The Hard Thing About Hard Things by Ben Horowitz – Book Summary

Often, the hard things about opening a new company are not achieving success but dealing with failure. The hardest choices which we have to make are the ones we are unwilling to, and yet we are forced to. In this book, the author provides some personal examples. He shares anecdotes about the tough choices and decisions he had to make as an entrepreneur. As well, he offers advice to all the budding entrepreneurs who are inevitably going to face the same choices.

This book is semi-autobiographical in the sense that it is largely based on the author’s own life, both his personal and professional life. From there, he derives certain lessons and goes on to give some valuable advice to all aspiring leaders and CEO. This advice is not the generic kind of advice usually found in business and entrepreneurial books. But it is about what to do when things go wrong, and which hard choices to make.

 

1- Business Leaders Always Know How To Make Hard Choices In Hard Things

A CEO should always have a backup plan for when things go wrong. Since there is always a chance that things may go wrong. Leaders should always look at hiring people for their strengths rather than their lack of weaknesses.

The most important thing for any company is its employees. And all companies must strive to hire employees whose visions align with that of the company. Also, they should provide an excellent work environment for them. The environment encourages them to tackle the hard things smoothly.

A company needs to avoid politics, have people with clearly named titles, avoid people with high personal ambitions, and have a good company culture.

A CEO’s most important test comes when his company is in trouble. He should be able to keep a calm head and steer the company out of it.
Different times require different kinds of leadership.

 

2- Leaders Are Ready To Make Tough Calls When They Face Hard Things

Sometimes, things do go wrong for businesses. Leaders face hard times, hard things, and hard situations. In these times, it is vital to have a contingency plan. No matter how small the probability of a scenario happening is, a CEO should be ready for it. There is no set list of things that a CEO should do to be successful. Rather, he should be able to focus and think of the best move in the direst of situations. Often, things won’t go as planned; maybe there is a problem with the product, or you’re losing clients.

In these hard things, a CEO might begin to question himself, even gradually lose faith. It is important to remain steadfast, try to delegate the problem, think better, and always remember that challenges are going to be there forever, and he needs to deal with them.

Also, CEOs shouldn’t come off as being too soft or too positive; they have to be critical when they need to be. Many CEOs believe that their employees cannot handle bad news about the Company. But this is often false. Employees can take such news in their stride better than CEOs. Because it is not they, but the CEO who is generally held responsible for a Companywide crisis.

 

Critical Tough Calls For Employees

There are times when the leaders need to be critical of an employee. Then, it’s best to just tell it as it is rather than sugarcoat it. By not mincing words, you not only gain the trust of your team members. But also apprise them of the fact that a problem exists.

One of the most difficult things for any company to do is to lay off employees; CEOs need to do it the right way. First of all, the CEO should be able to think straight while making a decision. Once a CEO has made a decision, he should put it into execution immediately.

He should pass this news to employees by their immediate supervisors than by HR. Also, they need to be told that this is a failure of the company which is undergoing downsizing. And that they are excellent workers on their own. Things get even more difficult if you have to remove a personal friend who was there from the beginning but no longer fits in.

 

3- Taking Care Of & Training Employees Increases The Productivity

It is most important for a CEO to take care of his employees before anything else. First of all, he or she should make sure that the workplace is conducive to bringing about the full potential of the employees. In a good workplace, managers can communicate effectively with their employees. And employees can get the work done. In a bad workplace, communication is broken, and the team is rife with petty politics and infighting. Any company needs to have a good work environment.

Start-ups should also train their personnel. This is a practice often omitted by most tech start-ups, even though its benefits are clear. It improves the productivity of employees, allows easier performance management, helps in maintaining product quality while simultaneously maintaining a low attrition rate. The training course should comprise the specific job description of the specific employee. And it should not only be able to impart him of the necessary skills but also apprise him of the expectations. Ones that the company has from him.

 

4- Right Person At The Right Place

One of the most difficult jobs for any business is to hire good executives. There may be a temptation to hire an executive from a big company. However, the needs of a big company are very different from a start-up, and there is a chance of a mismatch, where things may go wrong. It is essential to screen for such mismatches. And also make sure that the new executive integrates well into the new business environment.

While hiring an executive, the most important lesson is to hire for strengths, not a lack of weaknesses. Every executive position should have certain desirable strengths; the new hire must have these. Also, as a trade-off, there are certain weaknesses that you should be able to tolerate; even if the new executive has these, provided he has the requisite strengths, you could look over these weaknesses.

It is also essential to hire employees with the right ambitions. Even a good employee with the wrong kind of ambition will be harmful to the company. Instead of aiming for their personal success and fulfilling personal targets, employees need to aim for what’s best for the company. Thus, it is important to screen for candidates who might be overtly self-centered and ambitious. Usually, these candidates take the entire credit of any major job done in their prior position, instead of crediting the team. Should avoid such candidates.

Initially, a business may not have employees with formal titles. However, as the company grows, it is important to confer these titles. First of all, employees need and value these titles. Secondly, these titles make it clear to an outsider who is whom. Further, there must be a clear and fair process of promotion to make sure that only competent people are in positions of responsibility.

 

5- Politics & Culture Can Make Or Break A Company

It is important not only to take care of the employees you hire but also to take care of the company as a whole. One of the major things which any start-up CEO (or for that matter, any CEO) should take care of, is to discourage politics in the company. For introducing politics, the CEO need not have to be political. In fact, corporate politics refers to advancing someone based on an agenda, instead of merit or contribution. CEO must not allow this. There should be a formal and justified policy of evaluation, compensation, and promotions. And everyone should follow this strictly.

