The Hard Thing about Hard Things: Savvy’s Top 10 Takeaways
Our client, Jon Bolen, is the CEO of ENTOUCH, the pioneer in energy management as a service and smart building technology. He recently told our CEO, Grace Ueng, that he had just finished The Hard Thing about Hard Things, Building a Business When There are No Easy Answers by Ben Horowitz, the cofounder and general partner of Andreessen Horowitz.
[This post was written pre COVID-19. Yesterday, Grace was invited to be a part of Jon’s all hands where Jon exhibited #1 below to a T. He shared transparently measures being taken to preserve runway and how proud he is of his team stepping up to the plate. He also spoke to #6 below. Jon is focusing on his team, his customers, and his investors and in that order. By focusing on people first, #2 and #3 will come out winners. We have seen other CEOs we advise echo what he shares: What I Learned When the World Ended – we will come out stronger!]
Grace has always taken an interest in Marc Andreessen ever since her early client, Ping Fu, cofounder of Geomagic and 2005 Inc. Entrepreneur of the Year, shared the story of how Marc worked for her years ago as a student, was bored one day, and she suggested he go “organize the internet,” and became his supervisor in developing Mosaic, the early multimedia web browser credited with popularizing the World Wide Web. Since we like to read what our clients read and figured Marc’s partner is also brilliant, we immediately ordered copies.
Ben shares revealing stories of lessons learned in his journey as CEO. Below are our Top 10 takeaways, peppered with a few of our own experiences and observations of our clients. We hope these will serve you well in moving your companies forward.
#1: CEOs should tell it like it is. Ben shares his single biggest personal improvement as CEO occurred the day he stopped being too positive. Telling things as they are and treating your employees like adults is a critical part of building trust. When Grace took the VIA Strengths survey, she found out her top Character Strength is Honesty. While she was unsure how good a strength this was, she realized from Ben that being honest helps to build trust.
I learned this the hard way when serving as CEO of Bandgap Engineering. Bandgap was working to develop its solar technology at a time when solar investment was dead. As one investor told me, “If you had a solar process that could convert straw into gold, I would definitely invest, but only if you could spin that solar piece out of it.” While I advised my team on the critical importance of hitting our technical milestones, trying to stay positive, I never conveyed the full challenges of funding a solar technology at that time or told my team that story. Sharing that story would have driven the challenge home for each employee and better enabled them to help move the company forward in a new direction.
#2: Training is one of the highest leverage activities a manager can perform. Many managers claim they don’t have time to train their staff, but Ben describes how even small efficiency improvements from training provides very high leverage. Consequently, Ben insists that his senior managers personally conduct staff training.
One of Jon’s first actions as CEO was to implement a comprehensive training program for every ENTOUCH employee, run by himself and his leadership team. The training includes programs to make every ENTOUCH employee an expert on the entire ENTOUCH product line. Jon understands that only by having a well-trained and fully aligned team can they accomplish their aggressive goals.
#3: Good Product Manager/Bad Product Manager. When Ben was Director of Product Management at Netscape, he wrote a simple document on the traits of a good product manager versus a bad product manager to train his team on his basic expectations. He was shocked how the performance of his team instantly improved.
The specific characteristics of good and bad product managers are interesting, but what is more critical to CEOs, and really any manager, is the importance of clearly defining expectations. By clearly defining his expectations, Ben took an average performing team and turned it into the leaders at Netscape. What Ben learned, as many of us can relate in our own lives, when the direction is clear we are free to act. Set clear, actionable objectives and expectations and your team will respond.
#4: “Don’t bring me a problem without bringing me a solution” is an out of date management standard. One of the key tasks of any CEO is to build a strong company culture that rewards employees that surface problems early. While “bring me a solution” might sound fine in a management textbook, it isn’t practical for most complicated problems. Successful organizations are ones that encourage highlighting critical problems early, before you know how to solve it, so that the best minds can solve the problem together.
#5: “We would have won, but the other guys gave the deal away.” Ben says that anyone who has run an enterprise sales force has heard this excuse. You go into an account, you fight hard, and you lose. The team is disappointed and while looking for the reasons they lost, they often latch-on to price. Often this is an excuse to hide another problem. Recently, Grace led an external discovery process for one of our clients that included multiple interviews with lost deals. She was able to have these individuals share at great length the issues causing the client not to win their business, ranging from sales techniques, to product positioning, to head to head performance in a bake-off. Not once was price mentioned as the issue.
