The Hard Thing About Hard Things: Building a Business When There Are No Easy Answers

By far the most difficult skill I learned as CEO was the ability to manage my own psychology. (View Highlight)

Given this stress, CEOs often make one of the following two mistakes:

In your darkest moments as CEO, discussing fundamental questions about the viability of your company with your employees can have obvious negative consequences. On the other hand, talking to your board and outside advisers can be fruitless. The knowledge gap between you and them is so vast that you cannot actually bring them fully up to speed in a manner that’s useful in making the decision. You are all alone. (View Highlight)

The problem with psychology is that everybody’s is different. With that as a caveat, over the years I developed a few techniques for dealing with myself. I hope you find them useful, too.

Interestingly, most management books describe peacetime CEO techniques and very few describe wartime. (View Highlight)

Peacetime CEO knows that proper protocol leads to winning. Wartime CEO violates protocol in order to win.

Most people actually assume the opposite—CEOs are born, not made. I often listen as other venture capitalists and board members rapidly evaluate a founder and conclude that she’s not “CEO material.” I am not sure how they figure these things out so fast. It generally takes years for a founder to develop the CEO skill set and it is usually extremely difficult for me to tell whether she will make it. (View Highlight)

Being CEO requires lots of unnatural motion. From an evolutionary standpoint, it is natural to do things that make people like you. It enhances your chances for survival. Yet to be a good CEO, in order to be liked in the long run, you must do many things that will upset people in the short run. Unnatural things. (View Highlight)

Giving feedback turns out to be the unnatural atomic building block atop which the unnatural skill set of management gets built. (View Highlight)

To become elite at giving feedback, you must elevate yourself beyond a basic technique like the shit sandwich. You must develop a style that matches your own personality and values. Here are the keys to being effective:

Sadly, little of this analysis that’s been done benefits CEOs, since most of the discussions happen behind their backs. Here I want to take a step in the opposite direction. By describing how I evaluate CEOs, I am at the same time describing what I think the job of the CEO is. Here are the key questions we ask:

One should interpret this question as broadly as possible. Does the CEO know what to do in all matters all the time? This includes matters of personnel, financing, product strategy, goal sizing, and marketing. At a macro level, does the CEO set the right strategy for the company and know its implications in every detail of the company?

The CEO must set the context within which every employee operates. (View Highlight)

Some employees make products, some make sales; the CEO makes decisions. Therefore, a CEO can most accurately be measured by the speed and quality of those decisions. Great decisions come from CEOs who display an elite mixture of intelligence, logic, and courage. (View Highlight)

If the CEO paints a compelling vision and makes fast, high-quality decisions, can she then get the company to execute her vision? The first ingredient in being able to do this is leadership, as I outlined in the section “Follow the Leader.”

Netflix’s CEO, Reed Hastings, put great effort into designing a system that enables employees to be maximally effective. His presentation of this design is called Reference Guide on Our Freedom and Responsibility Culture. It walks through what Netflix values in their employees, how they screen for those values during the interview process, how they reinforce those values, and how they scale this system as the number of employees grows. (View Highlight)