Good vs. Bad CEOs

Ben Horowitz, in his book The Hard Thing About Hard Things: Building a Business When There Are No Easy Answers, spends a lot of time discussing CEOs. Given that the book is about what he learned as a startup CEO and what he now looks for as a VC, it's practical and well-thought out advice.

 As per Ben, there are two types of CEOs: those that are good strategically and those that are good functionally. The first kind has no problem with decisions but isn't great at execution; the second one is great at execution but suffers from analysis paralyis. A good CEO needs both skills and has to teach himself to be competent in the other area.

 Two of the criteria Ben uses to evaluate CEOs are—
  1. Do they know what to do?
  2. Can they get the company to do it?
In order for a CEO to succeed at these, he has to set the strategy and vision for the company. Ben explains that to do this well, CEOs have to give this context via story, which will explain the why behind everything the company is doing and why staff should go along with this.

The CEO then needs to hire the right people and build a culture where people can do their work. If staff know that good things will happen to them and the company if they do their work well, they will want to keep coming back. On the other hand, if they have to worry about politics or other barriers to getting work done, then the CEO has failed.

Although the above may seem harsh, I totally agree that a company's culture stems from the top, so it really is the CEO's responsibility to ensure that staff are happy and able to do their work.

As Ben clearly demonstrates, being a CEO is a tough and lonely job and not for the weak of heart or will. 

What other characteristics do you think make a successful CEO?
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5 comments:

  1. Faheem Salim BagwanJune 24, 2015 at 4:19 PM

    Hi Karina!

    You have very wide range of topics covered. Wonderful Blog! Keep going!

    I feel a successful CEO is made of right mix of temperament, character, values, skills and expertise. He/she is seen as a Leader and has the power to inculcate in every employee of the company a sense of integrity and commitment through good policies. He/she manages to balance the image of "people's man" and a "tough boss" appropriately.

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    1. Karina MikhliJune 24, 2015 at 4:26 PM

      Faheem,

      Thank you.

      I agree it's the right mix of all the characteristics you mention and hard to achieve well. Do you think it's important that he/she be perceived as tough though? I think capable and/or fair may be more important, and definitely someone who stands by his/her values.

      Thanks.

      Delete
  2. Faheem Salim BagwanJune 25, 2015 at 1:16 PM

    "Tough" is a relative term. If a person stands firm by his/her values, he/she may be perceived as tough. A well-disciplined CEO yet again can be seen as "tough" by few others.
    Ofcourse there is a lot more to a successful CEO. We have many live examples; a study on therir biography may provide useful insights.

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    1. Karina MikhliJune 25, 2015 at 3:34 PM

      Tough is indeed a relative term but I think the key there is to enroll employees and be open in your communication. If you share up front why you believe something, even if they don't necessarily agree, they'll appreciate you standing by your word.

      And yes, there's much that goes into being a successful CEO and the same formula won't work in two different circumstances.

      Delete
  3. Faheem Salim BagwanJune 25, 2015 at 4:06 PM

    I agree :-).

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