The Board and management were surprised by the findings, with more than one Board member remarking how Grace has almost a magical talent to have the lost customers open up and share information. She synthesized her discovery interviews into insights that changed the client’s strategic direction. Grace likes to say that her magic is simply that a third party can collect research that is more difficult for the lost customer to share with the client directly. It is much easier to share negative feedback when speaking through an intermediary.
The findings made the client reevaluate its positioning and sales strategy, but not to lower its price. Ben suggests that if you hear from your team that you would have won except for price, that you try to validate the claim with the customer. He bets that you can’t. And when you can’t, you need to dig deeper and find the real problem.
#6: Take care of people, product, and profits and in that order. Taking care of people is the most difficult, and if you don’t do it, the other two don’t matter. Jon has taken this admonition to heart. Upon becoming CEO one of his first actions was to institute regular company-wide meetings with open, honest communications about the successes and challenges ENTOUCH faces, his vision for where the Company will go and what it means to each employee.
Jon’s goal is to make it easy for his team to focus on their work and understand how success in that work will produce good things for them and ENTOUCH. Companies win and become profitable by having the best products, and it is your people who are going to build those products. The best people will only work at organizations that treat them with the respect and care they deserve. Take care of your people first and the products and profits will follow.
#7: One on Ones provide excellent mechanism for information and ideas to flow up the organization. Regular one on one meetings with your staff are critical to a company’s success as they provide the vehicle to ensure that both your company’s objectives are understood by the employees and that the problems with implementing those objectives are understood by you.
To maximize the value of these meetings, Ben recommends that you have the employee send you the agenda in advance and that you do 10% of the talking and 90% of the listening. This is the opposite of how most managers operate. The objective is for the manager to draw the key issues out of the employee and learn where they are getting stuck. This allows the manager to regularly modify and correct the direction and ensure that her team is not bogged down with the implementation.
#8: Ones or Twos: Managers who are happier setting the direction of the company are Ones and those who more enjoy making the company perform at its highest are Twos. There are times in a company’s development that it will need a CEO who is more the visionary, direction setting CEO. This is the classic characteristic for the founder/CEO, the person who creates the direction and builds the enthusiasm and excitement within the team to realize the vision. But there are also times, typically after a company has had some success and is beginning a period of rapid growth, where execution and operational efficiency dominate performance.The best CEOs are skilled at both.
#9: Leadership is the ability to get people to follow you: As Colin Powell stated, leadership is the ability to get people to follow you, if only out of curiosity.
Ben articulates 3 traits that make people want to follow you:
(1) The ability to articulate the vision – to be a good storyteller. The story is not the mission statement, the story does not have to be succinct. It’s the story. Companies can take as long as they need to tell it, but they must tell it and it must be compelling. A company without a story is usually a company without a strategy. Jeff Bezos’s 1997 Letter to Shareholders is a good example. Step 3 in Savvy’s Project Peak is “Speak the Future Now“. Bezos was shaping the future of today back in 1997, and he republishes that original letter to shareholders each year.
(2) The right kind of ambition – caring more about their employees and the company’s success then they care about themselves or their own success. This is critical trait to make managers leaders. An employee needs to know that his or her manager put the company’s goals ahead of their own personal ambition or else they are working to advance the career of their manager, and why would they want to do that?
(3) The ability to achieve the vision – a CEO can never stop learning and improving his or her skills. The world evolves and changes rapidly and constantly requires new skills and capabilities. The CEO who doesn’t continue to learn and improve will not remain successful.
#10: As CEO, you can do very little employee development. It is a hard enough to build and run a company with 100% of your effort focused on that. The demands of the job make employee development impractical for the CEO. Your executive team needs to be 99% ready to perform. The time to develop raw talent can and must be done at lower levels in the company, but not at the executive level. If someone needs a lot of training, they are below standard and need to be replaced.
Rate yourself on a scale of 1-10 for each of these 10 points. What is your average score? Grace and I would like to hear your thoughts on which you most related to and which you want to improve!
About the Author
Richard Chleboski is Managing Director of Savvy Growth, a boutique management consultancy whose mission is to help cleantech and other impact focused companies and their leaders achieve their fullest potential.
Chleboski and Grace Ueng, Savvy’s founder and CEO, develop and implement strategies to support the growth of impact focused companies. Their expertise spans all phases of the business from evaluation through growth and liquidity. Savvy works with your team from discovery through implementation to ensure the success of your venture.
Savvy supports senior executives and investors at impact focused for profit companies as well as non-profit organizations. They are hired by the board of directors or the CEO of companies at inflection points. They become an extension of the C-suite and develop and implement growth and transition strategies. Savvy Growth has served 200 clients from emerging growth to the Fortune 1000.