8 Things You Can Learn from Ben Horowitz About Management
With the right leadership, there’s no limit to business growth. Find out what Ben Horowitz has to say about managing a successful company.
Like everything in the business world, management is constantly changing. The rules of successful management progress and move on at a rapid pace, which you must stay up-to-date if you wish to thrive in the long run.
Few people have managed to keep up as well as Ben Horowitz. The co-founder and general partner of venture capital firm Andreessen Horowitz also happens to have an impressive business track record.
Horowitz was also the CEO and co-founder of Opsware in 2007 when Hewlett-Packard bought out the company in a US$1.6 billion deal. After the acquisition, HP named Horowitz the VP and general manager of Business Technology Optimization for Software.
At the moment, he’s a board member for many of the companies in Andreessen Horowitz’s portfolio. Among the most well-known are Genius, Lyft, Foursquare, and Medium.
In his decades of management success, Horowitz has learned many lessons. Below are some of the most impactful.
1. Management Is Situational and Personal
How do you advance your management skills?
Do you read books? Attend seminars?
There are many sources of knowledge that can make you a better manager. The issue is that most of the knowledge is theoretical. For Horowitz, he’s of the opinion that theories may not be very applicable when they’re put into practice.
He explains as follows:
‘Nobody is born knowing how to be a CEO. It’s a learned skill and unfortunately you learn it on the job.’
What he meant is that businesses are different. Even if there’s a resemblance, such as two companies that offer similar services, the manager would still have to face a unique set of challenges.
Because of this, Horowitz believes that generalised advice found in books may often not apply to your situation.
This isn’t to say that you should ignore reading materials in your quest to expand your knowledge base. It’s just that as you should find sources that are as applicable to your situation as possible.
For example, if you’re reading about what other managers are doing, which you could perhaps borrow, you should examine if the situation is similar to yours. That’s the way to end up with actionable information that you can actually use.
2. Conflicts Are Very Important
From a management perspective, a business is a group of resources conducted to go in the direction that’s beneficial to said business. Of course, the people are the key resource of a company. As a manager, you’ll be working with many.
This means that you’ll often come across a variety of ideas and opinions. Furthermore, these ideas may conflict with one another.
You wouldn’t want to be like one of those managers who sweep conflicting issues under the rug. Conflicts are not necessarily bad or undesirable, even the conflicts within a company.
In Horowitz’s experience, conflicts play an important role in business success. A capable manager shouldn’t ignore conflicts but encourage them.
‘When there’s a conflict in the organization, you do not want to smooth it over. You want to sharpen the contradictions, heat up both opinions, and resolve it.’
However, conflicts may need to get resolved. That’s why all major companies require their employees to go through conflict resolution training. Properly done, conflict resolution is vital to creating an atmosphere of honesty and respect. If treated appropriated, conflicts can in fact be very constructive and helpful.
3. Use Stories to Motivate
Many managers believe that business stories are what you tell consumers. But not for Horowitz, who thinks that it’s essentially business strategy.
As he puts it:
‘You can have a great product, but a compelling story puts the company into motion. If you don’t have a great story it’s hard to get people motivated to join you, to work on the product, and to get people to invest in the product.’
In other words, it’s important for your people to believe the story that you’ve created about your business. The employees need to feel like they’re a part of something bigger. Or else they’re more likely to just work for the pay and go home.
What’s your business’ story? Figure it out and then you can build the story into the company culture and share the vision with everyone in the business.
4. Decisiveness Is Key
By its nature, management comes with a lot of responsibilities. The employees look up to you and expect you to show the way.
But you can’t do this if you don’t know the way yourself.
As a manager, you’ll have to make a lot of decisions. Will you always get them right? Probably not.
But it doesn’t matter.
According to Horowitz:
‘Often any decision, even the wrong decision, is better than no decision.’
Good decisions are obviously rewarding. But do you know that there’s value to wrong decisions?
