Building a business when there are no easy answers
Written by: Ben Horowitz
TEOARIS CONSULTING REVIEW
It’s always a great thing to start a business, but running it, and navigating it through turbulent periods don’t look great at times.
In the book – “The Hard Thing About Hard Things”, Ben Horowitz, co-founder of Andreessen Horowitz, and one of Silicon Valley’s most respected entrepreneurs, draws on his personal achieving and humbling experiences to offer practical advice dealing with the hardest parts of running a business as a leader.
10 Key Ideas From The Book
- The job of a CEO comes with pressures.
Everyone who founds a company or runs one as the CEO has dreams. Usually these dreams revolve around building something making money.
Unfortunately, crises are an inevitable part of building a business, and this is where all CEOs meet The Struggle, which occurs when dreams of success meet reality obstacles. Sometimes, this struggle would be within. Other times, they’ll be from outside the business.
2. Leaders must rely on teamwork and creativity to get out of the trenches.
Even though the burden would probably fall on the CEO more than any other person in the business, the CEO must try to not bear the weight all alone. He/she must involve as many people as possible in this time of crisis. However, the individuals to be involved must be focused, truly committed and creative enough to assist in overcoming the struggle.
Also, in dealing with the situation, leaders must concentrate on the road ahead and not on the potential hazards and brick walls. They should focus on the solutions ahead, not the problems around.
3. Be honest about problems, break the news early and find solutions quickly.
Most secrets are never really secrets. When problems are hidden from people within the business, they can quickly erode trust even demoralize them when the problems eventually become known. Sometimes, your employees could feel they could’ve fixed the problems had they known about them.
Instead of keeping quiet, the CEO should tactically divulge the bad news. This stops any gossips and unhealthy grapevine talks and the organization can focus on olving the problem.
4. Lay off quickly and fairly when necessary.
Laying of people is never an easy task, but when necessary, business leaders should do it as early as possible. Beyond that, they should be honest to admit mis-hiring in the first place, and take lessons from it.
5. Build a good HR structure. Take care of your personnel; train them well.
An organisation’s personnel are more important that the products and the profits. Hence, a business that wants to attain sustainable greatness must have a culture of taking good cae of its people. Equally important, organisations must continually invest in training theirs staff to gewt better and better.
6. Hire people based on their strengths, not their weaknesses.
Hiring right is never an easy task. Yet, the survival and competitiveness of a business largely depends on hiring right.
Hiring people for what they can do – their strengths. Business leaders should place more emphasis on these strengths rather than the weaknesses of the candidate. In order words, emphasis should be hiring people for their strengths, not rejecting them for their weaknesses.
Also, business leaders must ensure that experience matches the size of your company. These discrepancies can result in rhythm mismatch, (expected pace) or skill set mismatch (scale and complexity of work).
7. Build a good company where people want to work: dispense with politics.
As much as possible, curtail corporate politics.
Only hire people who are ambitious in terms of the entire company, not just their own careers and create clear and structured processes and systems that reward performances.
8. The key for leading an organization is knowing what to do and getting the organization to do it.
Great CEOs know what to do; they articulate them and motivate their people to get it done.
This ability has three key aspects: articulating the vision, being authentic and motivational, and getting the company to execute on your vision.
9. There are two different kinds of CEOs: decision makers and implementers.
Leaders can be broadly categorized into two.
Ones: Leaders whose approach is more focused on defining a path for the organization to follow than on implementing it. They enjoy researching and making important strategic decisions. They don’t enjoy much of execution: goal-setting, performance management, process control etc.
With these strategic-centric leaders, the organisations they run could sometimes become disorganized.
Twos: These are leaders who prefer implementation aspects of leadership over research and planning. They are hands-on, love; goal-setting, performance management, training and process improvement.
Leaders in this category mostly don’t like making big decisions. Sometimes this results in organizations where important decisions are not taken quick enough.
Truly great CEOs combine the characteristics of both Ones and Twos.
Hence, Ones and Twos need to continue to work on skills that lie outside your comfort zone to arrive at the perfect combination.
10. Depending on a company’s circumstances, it needs either a Peacetime CEO or a Wartime CEO.
The circumstances the company faces largely dictate the kind of management approach required. This means a company may need a Peacetime CEO or a Wartime CEO.
A peaceful era can be identified by the fact that the company already has an advantage over competitors in its target market. Typically, the market will also be growing, so the CEO simply focuses on enhancing this advantage further.
In wartime, on the other hand, the game changes completely. There are threats to the business that need to be counteracted or there are crises that need to be abated. This means the Wartime CEO carries a huge responsibility; the company lives or dies by her decisions.
CONCLUSION:
This is a great book to read both from a practical business leadership point of view and for management development. It’s an all time book written with humour and candour; sometimes touching on hard facts that are not taught or written elsewhere.
Check the Table of Content below for additional insight.
Table of Contents:
CHAPTER 1: FROM COMMUNIST TO VENTURE CAPITALIST
CHAPTER 2: “I WILL SURVIVE”
CHAPTER 3: THIS TIME WITH FEELING
CHAPTER 4: WHEN THINGS FALL APART
- The Struggle
- CEOs should tell it like it is
- The right way to lay people off
- Preparing to fire an Executive
- Demoting a loyal friend
- Lies that losers tell
- Lead bullets
- Nobody cares
CHAPTER 5: TAKE CARE OF THE PEOPLE, THE PRODUCTS, AND THE PROFITS – IN THAT ORDER
- A good place to work
- Why startups should train their people
- Is it okay to hire people from your friend’s company
- Why it’s hard to bring big company execs into little companies
- Hiring executives
- If you’ve never done the job, how do you hire somebody good?
- When employees misinterpret managers
CHAPTER 6: CONCERNING THE GOING CONCERN
- Concerning the going concern
- How to minimize politics in your company
- The right kind of ambition
- Titles and promotions
- When smart people are bad employees
- Old people
- One-on-one
- Programming your culture
- Taking the mystery out of scaling a company
- The scale anticipation fallacy
CHAPTER 7: HOW TO LEAD EVEN WHEN YOU DON’T KNOW WHERE YOU ARE GOING
- The most difficult CEO skill
- The fine line between fear and courage
- Follow the leader
- Peacetime CEO/wartime CEO
- Making yourself a CEO
- How to evaluate CEOs
CHAPTER 8: FIRST RULE OF ENTREPRENEURSHIP: THERE ARE NO RULES
- First rule of entrepreneurship
- There are no rules
- Solving the accountability vs Creativity paradox
- The freaky Friday management technique
- Staying great
- Should you sell your company?
CHAPTER 9: THE END OF THE BEGINNING
