Ben Horowitz on Executive Firing (and Hiring) | Summary and Q&A

TL;DR

Finding product-market fit brings its own challenges, including the need to scale quickly and find the right leaders. Hiring and firing executives plays a crucial role in the growth and success of a company.

Key Insights

• 🗯️ Scaling a company quickly after finding product-market fit requires finding the right leaders who can effectively manage growth and navigate complexity.
• ❤️‍🔥 Hiring and firing executives should be done with careful consideration of their fit within the company's culture and their ability to drive growth.
• 👶 Building a successful organization involves integrating new leaders effectively and providing ongoing support and guidance.
• ❤️‍🔥 Culture plays a significant role in hiring and firing executives and should be considered as a crucial factor in assessing fit.
• 🗯️ Starting the hiring process early and conducting thorough assessments, including backdoor reference checks, can help ensure the right executives are hired.
• 😤 Firing executives should be approached with transparency and fairness, while also considering the impact on the team and the company as a whole.

Transcript

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Questions & Answers

Q: What are the challenges of scaling a company quickly after finding product-market fit?

Scaling a company quickly requires finding the right leaders who can effectively manage the rapid growth and complexity of the organization. It also involves transitioning from a small team to managing a larger organization, which can present its own challenges.

Q: How does hiring and firing executives impact a company's growth and success?

Hiring the right executives is critical for driving growth and ensuring the success of a company. Conversely, keeping executives who are not a good fit can hinder the company's progress. Firing executives should be done carefully and with transparency, considering both the individual's performance and the impact on the team.

Q: What role does culture play in hiring and firing executives?

Culture is an important factor in assessing the fit of executives within a company. Hiring executives who align with the company's values and culture can contribute to their success in driving growth. Firing executives who do not align with the culture can protect the integrity of the company and maintain team morale.

Q: How can companies ensure the success of new leaders during the integration process?

Providing support and guidance to new leaders is essential for their success. This includes regular check-ins, open communication, and setting clear expectations. A strong onboarding process can help new leaders understand the organization's goals, culture, and their role within the company.

Summary

Finding product-market fit brings its own challenges, including the need to scale quickly and find the right leaders at the right time. In this podcast, a16z co-founder Ben Horowitz and databricks co-founder and CEO Ali Godsey discuss hiring and firing executives, from recognizing when an executive has outgrown their role to giving them a chance to grow and succeed. They also talk about the importance of honesty in conversations about performance, the impact of a new executive on company culture, and how to ensure their success.

Questions & Answers

Q: How does finding product-market fit bring its own challenges?

Finding product-market fit brings the challenge of needing to scale quickly and find the right leaders at the right time.

Q: What is one of the hardest aspects of scaling a company quickly?

One of the hardest aspects of scaling quickly is finding the right leaders to support the growth.

Q: How does scaling quickly at a small company differ from scaling quickly at a larger company?

Scaling quickly at a small company means growing the team by a factor of 5x, while scaling quickly at a larger company can cause the company to "blow up" if not managed properly.

Q: What is the biggest challenge for a large corporation when reaching a certain level of scale and complexity?

The biggest challenge for a large corporation at scale is finding leaders who can effectively manage the complexity and growth of the company.

Q: What has the growth team at a16z been working on for the past year?

The growth team at a16z has spent the past year gathering insights from leaders across the firm and late-stage startups to create a comprehensive book on hiring executives at scale.

Q: What are some of the topics discussed in the podcast?

In the podcast, Ben Horowitz and Ali Godsey discuss hiring and firing executives, including the most common reasons for executive failure, the importance of micromanagement in certain situations, and the difference between someone who has written a playbook and someone who has only run one.

Q: What organizations has Ben Horowitz scaled in the past?

Ben Horowitz has scaled up several organizations in the past, including loud Cloud, which went public in 2001.

Q: How has Ali Godsey scaled databricks since taking over in 2016?

Ali Godsey has scaled databricks to over 5500 employees since taking over as CEO in 2016.

Q: How do you recognize when an existing leader has been outgrown?

One way to recognize that an existing leader has been outgrown is when you start asking others for their opinions on whether the leader is the right person for the job.

Q: What are some signs that an executive is not the right fit for the role?

Signs that an executive is not the right fit for the role include getting emotional when given a task, not adding value or taking on new ideas, and being a poor communicator or lacking important skills.

Q: Is it possible for someone to be a good fit for a new role after struggling in a previous one?

Yes, it is possible for someone to be a good fit for a new role after struggling in a previous one, especially if they have a superpower or strength in a particular area that can be leveraged in the new role.

Q: When is it appropriate to give someone a chance to grow in a new role?

It is appropriate to give someone a chance to grow in a new role when they have a superpower or strength that can be accentuated in the new role and their weaknesses can be patched up.

Q: What are some common causes for people running out of gas in a role?

Some common causes for people running out of gas in a role include not understanding the new job responsibilities after a promotion, the company outgrowing them, or personal issues affecting their performance.

Q: How does confidence play a role in an executive's success?

Confidence is important, and once an executive starts feeling like things are not working and they are on the backfoot, it becomes harder for them to turn things around and regain confidence.

Q: What happens if an executive loses the support of their team?

If an executive loses the support of their team, it becomes difficult for them to continue in their role, no matter how much they are liked or valued by the company. It may be better for them to start fresh somewhere else.

Q: When should you give someone a chance to grow in a new role?

Giving someone a chance to grow in a new role depends on identifying their superpower or strength and assessing if they can be given additional support to patch up their weaknesses while leveraging their strengths.

Q: How does background and knowledge of the company versus knowledge of the industry impact executive hiring decisions?

