- Startup founders are bracing themselves to survive the turmoil created by the coronavirus pandemic, sending employees home and threatening to dry up funding.
- As startup founders prepare to adapt to a fast-changing environment, a 2011 blog post by Ben Horowitz, one of the founding partners of Silicon Valley's Andreessen Horowitz, has resurfaced.
- The post describes fundamental differences between a CEO best-suited to steer the company during times of peace and times of war.
- Business Insider listed 10 ways in which these differences can form a playbook for startup leaders looking to survive a possible recession.
- You can read the full post here.
- Visit Business Insider's homepage for more stories.
Silicon Valley is bracing itself for a reckoning, as the coronavirus pandemic has thrown markets into turmoil, forced companies to go remote, and threatens to dry up VC funding.
And as startup founders prepare themselves for a period of existential threat, a 9-year-old blog post titled "Peacetime CEO/Wartime CEO" by Ben Horowitz, one of the founders of Silicon Valley's Andreessen Horowitz, is suddenly everywhere.
Andreessen Horowitz partner Andrew Chen tweeted that he overheard someone say "Now everyone's a wartime ceo. You have no choice." But he wasn't alone - several startup founders and investors shared the post, commenting that it was more relevant than ever.
Horowitz didn't write the post during a time of economic crisis - it was written in 2011, back when Eric Schmidt had stepped down as Google's CEO and Larry Page took over. Horowitz argued that the news represented a profound change for Google, one that would take it from peacetime to war as Larry Page prepared to revitalize the company and take on Facebook.
But the post painted a broader management philosophy. Horowitz laid out the characteristics of two types of CEOs - there's the "peacetime" CEO, best poised to expand an already-dominant company's business and guide it during times where it faces little challenge. Google's expansion under the tenure of Eric Schmidt, as the "clear market leader" in search was the perfect example of a peacetime CEO, Horowitz said.
And then there's the "wartime" CEO, who steers the company when it is fending off an existential threat, be it competition, market change, or a "dramatic macro economic change," much like the coronavirus pandemic threatens to force. Think Steve Jobs, when he returned to Apple and rescued it from the brink of bankruptcy in the 1990s, Horowitz said.
It's difficult, though possible, to master the skillsets of both CEOs, according to Horowitz. "Mastering both wartime and peacetime skill sets means understanding the many rules of management and knowing when to follow them and when to violate them," he wrote.
In fact, Horowitz himself said he spent nine months as a peacetime CEO and was a wartime CEO for the next seven years. But he argued that his skillset was much more tailored for being a wartime CEO, writing, "One could easily argue that I failed as a peacetime CEO, but succeeded as a wartime one."
That being said, some of the differences that Horowitz highlighted can lay out a playbook for a CEO preparing to adapt their management strategy for war. Business Insider picked out 10 differences that may have the most impact.
You can read the full post here.
A wartime CEO isn't worried breaking the rules:
Horowitz seems to describe a "move fast break things" ethos typically associated with Facebook, as he writes, "Peacetime CEO knows that proper protocol leads to winning. Wartime CEO violates protocol in order to win."A wartime CEO micromanages.
Steve Jobs famously had an obsessive attention to detail, pouring over every little aspect of Apple's product designs. Horowitz attributes that level of attention to the wartime CEO, someone who is concerned with everything happening at their company. "Peacetime CEO focuses on the big picture and empowers her people to make detailed decisions. Wartime CEO cares about a speck of dust on a gnat's ass if it interferes with the prime directive," Horowitz wrote.A wartime CEO is prepared to hire and fire workers with equal ease.
A wartime CEO can't afford to be carrying an oversized workforce when the company is fighting to survive. Horowitz writes, "peacetime CEO builds scalable, high volume recruiting machines. Wartime CEO does that, but also builds HR organizations that can execute layoffs."A wartime CEO doesn't spend time defining the company's culture
Horowitz writes that the existential threat driving the CEO's management should also drive the company: "Peacetime CEO spends time defining the culture. Wartime CEO lets the war define the culture."A wartime CEO is never satisfied.
Earlier in the post, Horowitz discusses former Intel CEO Andy Grove as one of the classic wartime CEOs. This particular difference appears to be inspired by Grove's highly popular management book, "Only the Paranoid Survive," as Horowitz writes, "peacetime CEO knows what to do with a big advantage. Wartime CEO is paranoid."A wartime CEO is constantly on the alert to fight off competition
"Peacetime CEO thinks of the competition as other ships in a big ocean that may never engage. Wartime CEO thinks the competition is sneaking into her house and trying to kidnap her children," Horowitz writes. His statement refers to the different worlds in which a peacetime and wartime CEO operate - a place of competitive advantage and a growing market, versus a place where a company is fighting to survive.A wartime CEO has a "winner-take-all" mindset
In times of peace, a company is already dominant - all it needs to go is keep growing. But a wartime CEO is leading the company's fight to get ahead of competitors and grow its share of the market. Horowitz alludes to that fundamental difference, writing, "Peacetime CEO aims to expand the market. Wartime CEO aims to win the market."A wartime CEO requires everything to be followed exactly according to plan
Not only does a wartime CEO have an obsessive attention to detail but they also are not understanding of deviations from the plan, according to Horowitz.
"Peacetime CEO strives to tolerate deviations from the plan when coupled with effort and creativity. Wartime CEO is completely intolerant," he wrote.A wartime CEO isn't thinking about management strategy
As Horowitz earlier points out, management strategy books are often written in times of peace rather than times of crisis, leaving a distorted picture of leadership strategies available to company leaders fighting to survive. In a snide aside to these books, Horowitz writes, "peacetime CEO sets big, hairy audacious goals. Wartime CEO is too busy fighting the enemy to read management books written by consultants who have never managed a fruit stand."A wartime CEO is concerned with training employees for battle, not career development
A company fighting an existential threat doesn't have time handhold employees, according to Horowitz.
"Peacetime CEO trains her employees to ensure satisfaction and career development. Wartime CEO trains her employees so they don't get their ass shot off in the battle," he wrote.
OH: "now everyone's a wartime ceo. You have no choice"
- Andrew Chen (@andrewchen) March 12, 2020The audiobook for "The Hard Thing About Hard Things" by @bhorowitz is free on Audible with a 30-day trial. Probably the most timely book for CEOs/fund managers, from the offer of this seminal post: https://t.co/YA4meGF86j
- Semil (@semil) March 16, 2020It's Wartime CEO timehttps://t.co/UMnkWuCnlu
- Andrew Wilkinson (@awilkinson) March 16, 2020