The hard thing about hard things: Building a business when there are no easy answers, by Ben Horowitz
Ben Horowitz is estimated to be worth $2.8bn. He has run companies that led to him having enough money to invest in companies that made him a whole lot more money. This is his latest book.
The title gives the book’s content away. In the opening paragraphs he states: "The problem with (so many management books, is that) they attempt to provide a recipe for challenges that have no recipes… There’s no recipe for really complicated, dynamic situations."
It shouldn’t surprise you that there isn’t a recipe for leading your company out of its trouble, nor is there a recipe for motivating teams when your business is falling apart. And so much more. "That’s the hard thing about hard things—there is no formula for dealing with them."
So, what is the value of this book? The insights – and they are in abundance. Insights are not the answer, but they provide a clarity that may help you see possible answers for your situation.
People have asked Horowitz what it takes to be a successful CEO. "Sadly," he answers, "there is no secret, but if there is one skill that stands out, it’s the ability to focus and make the best move when there are no good moves."
Will you be successful if you do make ‘the best move’? Maybe. Maybe not. The best you can do, is to do your best. Not – ‘do everything correctly’ – you will never get that right, no one ever does.
Struggle, not failure
Everyone goes though ‘the Struggle’. The struggle is not the failure, but it causes failure. It is the land of broken promises and crushed dreams. It is where self-doubt becomes self-hatred. Many are not tough enough to get through it. Steve Jobs struggled, and so did (or does) Mark Zuckerberg. You are not alone. Of course, that doesn’t mean you will succeed.
The first principle of the Bushido (the way of the warrior), is to keep death in mind at all times. If you do, you will live as if each day is your last, and conduct your affairs properly. You will keep failure in mind when you hire, train or don’t train, build your culture deliberately or inadvertently, fire your friend and founding partner – a very public act, and a host of other hard things.
What is more important is what you do after you have messed things up.
Horowitz uses the term ‘managerial deficit’ in much the same way as the term ‘technical deficit’ is used. You make an inferior technical product because you are under time or financial pressure, and it costs you much more later, in correction or lost sales.
The ‘managerial deficit’ is much the same: how you act when things are hard. When you are low on cash; you lose a critical customer at a critical time; your company fails to perform as you envisioned it, and more. Making hasty or shoddy decisions could lead to a managerial deficit.
Don’t carry all the problems of your company on your shoulders, Horowitz suggests. Engage as many smart people as possible in the problem, even, and especially when, the problems represent existential threats. He told the "whole company that we were getting our asses kicked, and if we didn’t stop the bleeding, we were going to die," when his company was in that level of crisis.
The response was that the team rallied, built a winning product, and saved his company. When you alone would have said there are no more moves, there always is one. Involve others, they might see it.
"One of the most important management lessons for a founder/CEO is totally unintuitive." He, like many of us, thought we should project an upbeat sunny view and rally the troops to victory. He had believed that it was his problem to worry about the company’s problems. Far better to share the problem with the people who could not only fix it, but who would also be personally excited and motivated to do so.
You are probably thinking that your staff wouldn’t care to help. If you are right, that leads directly to the imperative: you must make your company a good place to work. Clearly you have to take care of the people, the product and the profits, but you have to do that in exactly that order – people first.
Taking care of the people is the most difficult, but with the highest return on your investment. A good place to work is where the hardest workers aren’t passed over by the best politicians, and the bureaucracy doesn’t choke creativity and squeeze out all the joy.
Being a good company rarely matters when things are going well, but it can be the difference between life and death when things go wrong. When things go wrong, will your people squeeze apple juice from a fresh apple with their bare hands?
Things always go wrong. There has never been a company - anywhere, ever - that had a monotonously increasing share price. Being a good company is an end in itself.
The legendary Bill Campbell was chairman of Intuit, on the board of Apple, and a mentor to many of the top CEOs in the tech industry. What impressed Horowitz most about Campbell, was his time running GO, a venture-capital start-up that raised more money than any other and lost nearly all of it.
In his career Horowitz met many ex-GO employees. What amazed him was that each one counted GO as one of the greatest work experiences of their lives.
"If you do nothing else, be like Bill and build a good company."
This book is full of raw wisdom across a wide spectrum of burning issues. It should not be overlooked by CEOs.
Readability Light --+-- Serious
Insights High +---- Low
Practical High +---- Low
Ian Mann of Gateways consults internationally on strategy and implementation and is the author of ‘Strategy that Works’ and ‘The Executive Update.’ Views expressed are his own.