may feel unnatural, becoming a successful CEO means having to get used to doing things that initially feel uncomfortable.
For example, having to critically evaluate someone else’s performance who you are unfamiliar with and have little personal experience in their field of work can be daunting, but it’s something that must be done for a company to succeed.
Similarly, when giving constructive feedback you should strive for the so-called ‘shit sandwich’ approach: sandwiching the unpleasant/difficult topics between two positive comments.
However, higher level executives may find this habitual technique too rehearsed and insincere.
Although it may seem like a great CEO is born and not made — the truth is that CEOs grow into the job by developing the right characteristics and skills needed for success.
Even if you don’t naturally have them; these traits such as authenticity, proper feedback techniques etc., can all be learned over time.
So even though it may be uncomfortable at first, you can absolutely become a great CEO if you are willing to take on these challenges!
How To Decide If It’S The Right Time To Sell Your Company
Selling a company isn’t easy and brings about both emotional and rational obstacles that need to be addressed.
Even if a technology company might have received an offer, entrepreneurs may still struggle to make the decision as they feel deeply attached to the creation.
The type of acquisition can vary significantly too; whether it’s meant to acquire talent and/or technology in the range of $5-$50 million or acquiring products priced at $25-$250 million, or even acquiring the entire organization for billions of dollars.
With whichever type, you’ll need to understand the situation thoroughly before deciding on anything.
On one side, you’ll likely be conflicted with feelings of selling out your dream when this could provide a substantial source of income for you and your team.
It’s essential to ensure everyone is on the same page from the start about goals and expectations so no one feels as though decisions are being made blindly.
Additionally, set clear expectations that include having yourself receive a competitive salary – don’t let personal finances impede possible judgments.
And from a rational perspective, you should use an honest appraisal when estimating projections such as what markets you could lead towards long-term growth if staying independent is an option rather than selling out right away.
In general though, selling should only be considered when there is no immense early mover advantage in sight otherwise it may not match up with original business plans.
Wrap Up
The final takeaway from Ben Horowitz’s book The Hard Thing About Hard Things is that running a business is an incredibly difficult endeavor.
You will face tremendous pressure and loneliness, but it can also lead to great rewards.
This journey of success isn’t easy, but it’s definitely worth the effort.
This book does not offer false hope or unrealistic expectations—it instead gives you an honest glimpse into what it takes to be successful as an entrepreneur.
It encourages you to persevere when times are tough, and offers valuable advice on how to make sound decisions amidst the chaos.
The Hard Thing About Hard Things provides readers with a detailed and inspiring blueprint for conquering The Struggle and achieving greatness.
