All Segments
Ben Horowitz on Executive Firing (and Hiring)
29 segments available
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
Segments Timeline
The Challenge of Scaling After Product-Market Fit
Ben Horowitz discusses the complexities that arise after achieving product-market fit, emphasizing the critical need for effective leadership during rapid scaling. He highlights the importance of hiring the right executives and the challenges that come with managing growth, particularly in larger organizations.
"the Holy Grail of company building is finding product Market fit but what most people don't tell you is that finding product Market fit brings its own challenges all of a sudden you need to scale real..."
Recognizing When You've Outgrown a Leader
In this segment, Ben Horowitz explains how to identify when an executive is no longer the right fit for the company. He shares insights on emotional responses to tasks and the importance of leverage in leadership roles, emphasizing the need for executives to adapt as the company grows.
"language warning you'll also hear Ali refer to Super ICS ICS refer to individual contributors without direct reports you'll also hear Ben and Ali refer to some of the executives that they've worked wi..."
The Importance of Confidence in Leadership
Horowitz and Ghodsi discuss the significance of confidence in executives and how a lack of it can lead to a downward spiral. They explore the dynamics of team belief in leadership and the consequences of losing that trust, stressing the importance of addressing these issues promptly.
"I know when you've outgrown an existing leader it's when you're asking other people what do you think but when you're starting to have the thoughts of like is this the right person or is it not the ri..."
Giving Executives a Chance to Grow
This segment focuses on the criteria for giving executives a chance to develop in their roles. Horowitz emphasizes the need to identify their strengths and how to position them for success while addressing potential gaps in their capabilities.
"and the person you hired and you had for a while isn't that person and that one is very confusing to me always because you're like you thought you knew who they were but they're not that anymore yeah ..."
The Value of External Experience in Sales and Marketing
Ben Horowitz highlights the importance of hiring executives with external experience in sales and marketing. He argues that knowledge of the broader market is often more valuable than internal company knowledge, stressing the need for leaders who can navigate the competitive landscape effectively.
"I'd say is I think a mistake a lot of companies make is you know in engineering and in product and so forth the knowledge of how your company works is really really valuable but in sales and marketing..."
Navigating Executive Promotions and Role Changes
Horowitz discusses the complexities of promoting executives and the challenges that arise when they are not suited for leadership roles. He shares strategies for transitioning individuals back to roles where they can excel, emphasizing the importance of honesty in these conversations.
"other side you know so you either have typically have Tech CEOs and Founders who are really good at Tech they're smart maybe they have an engineering degree and like well how hard can the sales or mar..."
Having Difficult Conversations with Executives
In this segment, Horowitz provides insights on how to approach difficult conversations with underperforming executives. He stresses the importance of honesty and accountability, advocating for a truthful dialogue that acknowledges shared responsibility in the situation.
"them yeah look there's also there's a failure mode which I've seen which is you move a person to a new role and then what happens is they start checking out they're like checked out or they're whereas..."
Finding the Root Cause
Horowitz shares insights on how to uncover the underlying issues affecting an executive's performance. He recounts a conversation with an entrepreneur who discovered personal challenges impacting an employee's work. This segment emphasizes the value of open dialogue and understanding the context behind an executive's struggles.
"say hey like here's what I've observed what's going on that's just the one-on-one right it's just a normal one-on-one where you're like hey what's going on with the output of this thing and and you ca..."
The Importance of Self-Honesty
In this segment, Horowitz discusses the critical role of self-honesty in leadership. He explains that if executives cannot confront their own truths, they will struggle to address performance issues within their teams. This self-awareness is essential for effective leadership and decision-making.
"you ask Executives aloud and this and that you know like have you fired somebody did it uh and like why is that an important question I think it's important because if you don't know how to do that yo..."
Navigating Difficult Conversations
Horowitz elaborates on the nuances of discussing performance with executives. He suggests starting conversations by asking how things are going rather than immediately pointing out failures. This approach helps to create a more open environment for dialogue and allows for a more constructive discussion about potential changes.
"thing I try to do in the conference if we decide if I've decided this is done and we're parting ways my first question is usually how do you think it's going yeah yeah and you know 50 of the cases the..."
