Review: “Hard things about Hard things” by Ben Horowitz

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“Hard things about hard things” is a great practical book that provides a lot of advices and tips on the topics that usually are not addressed in the business books. It is mainly focused on the job of the CEO and covers difficult areas such as massive layoffs, demoting a friend, firing executive, hiring from a friend’s company, etc. However, managers will find a lot of interesting pieces of advice that can be applied at their roles as well. The book is great and it is really hard to provide a summary without doing a disservice to the book. I will cover the topics that drew my attention the most: layoffs, training and scaling a company.

Summary

The hard thing isn’t setting a big, hairy, audacious goal. The hard thing is laying people off when you miss the big goal.

Layoffs

Ben Horowitz has an experience of running a business through multiple layoffs. Usually, it is extremely hard to recover from a layoff for a startup — the morale gets very low and best people start to leave if the layoffs are not handled properly. It can be the death of the company in many cases. So it is important to get the layoff right and the following steps can help to prepare:

1. Get the head right — it is a very emotional step given how hard it is to hire people so CEO should make sure to focus on the future rather than the past.
2. Don’t delay — the time between making a decision and executing that decision should be as short as possible
3. Be clear about reasons of the layoff — the company failed to hit its plan and has to lay off people. It is company’s performance vs employees. A message should be — “the company failed and to move forward, we will have to lose some excellent people” vs “this is great, we are cleaning up performance”
4. Train the managers — managers must lay off their own people. It should not be like “Up in the Air”. People will remember the day they were laid off more than anything else that happened in the company. Items to prepare: explain briefly what happened; be clear that the employee is impacted and that the decision is nonnegotiable; be prepared with all of the details about the benefits and support the company plans to provide.
5. Address the entire company — provide the context and air for the managers. The message is for the people who are staying. The company must move forward, so it is important to avoid apologizing too much.
6. Be visible and be present as a CEO.

Training

Being a good company doesn’t matter when things go well, but it matters when things go wrong. People only stay if they really like the job. Great training program can help a lot with that. In general it can address a lot of common issues in tech companies: productivity, performance management, product quality and retention.

Training is one of the highest leverage activities that a manager can perform.

A. Grove

No startup has time to do optional things therefore, training must be mandatory. There is no investment that a company can make that will do more to improve its chance of survival.

Ben Horowitz defines three types of training:

• functional training — the knowledge and skill that people need to do their job
• management training — good manager vs bad manager expectations
• specialized training — best people sharing their most developed skills — negotiating, interviewing, finance, etc.

What are the ways to implement a training program?

Functional training can be enforced by withholding new employee requisitions. The requisitions can only be created when a manager develops a training program for the new hires.

Management training can be enforced by CEO teaching it herself. Starting a course on management expectations (Good manager vs Bad manager) can be a good beginning.

Training badge of honor or other rewards incentives can be created to simulate the training initiatives among the employees.

Scaling the company

The following areas are affected the most when a company is growing:

• communication
• common knowledge
• decision making

The challenge is to grow but degrade in those areas as slowly as possible. The Specialization, organizational structure, and process all complicate things and implementing them will move away from common knowledge and quality communication.

Specialization is the first technique to facilitate the efficient growth of the company. In the beginning, the group is so small that everyone knows everything but that doesn’t scale when the company grows. It becomes increasingly difficult to add new team members because the learning curve starts to get super-steep. As a result of this technique, common knowledge is being replaced with specialized knowledge. Organizational design and process can help to mitigate that issue.

All organizational designs are bad. Any design optimizes communication among some parts of the organization at the expense of other parts. There are different ways to organize the company — either it can be around functions or around missions. The goal is to choose the least of all evils. It is important to keep in mind that organizational design becomes the communication architecture for the company. That broadcasts into the engineering design per Conway’s law — software architecture mirrors the communication structure of the organization that builds it.

The best way to make people communicate is by making them report to the same manager.

How to approach organizational design:

1. Figure out what needs to be communicated.
2. Figure out what needs to be decided.
3. Prioritize the most important communication and design paths.
4. Decide who’s going to run each group. The goal is to optimize the organization for the people that doing the work, not for the managers.
5. Identify the paths that needs to be optimized.
6. Build a plan for mitigating the issues identified in step five. This will help to identify the processes that need to be built to patch the cross-organizational challenges.

The purpose of the process is enhance communication. The first process to implement is the interview process. It is much easier to add new people to old processes than new processes to old people.

Main things to focus on the process design:

• focus on the output first
• figure out how to measure each step and how it contributes to the output
• engineer accountability into the system

My opinion

What really resonated with me when I was preparing this review is the importance of training. I have been thinking about that a lot lately and it is shocking however poorly it is done across the industry. The usual expectation in the industry and the answer that I hear most of the time — 3 months to get a new team member to become productive.

Everyone agrees that training is important: a company that is going through the growth phase; a manager that has a project deadline or wants to backfill a key talent; a team that desperately needs help with the work; a new hire who wants to be successful at a new .

A new team member wants to get productive as soon as possible. Nobody likes to read docs that are usually behind the situation on the ground. Nobody likes to pick up the pieces of information here and there and jump over the hoops to accomplish a trivial task. Furthermore, it is easy to make rookie mistakes and feel that it tarnishes the credibility that is extremely important for a good start at a new place.

Any manager dreams that a new team member will get productive in their first two weeks. Usually, an onboarding plan is being prepared with expectations for the first 30,60 and 90 days and a list of people that can help during the process. This is the least a manager should do to set somebody up for success.

The team usually meets with a new hire and does a few of the knowledge sharing sessions. Knowledge sharing sessions are never fun because they are repetitive and take the time that is required to meet the project commitments. They can burn out the team if the hiring rate is high and it is very hard to measure their quality other then looking if a new hire successful or not.

Companies usually address the training from the very high level perspective and deploy learning management systems that are focused on general trainings. For example, a new hire might get a session on how to do the expenses in their first week. However, you don’t really need that session unless you are actually doing an expense. Some companies provide additional skill training by leveraging platforms such as Udemy but almost none have a solution that facilitates internal training initiatives.

Most of the times, it reminds of a situation where a person without any swimming skills is being thrown into the water with a rescue ring and a hope that s/he will learn the skills fast enough. My granddad literally learnt to swim that way. Is it the optimal way to learn any skill? It really depends on the person — some learn faster than others, they might use the prior experience to build on top of it but others can “drown” and quit the company in frustration of not being able to perform at the level that they are used to.

As of now, the quality of onboarding/training really depends on a manager and can vary greatly even within one company. It feels that there is lack of proper tooling that can enable people to create effective training material.

Verdict

Highly recommended for entrepreneurs