The Hard Thing About Hard Things: If You’re Gonna Eat Sh*t, Don’t Nibble

E71 THE HARD THING ABOUT HARD THINGS_ IF YOU’RE GONNA EAT SH_T, DON’T NIBBLE

Transcript

Dalton Anderson (00:00.942) Welcome to VentureStep podcast where we discuss entrepreneurship, industry trends, and the occasional book of you. Today we are going to be discussing The Hard Thing about hard things by Ben Horowitz. And just to give an overview, the hard thing isn't about setting big goals. The hard thing is about laying people off when you miss your financial goals or waking up in the of night from night terrors from

the stress of managing a company or the loneliness of making these hard decisions and not necessarily getting the best outcome. You're blamed if you get a good outcome and you're blamed if you get a bad outcome. It's all the same. You're both the hero and the dictator all at the same time.

In this episode, as I mentioned, I'm going to be discussing Ben Horowitz book, The Hard Thing About Hard Things. This is a book that many people speak highly of. And just from the back of the cover, I've got Mark Zuckerberg, Larry Page, Peter Thiel. And, you know, I'll just read one of them. Mark Zuckerberg.

Ben's experience and expertise make him one of the most important leaders, not just in Silicon Valley, but also in the global knowledge economy for anyone interested in building, growing, or leading a great company. This book is incredibly valuable resource. It's incredibly valuable resource and funny and an insightful read.

So today's agenda, we'll be talking about why Ben Horowitz is worth listening to the big ideas, the struggle wartime CEO mindset, making hard decisions. Wasn't able to touch on everything within this book because there's so much stuff similar to the high growth startup. I'm going to touch on things that I think are important to talk about. But if you like the content that I talk about in this episode, 100 percent pick up the book. It's like.

Dalton Anderson (02:11.086) 15 bucks and it's a great read. And also shout out to Spotify. They also have a pretty good audio book as well that you could listen to. And just overall synapsis of the book, tactical tapeaways like firing, managing morale, culture, hiring, and some personal stories that stuck with me from the book. And a lot of these things that Ben talks about is because he's managed

companies for 20 plus years and was a CEO through many life and death situations, more so than other CEOs potentially. And from his mistakes, he has created these takeaways for us. So we don't have to do the same thing that Ben did.

Okay, before we dive into this episode, my name is Sultan Anderson. As I mentioned earlier, talk about entrepreneurship, podcasting, whatever, read books. Also in my free time, I like to run, fill the side biz, and my background is data science, insurance, and coding, pretty technical. Anyways.

Let's get into who has been Horowitz. Ben Horowitz is a CEO and co-founder of Opsware. Opsware was formally called Loud Cloud before they transitioned into Opsware. Opsware was sold to HP for one point six billion dollars. And then after Opsware, he had transitioned to. A 16 Z.

And this is Andreessen Horowitz or Mark Andreessen and Ben Horowitz Venture Fund. And this was a fund that they created because they thought that there was an opportunity in the marketplace within the venture capital space to provide something that these other venture capital firms weren't. And that was these scaling expertise and teaching CEOs to be

Dalton Anderson (04:25.996) or founders to be CEOs because no one knows how to be a CEO. You've to learn on the job and it's hard. And there's like a stigma like some of these other venture capital firms. I mean, I think it's changed, but I'm talking about when they wrote this book and their experiences was that VCs would just replace the co-founder if the co-founder wasn't ready to manage the company and

then you're losing someone who's super passionate about the business. And there's a lot of pros and cons and there's no right decision. They're just hard decisions. And their philosophy was, hey, the co-founders, if they have determination and grit and willpower and intelligence, they should probably just get the right training to manage the company versus replacing somebody with somebody else.

And Ben Horowitz is through his time at Opsware is one of the most respected Silicon Valley wartime CEOs, which is really cool as well. Some of the stuff that he talks about in the book, love it. There's many takeaways and overall really enjoyed the book. So the first thing that I want to touch on is the struggle piece and.

He talked about it where like being a leader is lonely. And I kind of touched on it a little bit earlier. Being a leader is lonely. You have no one. You have no one to go to. You have to be strong. You have to be strong to your subordinates. You have to be strong to the people at your company. You have to be strong to your direct reports. You have to be strong to the media and your friends and everybody. So your circle of which you can

really express what you're going through is quite small. And Ben had talked about how the landscape has changed a little bit now where there's the Internet and people a little bit more open and there's communities for founders and CEOs to communicate. But before when Mark was going through, not Mark, but Ben, when Ben was going through all his.

Dalton Anderson (06:44.29) turmoil managing these companies. There was no.

outlet. And I think the outlet was really his family, like his internal network, which was his wife. And that's it really. I mean, it's quite close. And that's just because you got to be strong. And if you sense if the market senses weakness, then the stock price crashes. If people within the company sense weakness, then people leave. If you see an uncertainty or doubt, all of these things

Dalton Anderson (07:23.406) add up over time. And it led to Ben having consistent night terrors and waking up in the middle of the night from just being afraid of losing the people that he made promises to, to losing his team that he helped create, to losing the business or losing investors' money, all that stuff. And so talked about that and that was quite interesting. And then the next thing

is embracing hardship instead of running from it. And I think this has touched on quite a bit from philosophy or these other types of ideologies is if you have two paths that you can take.

Or maybe there's many, there's many paths. There's in number of paths and in number of path paths, you should take most likely you should take the harder one because you typically avoid hardship. Like your, your body naturally is wired to avoid hardship. Like that's just how we are. And if you go towards what the harder path is, you're probably going to get a better result. And I'm not saying

Okay, like you have an excavator and you have a shovel instead and you have to dig this massive hole instead of using the excavator. Let's use the shovel because that's the hard path. That's not what I mean. I mean, if there's one path that might be.

short term, difficult, and long term.

