There are times that a leader needs to wear a different hat to ensure their organisation can weather the storm; let’s talk about the peacetime and wartime model of leadership.
In light of the recent economic shake-up, we’re going to turn to Ben Horowitz, the author of “The Hard Thing About Hard Things”, a particularly relevant book considering recent events. The book centers on how to build a business when there are no easy answers, and how to maintain momentum in the face of a changing business landscape. Ben Horowitz was the co-founder and CEO of Opsware, a venture-capital firm that was acquired by Hewlett-Packard for $1.6 billion. He’s endured peacetime in business, as well as wartime, and he’s an expert on navigating the landscape as an entrepreneur and business owner.
There’s a chapter in his book titled the “peacetime CEO/wartime CEO”, Horowitz recalls a time that a colleague told him that he was a great CEO because he acted as both a peacetime and a wartime leader. “By my calculation,” he writes, “I was a peacetime CEO for three days and a wartime CEO for eight years.” Horowitz contrasted the two leadership styles of Google’s founders, Larry Page and Eric Schmidt, each of which wore a different helmet: Schmidt acting as Google’s peacetime chief executive, with Larry Page on the other side of the fence, taking the helm as the company’s wartime CEO.
“Success breeds complacency. Complacency breeds failure. Only the paranoid survive.”
“Peacetime in business means those times when a company has a large advantage over the competition in its core market, and its market is growing,” writes Horowitz. “In times of peace, the company can focus on expanding the market and reinforcing the company’s strengths.”
In wartime, however, “a company is fending off an imminent existential threat. Such a threat can come from a wide range of sources, including competition, dramatic macroeconomic change, market change, supply chain change, and so forth. The great wartime CEO, Andy Grove, who headed Intel once said that “success breeds complacency. Complacency breeds failure. Only the paranoid survive.” This goes to show his working mindset that was centered in the belief that any organisation that becomes too complacent is set to be usurped by a competitor, or destroyed by macroeconomic factors. Horowitz contrasts Google’s peacetime mission of making the internet faster and more accessible with Grove’s wartime mission to get Intel out of the memory business, responding to threats appearing in the landscape from Japanese semiconductor companies. “In this mission, the competitive landscape was so great that Intel had to exit its core business, which employed 80 percent of its staff,” he writes. This was a remarkable pivot for the company, and a wartime decision that acted to steer Intel’s ship to clearer waters.
“In peacetime,” Horowitz continues to explain, “leaders must maximize and broaden the current opportunity. As a result, peacetime leaders employ techniques to encourage broad-based creativity and contribution across a diverse set of possible objectives”
“In wartime, by contrast, the company typically has a single bullet in the chamber and must, at all costs, hit the target. The company’s survival in wartime depends upon strict adherence and alignment to the mission,” he writes. The author cites an example of Steve Jobs, who returned to the helm of Apple when the company was in dire straights. “He needed everyone to move with precision and follow his exact plan; there was no room for individual creativity outside the core mission.”
The following is an abstract from page 226-277 of The Hard Thing About Hard Things, where Horowitz examines the divergence of leadership styles between the peacetime and wartime leader.
A Peacetime CEO:
- Knows that protocol leads to winning, while a wartime CEO violates protocol in order to win.
- Focuses on the big picture and empowers their people to make detailed decisions; a wartime CEO cares about a speck of dust on a gnat’s ass if it interferes with the prime directive.
- Builds scalable, high-volume recruiting machines; a wartime CEO does that, but builds HR organisations that can execute layoffs.
- Spends time defining the culture; a wartime CEO lets the war define the culture
- Always has a contingency plan; wartime CEOs know you have to roll a hard six.
- Knows what to do with a big advantage, while a wartime CEO is paranoid
- Thinks of the competition as other ships in a big ocean that may never engage, while a wartime CEO thinks the competition is sneaking into her house and is trying to kidnap their children.
- Aims to expand the market, while a wartime CEO aims to win the entire market.
- Strives for broad-based buy-in; a wartime CEO neither indulges consensus builder nor tolerates disagreements.
We’re entering an uncertain period with tough times certainly to come. It’s my hope that if leaders in the business world can wear their wartime hats in the near future, some crucial decisions will be made to help prevent the economic fall-out and we can begin to plan on capitalising on the greener pastures on the horizon.
For now, stay safe, and I’ll see you in the next piece.