Wednesday, October 18, 2017

Management Skills

On his Marginal Revolution blog Tyler Cowen brings us some good advice about corporate management… from venture capitalist Ben Horowitz. (via Maggie’s Farm)

First, Horowitz says:

People always ask me, “What’s the secret to being a successful CEO?”  Sadly, there is no secret, but if there is one skill that stands out, it’s the ability to focus and make the best move when there are no good moves.  It’s the moments where you feel most like hiding or dying that you can make the biggest difference as a CEO.

Naturally, we tend to divide the world into good and bad. We know the right thing to do and we know the wrong thing to do. We admire those who do the right thing and assume that those who do the wrong thing could have done the right thing. Since we have been trained to think critically, we can find fault with any move.

As I see it, Horowitz is right. There are times when there is no right decision. That is, there are no good moves. But you have to do something. It's your job. As the saying goes… its now your move.

As for the psycho angle, Horowitz has a useful comment that feels like it came from Peter Drucker’s pamphlet: "Managing Oneself."

Horowitz said:

By far the most difficult skill I learned as CEO was the ability to manage my own psychology.

It does not just mean that you should control your emotions, but that is certainly part of it. It means that you should be able to step back from a problem and think about the company’s best interest, not your own best interest. And it also means evaluating proposals objectively, regardless of how charming or convinced the person who promoted the proposal was. Think about the policy, not the person.

Of course, you will then need to persuade the person whose idea you just rejected to be on board with the decision.


Ares Olympus said...

I don't think anyone could disagree with any of this as an ideal. And it sounds like a good truth in life in general, when things are not going well, and you are responsible for the well-being of other people, and you know whatever you do, you'll be blamed by someone for not doing enough or the right thing.

So leadership must contain something that helps you find some peace within yourself and faith you're doing the best you can in a given situation, and then be able to communicate that peace to others who can't find their own.

Like the opening to Kipling's poem "If-"
If you can keep your head when all about you
Are losing theirs and blaming it on you,
If you can trust yourself when all men doubt you,
But make allowance for their doubting too;
If you can wait and not be tired by waiting,
Or being lied about, don’t deal in lies,
Or being hated, don’t give way to hating,
And yet don’t look too good, nor talk too wise:

James said...

He's just rewording the old "principle agent problem", that has been well known and discussed for a long time in the business world and especially in the military world.

Jack Fisher said...

I'm not buying this. The primary, unstated concern of anyone in power is to stay there. In the case of the CEO that means being responsive to the kingmakers in his or her company: whoever controls voting share blocs, directors, key personnel. If that corresponds to the overall health of the company, great. But this isn't necessarily the case.