Thoughts on Ben Horowitz’s CEO Psychology Post

Last week Ben Horowitz of red-hot VC firm Andreessen Horowitz did an excellent post entitled What’s the Most Difficult CEO Skill? Managing Your Own Pyschology.

My favorite passage (edited):

Even if you know what you are doing, things go wrong. Things go wrong, because building a multi-faceted human organization to compete and win in a dynamic, highly competitive market turns out to be really hard.

If CEOs were graded on a curve, the mean on the test would be 22 out of a 100. This kind of mean can be psychologically challenging for a straight A student, particularly because nobody tells you that the mean is 22.  […]

Being responsible for everything and getting a 22 on the test starts to weigh on your consciousness.

What then, in the imperfect world that happens to be reality, is the job of the CEO?

  • To get everything perfect?
  • To get what matters right?

I am a huge believer in #2 — the job of the CEO is to get what matters right and, not to put too fine an point on it, the hell with everything else.

I didn’t always feel this way.  When I joined Business Objects in 1995 after spending a decade at two fairly broken companies, I expected that everything would be perfect.  I’d read the S-1 cover to cover.  The company was pristine:  5 consecutive years of profitable 100%+ compound annual growth.  70%+ license revenue contribution.  An amazing IPO lead by Goldman Sachs.  Finally, I thought, I’m going to work at a company that was perfect.

Boy, was I in for a surprise.  Without diving into details, on arriving I discovered that there were zillions of things wrong at Business Objects (e.g., think:  version 4.0).  It was then that I realized it.  Business isn’t about perfection.  It is about getting what matters right. And, boy, was Business Objects good at that.

It’s not about the 22 overall grade.  It’s about getting 100 on the 20% of things that really matter.  This, of course, begs the question “what matters?” which is a question of strategy and one that I’ve already written about here.

The other reason I believe CEOs should focus on getting what matters right (as opposed to everything perfect) is a simple matter of pragmistism.  It is impossible to “focus” on getting everything perfect.  Everything never will be perfect.  CEOs who try to make everything perfect will die trying and probably kill their teams along the way.  In some ways, perfecting everything is a form of avoidance of the really hard question (“what matters?”) as opposed to the easier questions of “what do I know how to do?” and “what’s broken that I can fix?”

It’s easy to find things broken at any company.  The hard part is figuring out what matters and then making those few, strategic things work.  You might get a 22 overall.  But you should get it by scoring 100 on the 20% of the test that matters and 2 on the other 80%.

Doing the inverse is what one friend aptly calls “polishing shoes in the ER.”

2 responses to “Thoughts on Ben Horowitz’s CEO Psychology Post

  1. Hi Dave,

    Nice article, I’d like to hear even more on this subject. BTW there is a typo in pragmatism.

  2. I wonder who could be the closest example of an 100? Steve Jobs? Bill Gates? Rupert Murdoch? What about the SMB CEOs that run a fairly smooth and steady operation.

    I do love your point about getting what matters right. Easy to say, hard to do and I’m not even a CEO. :)

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