It’s in the lessons that you can learn after getting it wrong.
As mentioned, the best way to get good at management is to figure it out as you go. This implies a trial-and-error phase that all managers would have to go through. The more mistakes made, the more you’re going to learn and, hopefully, you’ll be able to do better next time.
Looking at poor decisions from this perspective can be highly beneficial. Rather than overthinking, you’ll be getting things done and making decisions quicker, both of which are the traits of competent managers.
5. Look for Team Players
At the end of the day, your success as a manager depends on your ability to bring the business closer to its vision. But what if not everyone shares this vision?
What if the employees put their own needs in front of the business’?
In this case, even if the employees could continue to grow individually, it might not translate into business success.
Although ambitious employees are desirable, their ambitions should extend beyond individual goals. You need people who care about growing personally and also the company’s growth.
‘While it may work to have individual employees who optimize for their own careers, counting on senior managers to do all the right things for all the wrong reasons is a dangerous idea.’
You can screen for this sort of ambition when bringing new people on board. Look for people who talk about the success of their previous employers in addition to their own. That should show you their motive for working at your company.
6. Company Perks Aren’t Culture
Managers go out of their ways to make work life more enjoyable for the employees. Doing so is very important if you want the people to commit to your business.
However, employee satisfaction isn’t the same as a high-performing culture. Aside from high levels of satisfaction, the culture needs to move the company getting closer to its biggest goals. Moreover, the right culture should bring together the values of both the company and its people.
A good example of this is the desks at Amazon of repurposed doors. This sends a message that frugality is Amazon’s key value, except when it comes to making the customers happy.
Horowitz’s company also has a set of traits. For instance, punctuality is non-negotiable and comes with a US$10 fine for every minute of tardiness.
‘If you don’t think entrepreneurs are more important than venture capitalists, we can’t use you at Andreessen Horowitz.’
As for creating a strong culture, he recommends points that are ‘trivial to implement but have far-reaching behavioural consequences.’
The lesson here is to not focus too much on perks. The proper alignment of your values with the employees’ is what’s going to keep them happy in the long run.
7. Don’t Run Out of Cash
This might sound obvious but Horowitz thinks it’s worth repeating. Don’t ever let your business run out of cash.
‘There are only two priorities for a start-up: Winning the market and not running out of cash. Running lean is not an end.’
A cash-strapped business is a business at a very high risk of failure.
However, it may not be easy to put away enough cash. You have expenses to pay and businesses have to spend money to grow. But the point is that you wouldn’t want to do so at the cost of liquidity. Always plan out your cash flow several months or a year in advance.
8. Don’t Forget About Yourself
As a manager, you have to make decisions that will impact several facets of your business. You’ll be under a lot of pressure to meet everyone’s needs and to meet targets.
All too often, this can cause you to ignore taking care of your own needs.
Horowitz often speaks openly about the immense pressure on his shoulders. However, focusing on your well-being is key to performing at your best.
You’ll be of little use to anyone if you get burnt out. That’s also a good way to make yourself resent all the work that you have to do.
To avoid this, make sure to relieve some of the pressure as often as you can. This is especially important when you find yourself in challenging situations.
Horowitz has a very useful piece of advice in this regard:
‘There are always a thousand things that can go wrong and sink the ship. If you focus too much on them, you will drive yourself nuts and likely capsize your company. Focus on where you are going rather than on what you hope to avoid.’
Remember that every problem has to have a solution, and often more than one. If you keep this in mind all the time, you’ll be a lot calmer and more productive in all situations, including the most pressure-filled.
Lead the Way
At all levels, management can be a demanding and high-responsibility position. You’d have to juggle things and work on one goal after another.
However, the advice of people like Horowitz may ease the burden of the job. If you’re not currently applying some of the tips described here, you already know what you should do. They have certainly worked out well for one of the most successful businesspeople of today.
Remember that your management style should be more flexible than rigid. Working on your skills and experimentation should work way better for your business.
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