The Hard Thing About Hard Things

By Ben Horowitz

Rating: 10/10

Best Line #1: There are two kinds of cultures in this world: cultures where what you do matters and cultures where all that matters is who you are.

Best Line #2:  People always ask me, “What’s the secret to being a successful CEO?” Sadly, 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.\

After many years of reviewing the literature, there are three books that I think are necessary for someone to become a great manager in any field. All three books are written by practitioners. All three books meld specific wisdom and insights with the personal experience of each author. All three books are relatively recent and incorporate the best wisdom of the past.

The first book in this Holy Trinity of Management is Andy Grove’s High Output Management. A review can be found here. The second book is featured here today with Ben Horowitz’s The Hard Thing About Hard Things. The third and final book will come next month.

This week’s book is my personal favorite of the three because it has so much heart. I’ve listened to Horowitz give interviews several times and found him much more engaging than the typical business executive. But the book surprised me. Horowitz’s voice should not merely be compared to other business executives. He is much more engaging than the typical author.

It’s the vulnerability. He really wears his heart on his sleeve when he says things like:

In my mind, I was confident that I was a good person and not selfish, but my actions said otherwise. I had to stop being a boy and become a man. I had to put first things first. I had to consider the people who I cared about most before considering myself.

This testimony comes on the first few pages of the book when Horowitz gets right to the heart of the challenges he faced. There is more emotion throughout the book that lends a deeper honesty to the great insights he offers. The man lived it. And he makes it clear that if we want to do these things, we’ll live it too. So here’s how to do it right.

This week’s articles highlight a few notable ideas that really stand out:

Struggling As A Leader? Thankfully, No One Cares

Entrepreneurship Is Calculus, Not Statistics

Change Your Teams To Change Their Minds

The Joy Of A Good Workplace

I’ll feature a few more notable bits of wisdom in the hopes of enticing you to get the book. It’s a very short, quick read but very rich, too. I couldn’t possibly do justice to covering the material without another three weeks of writing. Which would practically be plagiarism, I guess.

Great Managers Don’t Just Put Out Fires

There is a great misunderstanding amongst experienced managers. A lot of my colleagues say their job is to come to work and deal with problems. To manage those problems before they become widespread. To “put out fires” in other words.

This is true, of course. There are certain kinds of problems only a manager, with their authority and expertise, can address. There are times when things break and you have to fix them.

However, it leaves out a vital part of the job that only CEOs and startups seem to communicate these days—something that Horowitz refers to as the Struggle. As he explains it:

You lose a competitive battle. You lose a loyal customer. You lose a great employee. The walls start closing in. Where did you go wrong? Why didn’t your company perform as envisioned? Are you good enough to do this? As your dreams turn into nightmares, you find yourself in the Struggle.

And furthermore …

The Struggle is not failure, but it causes failure. Especially if you are weak. Always if you are weak.

Horowitz writes about the Struggle from the standpoint of a startup CEO or founder. Nonetheless, I think he’d say that it applies to anyone in a true leadership position. So any manager out there who thinks that all they are supposed to do is put out fires is dead wrong. They must inhabit the Struggle too. This is what my work here at Striving Strategically is all about. We may as well call it “Struggling Strategically”.

My point is that managers at all levels of the organization must have ownership in this Struggle. When a loyal customer is lost or a team falls short of a target, the failure is yours long before it is the CEOs. You, after all, are the CEO of that particular venture. You are there to create something out of nothing just as surely as the founder/CEO is trying to do the same. You might operate on a smaller scale but the responsibility (and pain) are still the same.

Managers who just put out fires only think about what their teams should not do. They work towards the minimum expectation. It’s the ceiling.

Great managers who engage in the Struggle work from the minimum expectation. It is the floor. They operate like a CEO, even if their company (i.e. team) is a couple people in a shared cubicle.

This idea is further expressed in Horowitz’s letter to his team titled Good Product Manager/Bad Product Manager. He shares the core idea in the book but the actual letter on the a16z.com website is even better.

Talent Has Many Faces

I don’t have the finest educational pedigree. I’ve had to do my best with the opportunities I can find. Those opportunities, great as they are, haven’t been the most illustrious in the grand panoply of all possible jobs. Therefore future opportunities are only marginally more illustrious. Every time I’ve attempted a leap to some real next-tier stuff, people reject me because I’m not in that tier already.

