Today we are going to be unpacking some extracts from Ben Horowitz’ “The Hard Thing About Hard Things”, in particular the seventh chapter titled “the fine line between fear and courage.” Before we jump in, it’s worthwhile setting the stage and putting this into context. Currently, we’re going through an extremely tough and testing time for organisations big and small.
Unfortunately, small businesses are being hit particularly hard, and no doubt the leaders of those companies have had to make some extremely tough decisions. I admire their courage in making these decisions because more often than not, the right decision is the most difficult to execute. While this piece of content is directed more at managers and executive figures, there’s some important information for all members of an organisation to take onboard, perhaps to help the wider organisation or even refine your own leadership skills- so let’s jump in.
“In my experience as CEO, I found that the most important decisions tested my courage far more than my intelligence.” Ben Horowitz
Horowitz, a well-known Silicon Valley entrepreneur and successful startup founder cites the example of a familiar conversation he’s had with two co-founders of a start-up, one positioned as President and the other as the CEO. Both individuals run the company, both make the final decision and they don’t expect this to change. “So you’ve decided to make it more difficult for every employee to get work done so that you don’t have to decide who is in charge, is that right?” He asks. “Because the founders do not have the courage to decide who is in charge, every employee suffers the inconvenience of double approval,” which, particularly during a time of crisis can be disastrous in slowing down the momentum of your organisation. Is this something that relates to your own experience in any organisation, past or present that you’ve worked for?
“In my experience as CEO, I found that the most important decisions tested my courage far more than my intelligence,” he says, “the right decision is often obvious, but the pressure to make the wrong decision can be overwhelming.” Horowitz explains that “the clear and present social pressure often overwhelms the long-term benefits of organising the company properly.”
One point that we would like to add is that in the technologically-driven 21st century, data is absolutely your most effective weapon in combating uncertainty. In addition, consulting with every possible member of your staff that has a good understanding of the numbers to inform your decision making. While there’s a number of external factors that can sway a decision, data should remain the factor underpinning your decision making.
The author then goes on to explain the situation of a large company that has been approached with a handsome offer for an acquisition deal. “The founder/CEO (I’ll call him Hamlet) thought that selling did not make sense due to the giant market opportunity that he was pursuing, but he still wanted to make sure that he made the best possible choice for investors and employees. He wanted to reject the offer… To complicate matters, most of the management team and the board thought the opposite,” Horowitz adding that the management team had a significant amount more experience in business than Hamlet did. “In the end, Hamlet made the best and most courageous decision he could and did not sell the company. I believe that will prove to be the defining moment of his career,” Horowitz writes.
He adds that courage, like character, can always be developed through day-to-day experiences, and nowadays with abundant technology, tough decisions can be underlined by data-driven information and insights. “On the surface, it appears that if the decision is a close call, it’s much safer to go with the crowd. In reality, if you fall into this trap, the crowd will influence your thinking and make a 70-30 decision seem like a 51-49 decision. That is why courage is critical,” he concludes. Horowitz also plots out a small matrix of the social influences that can sway a tough decision, stating that if you decide against the crowd and you’re right, few people will remember that you made the decision and if the company succeeds it will be almost forgotten. On the other hand, if you decide against the crowd and you’re wrong, everyone will remember and you risk being ostracized from the crowd. If you decide with the crowd, however, and you’re right, everyone who advised you remembers the decision and the company succeeds, while if you’re wrong, you’ll receive minimum blame for getting it wrong, but the company still suffers.
“An effective leader will recognise that social pressures don’t amount to adequate, informed decision making… these are distractions that can detract from the right decision being made” Kobi Simmat
It’s important to remember that these considerations are always present while making a tough decision, whether the leader wants to admit it or not. The difference, however, is that an effective leader will recognise that social pressures don’t amount to adequate, informed decision making… these are distractions – admittedly, power ones – that can actually detract from the right decision being made for an organisation’s long-term viability.
At the beginning of the chapter, Horowitz quotes Cus D’amato, a renowned boxing coach who once said: “I tell my kids, what is the difference between a hero and a coward? What is the difference between being yellow and being brave? No difference. Only what you do. They both feel the same. They both fear dying and getting hurt. The man who is yellow refuses to face up to what he’s got to face. The hero is more disciplined and he fights those feelings off and he does what he has to do. But they both feel the same as the hero and the coward. People who watch you judge you on what you do, not how you feel.”
I believe there’s a valuable lesson for everyone in Cus’ quote, and the fact that your actions will speak louder than your words should be underpinned by informed, data-driven and rational decision making, not caving to social pressures that can often act to cloud your best judgement.