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Ben Horowitz on Executive Firing (and Hiring)

The holy grail of company building is finding product-market fit. But what most people don’t tell you is that once you’ve found it, product-market fit brings its own set of challenges, particularly when it comes to scaling rapidly and hiring the right executives at the right time. Drawing from their extensive experiences, a16z cofounder Ben Horowitz and Databricks cofounder and CEO Ali Ghodsi sit down to talk about the hardest things about executive hiring and firing, and what is at stake. They dive into the common reasons an exec fails, why sometimes micromanagement is a good idea, and the difference between someone who has written a playbook and someone who has only run one. If you’d like to dive even deeper, the Growth team at a16z has spent the last year compiling insights from dozens of leaders at late-stage startups to literally write the book on hiring executives to scale. You can find that book at: http://a16z.com/executive-hiring-playbook Topics Covered: 00:00 - Post-product market fit 03:07 - When is it time to let someone go? 05:41 - When do you give someone a chance to grow into the role? 07:05- Let go or level? 09:27 - How do you have the tough conversation? 16:39 - Exit packages 18:40 - Setting a new leader up for success 24:27 - The importance of the first quick win 26:24 - The impact a new leader has on culture 32:52 - Common ways new leaders fail 37:35 - Closing thoughts Resources: Read the Executive Hiring: The Key to Scaling in the Growth Stages: http://a16z.com/executive-hiring-playbook Learn more about Databricks: https://www.databricks.com Find Ben on Twitter: https://twitter.com/bhorowitz Find Ali on Twitter: https://twitter.com/alighodsi Stay Updated: Find a16z on Twitter: https://twitter.com/a16z Find a16z on LinkedIn: https://www.linkedin.com/company/a16z Subscribe on your favorite podcast app: https://a16z.simplecast.com/ Follow our host: https://twitter.com/stephsmithio Please note that the content here is for informational purposes only; should NOT be taken as legal, business, tax, or investment advice or be used to evaluate any investment or security; and is not directed at any investors or potential investors in any a16z fund. For more details please see a16z.com/disclosures

Steph SmithhostAli GhodsiguestBen Horowitzguest
Jun 14, 202340mWatch on YouTube ↗

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At a glance

WHAT IT’S REALLY ABOUT

Ben Horowitz and Ali Ghodsi on Hiring, Onboarding, and Firing Executives

  1. Horowitz and Ghodsi describe signs a leader has been outgrown, such as the CEO second-guessing them, the team losing faith in them, or emotional overload, and note that a leader the team no longer follows must go regardless.
  2. They argue firing conversations should start from honesty, including the CEO's own share of fault, and from framing like 'is it working?' rather than listing the person's failures, followed by generous exit support.
  3. For onboarding, they advocate daily contact and close 'micromanagement' or training for new executives, supplying company context, and aiming for a quick first win within two to four weeks.
  4. On hiring, they stress choosing leaders who have actually built a function at the company's current scale, testing depth with repeated 'why' questions, and starting searches early because a bad hire can cost up to two years.

IDEAS WORTH REMEMBERING

5 ideas

Start the firing conversation with honesty, not a list of failings

Horowitz says leading with indisputable facts about why someone should be fired triggers defensiveness; the truth is that mistakes were made and it is usually partly the CEO's fault.

Ask 'is it working?' rather than making it personal

Ghodsi opens by asking how the person thinks things are going, and says in about half of cases they admit it isn't working, which makes the next step easier; Horowitz adds that phrasing about 'it' rather than 'you' avoids putting people on guard.

Be generous in exits

Ghodsi says you owe departing executives generous compensation, help finding a next job and references, while Horowitz recalls Bill Campbell's line that you take their job but not their dignity, which also matters to remaining employees.

New executives lack company context, which is the top failure reason

Horowitz says new hires know their function but know nothing about the company, so they copy what worked before and appear to do nothing; daily conversations for about 30 days and 'micromanagement' as training guard against this.

Secure a quick first win

Both say the whole organization is sizing up a new executive, so they should get one simple win in the first two to four weeks, such as putting out an existing 'fire', rather than tackling eight things or spending a month listening.

WORDS WORTH SAVING

5 quotes

Ironically, you think you're being, like, objective and factual. What you're really being is emotional, defensive, and afraid of the actual truth.

— Ben Horowitz

The one thing that's always true is if the team doesn't believe in the executive anymore, it doesn't even matter.

— Ben Horowitz

Can he run a playbook or can he write a playbook?

— Ben Horowitz

if you don't tell yourself the truth, if you lie to yourself, then there's no way you're gonna get the truth out of the other person.

— Ben Horowitz

This is one of the most important decisions you could ever make as a leader in your company. Spend the energy. You can't be spending too much time on this.

— Ali Ghodsi

Recognizing when you've outgrown an executiveLeveling versus firingHaving the firing conversationExit packages and treating people with dignityOnboarding and training new executivesFirst quick wins and culture integrationHiring builders versus playbook runners

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