It is also important for every company to have its own “culture.” The culture is a manifestation of the Company living out its core values. The company culture not only helps in attracting the right talent, but also helps in retaining them, and distinguishing it from its competitors. For example, the culture of employees being allowed to work on their own projects, independent of the Company’s agenda, is s defining culture at Google. Not surprisingly, this has led to loads of creative endeavors, some of which end up being backed by Google itself! The free and independent culture has led to Google being one of the pioneering icons of Silicon-valley.

Another example is the Video streaming behemoth Netflix. It has a policy of year-long maternity leave. They also have a no-questions-asked expense policy which fosters trust amongst employees. Along with such generous perks, they also have a high-performance culture despite the absence of traditional appraisals.

 

6- Keep Learning To Add New Skills To Your Portfolio

Are you a type one or two? Are you a visionary decision-maker or a sleeve rolled-up implementer?

Most leaders are either of the two types mentioned above. They either are good at making strategic decisions and can envision the future or are more comfortable at implementing the decisions of others rather than making the decisions themselves.

Most founder CEOs are type one, who is comfortable in taking strategic decisions that will shape the future of their Company. But they do not bother themselves in the implementation and in designing processes to execute. On the other hand, the CEOs who relish execution and designing processes and systems, are often uncomfortable in making strategic decisions that may make or break their Company.

The best CEOs and leaders have to incorporate both the qualities of type one and two. In other words, while being comfortable in making strategic decisions, the leaders also need to be able to design systems and processes which can help their organization execute.

Leaders can achieve this by being what is known as the functional ones. In your own area of expertise, be a type one, and make strategic decisions, while for overall corporate planning, focus on execution.

Hence, irrespective of whether you are a type one or a type two, you need to keep working to acquire and polish the skills which you do not have.

 

7- Different Times Demand Different Type Of CEOs To Cope With Different Hard Things

When your company is going strong, and there are already substantial advantages which you enjoy over competitors, you need not worry too much about survival. Hence, a CEO in this situation can focus on things like building a healthy culture in the Company, focusing and encouraging creativity amongst employees, and looking to build on strengths and expand the existing market. We may call such a CEO a peacetime CEO. Since he or she does not have to deal with the question of the survival of the Company.

For example, at Google, employees are encouraged to be creative and work on their own projects. Employees at Facebook too are encouraged similarly. Both these Companies enjoy strong positions in their respective fields, and immediate growth and survival are not things that these companies have to deal with.

Contrast this with a young tech startup, which has to challenge existing biggies and think of ways and means to outsmart them, all the while ensuring that it does not go bust! A CEO of such a Company would have to employ tactics that are similar to Wartime Generals.

 

What Is Wartime General?

“Wartime General” is a term often used in the military to distinguish between Generals. A peacetime General is more about keeping the system running smoothly and consolidating incremental gains. A Wartime general, on the other hand, is required to upset the status quo and look for unprecedented gains and also focus on Survival. Such a General’s decisions can win or lose a war for you.

In Business as well, some situations demand that the CEO act like a wartime General. These situations come as hard things in hard times. Such a CEO needs to focus on survival and is not concerned about incremental gains. He or she is looking to upset the status quo and win a huge share of the market by violating many accepted rules and practices.

The pace of work that he or she expects is hectic and all the resources are employed on a war footing to achieve the desired domination. The Wartime CEO is not concerned about trying to expand a market, he or she just wants to win the existing market. Plain and simple!

 

8- A True Leader Stays Calm & Objective And Thinks Independently

A CEO is ultimately a leader, and he should act like one. One of the most challenging things for any CEO is to manage his own self and his own psyche. This is especially true for first-time CEOs since they have no experience of the job before. They often sweat over the smallest details, and even if they are doing a good job, they are not aware of it. CEOs often have to take some very big decisions. And they have to take many of these decisions on their own. This is why CEOs often feel so much stress. CEOs should be able to calm down, think straight, and focus on the mission and not the obstructions.

One of the most important characteristics every CEO should possess is the courage to go against popular wisdom. If a CEO thinks that the decision he is about to take is the right one, he or she should take it even if others think that it is wrong. This takes much courage, since if he or she ultimately turns out to be wrong, then it would invite a lot of harsh criticism. However, they must remember that ultimately the buck stops with the CEO. And he or she should be responsible for all his decisions.

The CEO is the most important position in any company, and as such, the post comes with a lot of resulting scrutiny. It is important to be able to evaluate the CEO to know whether he or she is doing a good job or not. A CEO should know what direction the company should move in. And what he is going to get in that direction. He or she should be able to get the employees in line with the goals of the company.

 

Conclusion Of The Hard Thing About Hard Things

A CEO is the leader of the company, as such, he or she should have supreme leadership qualities. A CEO should be able to talk straight and not beat around the bush. He or she should avoid having an overly positive attitude, and always have a contingency plan for when things do not go right. A CEO should be able to take care of his employees by maintaining a healthy workplace environment. While recruiting executives, he should look for strengths, not a lack of weaknesses.

A CEO must at all costs avoid politics in the company. For this, there needs to be a robust and transparent promotion policy. He should hire the employees with the right ambition. And he should award formal titles to employees for clarity. Good and unique company culture should be developed which reflects the values of the company.