The Most Difficult CEO Skill? Managing Your Own Psychology (2011)

http://bhorowitz.com/2011/04/01/what%E2%80%99s-the-most-difficult-ceo-skill-managing-your-own-psychology/

by 001sky • 14 years ago

155 33 14 years ago

bhorowitz.com

ccollins• 14 years ago

Previously discussed on HN 535 days ago, still a good article:

http://news.ycombinator.com/item?id=2396120

001sky2• 14 years ago

Edited the title to (2011).

bane6• 14 years ago

I've been a co-founder a couple of times, but never a CEO. At one startup (not a co-founder, but was around it before it started), we took on a new CEO (new to us, first time CEO to him) to try and get the company directed the right way. For a time we did. About a year after that we hit a snag and things started going south.

Sometime during all of this the CEO took a pay cut, and then simply checked out (BAD BAD BAD). We ended up in a crisis and with nobody at the helm to guide us through it the crisis got worse. Executive decisions were made, but without a corporate officer to direct liability to, things were very "sketchy". Eventually it got so bad the investors decided to sell the company off and recoup what they could, but needed the CEO to stay on for some legal reasons -- they gave him no pay, he provided no interaction with anybody in the company. It was beyond unpleasant.

Talking with him later on he admitted he was embarrassed things had gone the way they did, but justified his behavior that half pay means half time and no pay means no time. There was some realization that with a few simple decisions early on (when it was just a snag) probably would have resulted in no pay cut and full time, plus a graceful exit. But hindsight is 20/20 and it's an experience that he and the management learned tremendously from.

TL;DR The real problem was that when times were good, he was the captain of a proud, well run sailing ship at full sail. When we ended up in a storm, his psychology told him to take cover, even as the ship sank into the abyss.

brandnewlow• 14 years ago

No need to add identifiable details, but what sorts of things were part of "we hit a snag and things started going south."

I can imagine someone checking out in the ways you describe, but only in the face of mind-melting obstacles, the kind that cause people to lose all hope and throw in the towel once spotted.

bane6• 14 years ago

A lot of it was just execution problems. But I think it summarizes into a perfect storm of moving the development team to a new product and putting the existing money maker on bug fix only, two rounds of dedicated sales staff that woefully underperformed (sometimes comically so looking back), and the landscape of paying customers going into insecure funding situations of their own.

On those points:

1- Moving the staff to another project was a tough call, but one I think I would have made in the CEO's position, it just was a gamble that didn't work out as well as we were hoping as it took new product iterations off the shelf for too long. But while the old product was keeping the lights on, its growth curve wasn't going to get us to where we needed to be.

2- I'm actually interested in HN's ideas on hiring good sales/marketing staff and how they should best be managed. Across half a dozen companies now I've failed to really find good competent sales people and any effective way of managing them without getting in their way. It's just a very hard position to hire for -- hiring engineering is a piece of cake in comparison. I think if I were CEO of a small startup, sales people would be hired on 90 day probationary periods. But I've heard counter arguments that sales folks in my vertical really require 6-9 months to build out their sales pipeline and start seeing results. However, some of the issues were stupid, like not answering phone calls or failing to handle simple contract negotiations without blowing the deal, or not wanting to manage contract staff to execute on part of the sale and simply moving on to other opportunities.

3- The customer situation was a surmountable obstacle I think by expanding the size of the sales net we were throwing out there. There were several related markets with better funding sources we could have gotten into that we didn't take seriously until it was too late. We also had some immediately good opportunities that got bungled because of #2 above and because the margins weren't as good as other opportunities that we chased instead and failed capitalize on anyways.

hkmurakami• 14 years ago

>justified his behavior that half pay means half time and no pay means no time.

Am I misguided to think that people who use this as an excuse would never work twice as hard / twice as long when given twice the pay?

davorak• 14 years ago

How often do you hear of people getting a significant raise and then handing some back because they do not think work enough or hard enough to earn it?

dscrd• 14 years ago

I think you might be misguided in thinking that people should work twice as hard or as long. Isn't the most important factor how much and what they're putting out?

ChuckMcM• 14 years ago

I'll relate a similar anecote; dot com exploding crisis in the board room, frozen management. I reached out to Scott McNealy and asked how at Sun we had hit rough times and it got painful but it never got stuck. His response changed my whole take on things. He said,

"Chuck nobody knows what they are going to be when the chips are down, they can think they will be a tiger but they sometimes they discover they are the deer, and stare transfixed at the headlights. The best you can do is test people early to get a sense of how they respond and move the ones who can't act in a crisis into safer jobs."