Setting Expectations for Executives
In this segment, Horowitz emphasizes the importance of setting clear expectations for executives within the context of the organization. He discusses how collaboration with peers is crucial for success and how failing to meet these expectations can lead to difficult decisions about retaining or letting go of executives.
"I've actually seen many execs get to that point then they kind of turn to me and then they say they actually will say Okay I I get it yeah but what about me like my career or my path then it's like ok..."
The Art of Firing with Dignity
Horowitz shares his philosophy on handling executive firings with compassion and respect. He believes in being generous and supportive during the transition, emphasizing the importance of maintaining relationships and treating departing executives with dignity. This approach not only helps the individual but also positively impacts the remaining team members.
"salesperson hey here's the framework I've been using yeah we're gonna have an escalation if it's like indemnification Above This limit if it's you know if it's a liability of this sort this is what's ..."
Setting New Executives Up for Success
Horowitz shares strategies for ensuring the success of newly hired executives. He highlights the importance of micromanagement as a form of training and setting clear expectations. By maintaining close communication and providing context about the organization, leaders can help new hires navigate their roles effectively and avoid common pitfalls.
"very stringy in these kind of situations and then there's a couple things about that one is if you are kind of more supportive and generous and you know you're gonna have a relationship afterwards it'..."
Daily Engagement for New Leaders
In this segment, Horowitz stresses the necessity of daily engagement with new executives to build trust and understanding. He advocates for frequent check-ins to discuss priorities and challenges, ensuring that new hires are aligned with the company's immediate needs and culture. This proactive approach helps prevent missteps and fosters a supportive environment.
"is pretty high it's almost always retrospectively people call it fit but fit isn't entirely determined by the higher it's what happens after you hire them so how do you how do you think about solving ..."
Understanding Organizational Context
Horowitz explains the critical need for new executives to grasp the unique context of their organization. He warns against applying previous experiences without understanding the specific dynamics at play. By sharing historical insights and key relationships, leaders can help new hires avoid common mistakes and integrate more smoothly into the company.
"context and we're sharing this so much that's shared in those and after a couple months you're going to feel much more like okay I know this person yeah you know I've had so many interactions with I I..."
Quick Wins for New Executives
This segment focuses on the importance of achieving quick wins within the first few weeks of a new executive's tenure. Horowitz advises managers to facilitate these early successes to build credibility and confidence. He emphasizes that a new leader's initial performance can significantly influence their acceptance and effectiveness within the organization.
"that is like having watched Executives fail that's the number one thing they fail on is they don't have the contacts so they'll come in and in the first three months they'll start working on whatever ..."
Navigating Early Challenges
Horowitz discusses the challenges new executives face when joining an organization. He highlights the need for leaders to prioritize tasks effectively and avoid overwhelming themselves with too many initiatives. By focusing on one critical issue at a time, new hires can establish their presence and demonstrate their value to the team.
"also kind of that's how I always find you teach somebody the organization because they go oh well I'm going to go work on this and I'm like oh well you need to talk to Ed because like Ed knows all abo..."
Cultural Impact of New Leadership
In this segment, Horowitz reflects on how new executives can influence company culture. He notes that organizations quickly form cultures, and the arrival of a new leader can shift dynamics. Understanding the desired cultural outcomes and avoiding arrogance are crucial for new executives to integrate successfully and foster a positive environment.
"in the first two to four weeks yeah quickly yeah uh get that quick win and similarly if it's like a big trip up and fall and you know Big Splash you know people like oh my God yeah you know who's this..."
Cultural Integration for New Executives
Horowitz explains the challenges new executives face when integrating into a company's existing culture. He stresses the importance of fitting in and gaining respect before attempting to implement significant changes, highlighting that successful integration requires understanding the company's dynamics and building trust.
"yeah one win this week yes another win next week exactly and then on the daily call remind them hey how's that going that dumpster fire on third floor you put it up exactly exactly so what's the impac..."
Navigating Cultural Change
Ali Ghodsi shares insights on managing cultural shifts within a company, particularly when bringing in leaders from different backgrounds. He reflects on his experience at Databricks, where a shift from an engineering-centric culture to a sales-oriented approach required careful navigation to avoid resistance and foster acceptance.