This is the chicken-and-egg problem of job markets everywhere. We’re looking to fill an entry level position. Four years experience required. People think it ends when you get your first job but it doesn’t. It even threatened Horowitz when he was seeking a job at Netscape. At the time, the company was only looking for MBAs. He didn’t have one. He had great industry experience but no MBA. And with a family to care for, he couldn’t get one.

He was nearly rejected by Netscape for that one simple reason. Thankfully, though, a hiring manager gave him a chance and the rest is history. All the same, this clearly stuck with Horowitz and it shows in his own hirings later on. Which gets to my favorite story in the book involves the author’s eventual hire of a sales executive named Mark Cranney.

At one point in the story of his company, Horowitz parts ways with his third VP of sales. The third VP in as many years as the company has existed. This is not good and he recognizes it. But before he tries to hire his fourth, he decides to inhabit the role for the interim. This is a really good idea. He writes about it with the following:

The very best way to know what you want is to act in the role. Not just in title, but in real action.

And ….

In my career, I’ve been acting VP of HR, CFO, and VP of sales. Often CEOs resist acting in functional roles, because they worry that they lack the appropriate knowledge.

That last bit about “lacking appropriate knowledge” is what people get wrong. Horowitz makes it clear that your ignorance of how to operate those roles isn’t nearly as threatening as your ignorance of how to fill the role with a future hire. This is what led him to make a terrific, very brave, very admirable decision with the VP of sales job.

After occupying the role for a while, our author developed a great understanding of what he was looking for and it didn’t involve an MBA or a prestigious school. It confirms so much of what I have suspected in so many recruitments: people usually don’t know what they really need when they hire other people. The stellar credentials and illustrious experience is nothing more than an insurance policy; it gives the hiring manager a sense of comfort that this new hire must know what they’re doing. And thank goodness because the hiring manager doesn’t know what they’re doing.  

An MBA is welcome, of course. Prestigious schools, too. But the point is that our author inhabited the role and became deeply informed on the actual job to be done. That meant he could find the strengths that complimented those needs. Armed with that knowledge, he began his search.

Enter Mark Cranney.

I won’t spoil the story but suffice to say that Cranney did not fit the common mold. Like me, he didn’t go to the Ivy league schools. But unlike me, he had built a meticulous sales approach and training system and, unlike most, he understood what the job needed and required. His strengths were a perfect match for what Horowitz was looking for. And so, despite the unconventional appearance of things, our author was able to override convention and the superficial (though well-intentioned) doubts of his advisors and make the hire. He explains this with two lines that I think are really important:

I’d learned the hard way that when hiring executives, one should follow Colin Powell’s instructions and hire for strength rather than lack of weakness.

And …

The reasons for voting “no” never referred to Mark’s lack of strength, but rather to his abundance of weakness.

Many of us, myself included, have suffered the fate of that flawed approach. People articulate all the weaknesses of a candidate because they have no sense of the strengths that are necessary. They’re not looking for strengths. Everything is a hedge against some downside instead of a reach for some upside. All because most hiring managers don’t know what they really need. I’m so grateful that Ben Horowitz offers a real story for why this is a terrible way to do things. I’m fine losing an opportunity because I don’t have the strengths. But to lose on weaknesses that are perceived, not even proven, sure does hurt.

I’m very proud to say I’ve never hired from that perspective. I hope others follow our author’s example and do the same.

Once hired, Mark Cranney became a force in Ben’s company. They rode a great wave all the way to a billion dollar acquisition.

Three Types of Managers

My final highlight involves a framework for assessing managers. After all, this is a book about becoming a great manager. As mentioned before, Horowitz applies this idea to CEOs but I argue that we’re all CEOs in some regard. We’ll call his framework “Ones and Twos”. It involves the following:

Ones have great strategic minds and enjoy nothing more than a good game of eight-dimensional chess against their best competitors. Ones sometimes get bored with many of the important execution details required to run a company, such as process design, goal setting, structured accountability, training, and performance management. Most founding CEOs tend to be Ones.

And …

Twos, on the other hand, thoroughly enjoy the process of making the company run well. They insist upon super-clear goals and strongly prefer not to change goals or direction unless absolutely necessary. Twos like to participate in strategic discussions but often have difficulty with the strategic thinking process itself.

This is absolutely correct. Mr. Horowitz doesn’t need my endorsement but, again, I’ve seen this precise framework many times over. I’ll say this, though: the “ones” who have great strategic minds can vary quite a bit whereas the “twos” are almost all the same. Some “ones” are straight-up networkers; they build relationships and execute strategy by handshakes.