I have found this to be very accurate advice. People who you wouldn't think would freeze up can (and do) and people who you felt were meek and softspoken can suddenly stand up and take charge. Its the fight-or-flight instinct and its wired in the part of the brain you don't have a lot of control over. It sounds like your CEO friend discovered he couldn't take the pressure and ran. It can be a shameful place for a proud person, it has driven people to suicide. Understanding that its not under your conscious control can help.

bane6• 14 years ago

A really excellent insight. It's amazing how people take on entirely new mantles when things get tough, and you just simply can't predict that that will look like.

It reminds me of the Mastermind Rational role variant in the Keirsey Temperament Sorter [1]. A personality type that doesn't want to lead, but when crisis hits and they feel leadership has let them down, will take charge and get shit done. It's a good kind of reserve person to keep in the wings I think.

I don't know of a corollary for the opposite though, who want to lead, but shut down at the first sign of trouble -- even though it seems to be a favorite archetype of writers.

[1] http://en.wikipedia.org/wiki/Mastermind_(role_variant)

lionheart• 14 years ago

I don't think anything is 100% hardwired. Sure you probably start with a mental preference for one or the other but you can change it.

Now the question is: how?

How do you expose yourself to these kinds of situations gradually so that you have a chance to get used to it?

lifeisstillgood2• 14 years ago

Reading this I think the CEO is only half of the problem - the board / ownership decided to give him a pay cut, then take pay from him entirely.

Come on. If you don't trust someone enough that you cut their pay, then really you should just fire them and get someone else in - the mixed signals are what killed this place.

bane6• 14 years ago

I'm split on this myself. Devil's advocate, siding with the board he failed to make his goals during that time period and he also had opportunity to simply leave himself.

I think he was hedging that he would have been able to raise more VC to get through the snag, and when that didn't work It didn't appear there was a plan B.

Grovara123• 14 years ago

Amazing write up - quite informative - interesting how non-CEO's do not understand and greatly underestimate the value a good CEO brings to the equation.

It's easy to talk about the CEO when he is not listening or present... but they can't imagine the work behind the scenes.

bpatrianakos2• 14 years ago

Most difficult CEO skill? That's a life skill. Not to dismiss how hard it must be to be a CEO because I couldn't imagine it but those lessons apply everywhere. Replace the word CEO with the word life and you have an article about how to manage the stress of everyday life.

Edit: I really really don't want to sound dismissive, that's really not the intent.

sliverstorm• 14 years ago

Just because something is a crucial life skill doesn't mean it can't also be a critical CEO skill, or any other job-skill for that matter.

bpatrianakos2• 14 years ago

Like I said, I wasn't saying that. I wasn't being dismissive. I was just observing that this is a skill that applies very broadly. I read it, got it, liked it, then thought "hey, that actually applies everywhere". It's not a knock against the author or the article. Just my reaction.

hasenj• 14 years ago

As a developer I also find my psychology difficult to manage ..

tomasien• 14 years ago

Most difficult CEO skill? Raising money.

Seriously, have without a HUGE network or traction/lots of revenue it's almost statistically a miracle to make it happen.

Great article though, just pointing out the obvious.

001sky2• 14 years ago

Relevant: Author's job is handing out the money

http://bhorowitz.com/about/

yeoldestuff2• 14 years ago

At first I thought this title said "The Most Difficult SEO Skill?"

I was thinking someone's conscience finally caught up with them. Only to discover this is just more Internet VC gibberish. Oh well.

buu700• 14 years ago

VC gibberish? I found this to be pretty insightful, and valuable life advice in general.

yeoldestuff2• 14 years ago

You are getting valuable life advice from an internet venture capitalist? I will say a prayer for you.

mduerksen• 14 years ago

As a side note, the picture at the end shows the last second of the great fight between Diego Corrales and José Luis Castillo[1][2].

Round 10: After being knocked down twice and hardly beating the clock, Corrales turns the match, traps his opponent against the ropes and causes the referee to end the fight.

[1] http://en.wikipedia.org/wiki/Diego_Corrales_vs._Jose_Luis_Ca...

[2] http://www.youtube.com/watch?v=imZaiGJgbsw

gadders• 14 years ago

And then poor old Corrales dies in a motorbike crash in Vegas :-(

rehack• 14 years ago

"If you focus on the wall, you will drive right into it. If you focus on the road, you will follow the road. Running a company is like that. " and “I didn’t quit.”

I am going to engrave the above mentioned quotes in gold* and put it on my wall.

* - Or just have my young kid write it with a pencil on a paper and put it on my wall.

kirse• 14 years ago

Haha, it's a great life lesson no doubt. I learned this concept a few years ago when I first started to ride a motorcycle, and they have a phrase for it - target fixation:

http://en.wikipedia.org/wiki/Target_fixation

What amazed me more was how the fundamentals of riding a motorcycle contained many great life lessons. It's not just target fixation, but rider awareness, maintaining margin, and all sorts of other little things.

JimmaDaRustla• 14 years ago

The author forgot to attach his sources.

The Most Difficult CEO Skill? Managing Your Own Psychology (2011)

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