In engineering and product roles, knowledge of how the company works is valuable, but in sales and marketing roles, knowledge of how other companies in the industry work is more valuable. Hiring someone with only knowledge of the company may limit their ability to effectively navigate the industry.

Q: Is it possible to switch an executive back to a role that they were more successful in, or is it better to part ways?

It is possible to switch an executive back to a role that they were more successful in, especially if they were a highly-effective individual contributor before moving into management. This can allow them to continue adding value and make better use of their superpower or strength.

Q: How should the conversation be approached when an executive is not meeting expectations?

The conversation with an executive who is not meeting expectations should begin with honesty and a focus on the truth. Starting from a place of honesty and acknowledging partial responsibility can lead to a more productive conversation.

Q: How can the conversation about performance be framed to facilitate a more effective discussion?

Instead of focusing on listing all the areas where someone has fallen short, the conversation should start with an open question about how they think things have been going. This allows the other person to reflect on their performance and can lead to a more truthful and productive conversation.

Q: What is the importance of honesty in performance conversations?

Honesty is essential in performance conversations because lying to oneself or the other person prevents the truth from being addressed. It is important for a CEO to be honest with themselves and the executive to have a productive conversation and determine the best course of action.

Q: How should a CEO approach the conversation about performance with an executive who is not meeting expectations?

The conversation should start with acknowledging shared responsibility and discussing observations about the executive's performance. It should be approached from a place of honesty and a focus on finding the best solution for both parties.

Q: How does the CEO's approach to the conversation impact the outcome?

If the CEO approaches the conversation with a focus on objective facts and a desire to find the truth, rather than being emotional or defensive, it creates a more open and productive environment for both parties to address the issue.

Q: How should the CEO handle compensation and support after parting ways with an executive?

The CEO should be as generous as possible within reason when it comes to compensation and support after parting ways with an executive. Taking care of them financially and offering support in finding their next job can go a long way in maintaining a positive relationship.

Q: What is the benefit of being generous in compensation and support after parting ways with an executive?

Being generous in compensation and support after parting ways with an executive can maintain a positive relationship and make it easier to fire the next person if necessary. It also shows respect and takes into account the CEO's responsibility for the hiring decision.

Q: How can a CEO ensure the success of a new executive?

A CEO can ensure the success of a new executive by setting clear expectations, providing support and training, and maintaining close communication. Regular check-ins and daily conversations can help build trust and understanding between the CEO and the executive.

Q: How should a CEO manage a new executive who needs to adjust to the company's culture?

A CEO should first help the new executive assimilate into the company by setting expectations and providing support. They should also ensure that the executive understands the company's culture and works towards fitting in before implementing any major changes.

Q: How does failure help with cultural change and acceptance of new leaders?

Failure humbles a company and makes them more open to change. When a company is facing challenges and needs help, they are more likely to embrace new leaders and their ideas.

Q: How does failure play a role in accepting the need for change?

Failure serves as a wake-up call and highlights the need for change. It humbles a company and makes them more open to new ideas and approaches.

Q: How did dababricks embrace cultural change when shifting from an engineering-centric to a sales-focused organization?

Databricks recognized the need for change and embraced it after facing challenges with revenue growth. They combined their existing open-source software approach with the expertise and culture of a sales-driven organization to create a culture that valued both approaches.

Q: How can a CEO prevent a new leader from bringing incompatible aspects of their previous company's culture into a new organization?

The CEO needs to ensure that the new leader assimilates into the culture of the organization and understands the existing values. It is important to set clear expectations and encourage the new executive to embrace and work within the existing culture.

Q: How should a CEO handle the assimilation of a new leader into the existing culture?

The CEO should ensure that the new leader understands the company's culture and slowly integrates into it. Encouraging the new leader to succeed within the existing culture before implementing any major changes is important.

Q: How does the CEO's approach impact cultural change within the organization?

The CEO's embrace of cultural change and facilitation of the assimilation of new leaders into the existing culture helps foster a positive environment for change. This approach encourages teamwork and acceptance of new ideas and approaches.

Q: What is the impact of a new leader on an organization and its culture?

A new leader can have a significant impact on an organization and its culture. The leader's actions, values, and decisions can influence the company's direction and the behavior of its employees.

Q: What should a CEO want the impact of a new leader to be on the organization and its culture?

A CEO should ideally want a new leader to positively influence the organization and its culture by bringing new ideas, expertise, and a fresh perspective. The new leader should align with the company's values while also bringing their own unique strengths and experiences.

Q: What should a CEO not want the impact of a new leader to be on the organization and its culture?

A CEO should not want a new leader to negatively impact the organization and its culture by being resistant to change or imposing incompatible values and practices. The new leader should assimilate and work within the existing culture while bringing positive change and growth.

Takeaways

The process of hiring and firing executives is an essential part of scaling a company, but it comes with its own challenges. Recognizing when an existing leader has been outgrown and addressing their performance issues is crucial for sustained growth. Giving executives a chance to grow in new roles, while also being honest about their strengths and weaknesses, can create opportunities for success. Ensuring the success of a new executive requires setting clear expectations, providing support and training, and maintaining close communication. Cultural change can be facilitated by embracing failure, being open to change, and assimilating new leaders into the existing culture. Handling conversations about performance with honesty and respect and being generous in compensation and support after parting ways fosters positive relationships and maintains company reputation. Ultimately, the impact of a new leader on an organization and its culture depends on their ability to align with existing values and bring positive change.

Summary & Key Takeaways

• Scaling a company quickly after finding product-market fit is a challenging process that requires finding the right leaders at the right time.

• Successfully scaling a company involves transitioning from being a small team to managing a large, complex organization.

• Hiring and firing executives can be a difficult process, and it requires careful assessment of their fit within the company's culture and their ability to drive growth.