"look this process that we have it's taking eight days I think there's a way we could shorten it to four days or I think we could actually if we tried this thing we could improve our hiring and Enginee..."
Embracing Change as a CEO
Horowitz discusses the necessity for CEOs to embrace change when new executives are brought in. He recounts his own experience at Databricks, where acknowledging the need for a cultural shift led to significant revenue growth, emphasizing the importance of balancing new strategies with existing company values.
"that we believed in we called it zero touch at that time was not working people you couldn't just build it when they come they weren't swiping their credit cards left and right and paying us and we co..."
Avoiding Cultural Pitfalls
Horowitz warns against the dangers of allowing new executives to introduce incompatible cultural elements. He shares a personal anecdote about enforcing performance reviews to maintain company standards, illustrating how leadership must ensure that new hires align with the established culture to prevent disruption.
"up you know a Gong that we would hit when we close the deal yeah and in fact I embraced it and the engineers loved it so much that they would steal it and they would go hit that's what I'm saying hey ..."
The Role of Performance Reviews
In this segment, Horowitz highlights the significance of performance reviews in maintaining accountability within teams. He recounts a situation where withholding raises due to incomplete reviews led to improved performance, underscoring the necessity of consistent evaluation in fostering a productive work environment.
"piece of things and I remember when I was at Ops where we had been through so much I was just like look we made nobody maybe nobody gets rich on this thing but nobody's going to have a bad work experi..."
Hiring for the Right Experience
Horowitz discusses the common pitfalls in executive hiring, particularly the importance of matching candidates' experience with the company's current needs. He emphasizes that hiring someone with the right domain expertise is crucial for success, as mismatched backgrounds can lead to failure in new roles.
"look I hired uh amazing cro came in Ron right and took us from zero to billions but one of the things I heard them say in one of the meetings was they were like stop damn it this SPD yeah I was like w..."
Building vs. Running Organizations
In this concluding segment, Horowitz differentiates between executives who have built organizations and those who have merely run them. He stresses the need for leaders who understand the foundational aspects of a company, as this insight is vital for navigating the challenges of growth and scaling effectively.
"this way yes I kind of think about it right yeah like the the person who works at a company is the person who built the company exactly and the person who works in an organization is not the one who b..."
Interviewing for Depth: The Key to Finding Builders
Horowitz shares insights on how to effectively interview candidates for leadership roles. He emphasizes the importance of probing deeply into candidates' past experiences and their ability to construct effective strategies, rather than accepting surface-level answers that indicate a lack of true understanding or capability.
"like the ride along otherwise the people that are just purely blatantly trying to copy paste like literally they weren't a huge organization they were one of the cogs and they just saw that big Cog an..."
The Importance of Sales Enablement in Rapid Growth
Horowitz recounts a pivotal moment in the hiring process where a candidate's emphasis on sales enablement shifted the company's perspective. He explains how enabling new hires is essential for success in a fast-growing environment, contrasting this with the typical mindset that prioritizes immediate results over foundational training.
"interview process and he was like the most left-field candidate but he ended up being the best candidate you know I remember there was a question we had for him which was you know how much how how you..."
Avoiding Costly Hiring Mistakes
In this segment, Horowitz outlines the long-term consequences of hiring mistakes, emphasizing the importance of starting the search for executives early. He discusses the trade-offs between speed and quality in hiring, and how taking the time to find the right fit can prevent costly setbacks in the future.
"so do the five Y's just keep asking okay so why do you do that why do you do enablement who runs enablement what kind of enablement okay what do they do there and just keep asking why them the people ..."
Immersing in the Hiring Process
Horowitz advises new CEOs on the necessity of immersing themselves in the hiring process for key positions. He stresses the importance of understanding what makes a great CFO or head of sales by engaging with industry peers and conducting thorough interviews, rather than delegating these critical decisions to others.
"yeah no that that makes a lot of sense I would say the other thing you know particularly for new CEOs is how do you know what's good what's a good head of sales what's a good CFO well like the best wa..."