Other “ones” walk around doing their best Michael Porter impression. They execute strategy by systems. Not the systems of a “two” but by the broader notions you find in Ben Thompson’s writings and the conversations I hear on a16z’s podcasts.

The point? Horowitz argues that you and I need to be both. As he writes:

While people tend to be Ones or Twos, with discipline and hard work natural Twos can be competent at One tasks and Ones can be competent at Two tasks. If a CEO ignores the dimension of management she doesn’t like, she generally fails. Ones end up in chaos and Twos fail to pivot when necessary.

I have seen both types fail in precisely this way. This is a very good framework. So how do you become both a One and a Two? First, you buy this book and read the rest of what our author as to say about this framework. Second, as a shameless plug, I humbly encourage you to read the other 22 books I’ve already featured and the next big stack that’s coming.

Conclusion

The ability to inhabit a “One” and “Two” mindset is synonymous with Charlie Munger’s idea of the many-model thinker. The key, of course, is to find a way to apply this thinking and make things happen. Horowitz would be the first to say “This is all nice, Norm, but what will people do with all this?”

To which I answer by paraphrasing some of his own words in the book:

Force [yourself] to create. Give [yourself] monthly, weekly, and even daily objectives to make sure that they produce immediately.

There are countless ways to do that. I’m building a service to help with real, tangible ways to make this possible but it won’t be critical to use that service. You can force yourself with your own objectives. You can give yourself some personal OKRs. You can build a system a’la the one featured in my review of Scott Adams’ book.

All it takes is hustle and time. Or so I tell myself.

It seriously takes this book, too. Read this book to see how a great leader made it happen through the Struggle of building something from nothing. In closing, I want to quote his final words because they really cut to the core of all this. He understands what you and I are facing, the effort to level up as managers, leaders, dreamers.

In closing, I just say peace to all those engaged in the struggle to fulfill their dreams.

Thanks, Ben. Here’s a link to his book on Amazon.

Mental Models and Principles

The simple existence of an alternate, plausible scenario is often all that’s needed to keep hope alive among a worried workforce.

If you are going to eat shit, don’t nibble.”

Artificial deadlines – Parkinson’s law – Michael Ovitz’s philosophy of deal-making

Find the “exciting value” for a customer

Markets weren’t “efficient” at finding the truth; they were just very efficient at converging on a conclusion—often the wrong conclusion.

I don’t believe in statistics. I believe in calculus.

There is always a move.

Managers must lay off their own people.

The correct way to view an executive firing is as an interview/integration process system failure.

Consensus-based hiring leads to decisions based on lack of weakness rather than presence of strength.

Spend zero time on what you could have done, and devote all of your time on what you might do.

Wartime vs Peacetime Leaders

Training is, quite simply, one of the highest-leverage activities a manager can perform.

Staff training must be mandatory.

Enforce management training by teaching it yourself. Managing the company is the CEO’s job.

Good product manager/bad product manager

Acting in an interim role is really the only way to get all the knowledge that you need to make a hire.

Write down the strengths you want and the weaknesses that you are willing to tolerate.

Management purely by numbers is sort of like painting by numbers—it’s strictly for amateurs.

Technical debt and management debt

Sometime an organization doesn’t need a solution; it just needs clarity.

Build strict processes for potentially political issues and do not deviate.

The following things that cause no trouble when you are small become big challenges as you grow:   Communication Common knowledge Decision making

The first rule of organizational design is that all organizational designs are bad. With any design, you will optimize communication among some parts of the organization at the expense of other parts.

The further away people are in the organizational chart, the less they will communicate.

Focus on the output first.

There is no such thing as a great executive. There is only a great executive for a specific company at a specific point in time.

Focus on the road, not the wall.

“Ones” vs “Twos” management framework

The first thing that any successful CEO must do is get really great people to work for her.

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

Be direct, but not mean. Don’t be obtuse. If you think somebody’s presentation sucks, don’t say, “It’s really good, but could use one more pass to tighten up the conclusion.” While it may seem harsh, it’s much better to say, “I couldn’t follow it and I didn’t understand your point and here are the reasons why.

As CEO, you should have an opinion on absolutely everything. Let people know what you think.

Embrace your weirdness, your background, your instinct. If the keys are not in there, they do not exist.