Dalton Anderson (09:05.646) short-term losses for long-term gains. You hear that all the time. Same thing here is you have two paths. One is quicker to get started and long-term isn't as good versus path B is short-term, short starts, long-term, this is the way it should be set up.

That's what I'm talking.

Dalton Anderson (09:32.852) And then there's a quote from Mark Andreessen that he talks about in the book is euphoria and terror. So that's that's the CEO. It's just ups and downs. So you get euphoria and then you get terror. And. Hey, it's close to the same thing like that's what you signed up for in the CEO job is. Lonely, brutal, and it never ends. And so don't quit.

Dalton Anderson (10:02.818) The part about the job being lonely and brutal.

Ben has a chapter about the role of the CEO. And one thing is just don't quit. No matter how tough it gets, no matter how much you want to just give up, don't quit. And he said that a lot of times when he really wanted to quit, he would think about his family, the people that he hired, the team that he recruited and promised, made promises to, the promises to investors. And

their people and his people. And that kept him on board close to jumping off board. But that's what kept him together. And that's the advice that he provides is, hey, if you really want to quit, don't quit. And if you need to talk yourself off the ledge from quitting your job as CEO, you need to think about the people.

It's people, product, profit. It's not profit, product, people. It's people. The people run the company. The people...

allow your success that people pay your salary. And so without great people, you don't have a great company. You don't have a great product, which you don't have profit. If you have a great product, bad people, no profit. If you have great people, you can get a great product and you can get profit, but you can't do it without people. And so this quarterstone of managing his mental turmoil and pain,

Dalton Anderson (11:52.842) was, Hey, I have this job and it's for the people. It's for the people of this company and their families and my family. And that's why I must continue. So I thought that was, it was interesting. So the next thing is this concept of war time CEO versus peace time CEO. And the two are very different and

The difference is a wartime CEO has to break rules, be decisive, confront directly. Peacetime CEOs, they optimize, delegate, they build.

to say, like they build a better tomorrow, I would say. And what does that mean? So a wartime CEO gets stuff done, moves fast. And a peacetime CEO gives people time to create, learn, upskill. You talk about decisions, maybe hold a vote. There might be some kind of board where everyone can chime in. Whereas a wartime period

the CEO just makes the decision and they move on and they move on the next thing. And the CEO will, or the company might need.

direct status updates on who is the blocker, who's blocking what and why is it still blocked? If anything takes more than 24 hours is held up for more than 24 hours. Why is it being held up? Tell me why and who and I'll solve it. I'll get it done. Whereas the peacetime CEO is like, Hey, we'll figure it out. You know, we've got some stuff to optimize. It's just a completely different ball game where there is

Dalton Anderson (13:52.968) less openness to discuss and criticize decisions. And it's more outcome based. Whereas the peace times. CEO is more about delegating and upscaling their employees and not saying that you can't upscale during wartime because wartime you're just doing a lot of stuff pretty quickly. And so you'll get to touch on many things. It's more like.

I just need to get as much done as quickly as possible and get it done correctly. Whereas the peacetime CEO might be, we've got to structure a reorg and then make a new department. And then we've got to hire the right people. Wartime is like, hey, we just got to get it done. Who do I need from each team? We're going to make a small team and they're going to go execute this mission.

Dalton Anderson (14:50.694) And I think it's an interesting difference where some, and it's talked about in the book where some CEOs are great wartime CEOs. Some are great peacetime CEOs. Ben says that he doesn't think he'd be a good peacetime CEO. And he also mentioned that some of the greats aren't both. Like for example, he gave in the book was Steve Jobs was a really good

wartime CEO, but a poor peacetime CEO. because a wartime CEO is controlling, they dictate like the direction of the company very strongly and they are. I'm not saying say micro managing, they're they're pretty they're pretty close to who's doing the work and. Also making the decision. Where?

that shines was like Steve Jobs helping recover where he took a time of leave at Apple and then he came back and he had provided this wartime CEO mentality to Apple and help them recover.

Dalton Anderson (16:15.822) And I think the last point is that a lot of startups need a wartime CEO more than they would admit it. Whereas. Like I think that people can get bogged down on everyone, you know, chiming in to make a decision. And I think these are important for. I would call them what Jeff Bezos has called a two door decision or a one door decision, sorry.

A one door decision where, you know, if you make this decision, how much resources is it going to take to revert this back? And you got to cut open the wall, build a new frame, build a door and then get everyone out versus a two door where it's like, OK, like you can go in and out.

Dalton Anderson (17:07.178) I there is, I think you should always slow down for a one door decision and then have the right courage and intuition because you're never going to have the right information for the decision, but your best decision with the information that you have presently available. But for a one door decision,

I would think that you'd want to slow down as not too much, but you'd at least like to have a second opinion at minimum.

I say that to say...

Most startups need a work time CEO more than they do a peacetime CEO. And then once the startup scales, then you need a peacetime CEO for the most

but each situation is different. Moving on to the next segment of making hard decisions. And this was quite important regarding, and it was a step-by-step guide on how to do various things that are hard. And the first one is laying off good people. You never want to lay off anybody, but you especially don't want to lay off good people. And Ben breaks down how to lay off good people.

Dalton Anderson (18:28.15) And I'm going to read off the steps that he talks about. And they're pretty quick. So there's only a couple. He's a CEO, so he's pretty brief. Get your head right. That's important. Don't delay. Be clear in your own mind on why you're laying people off. Train your managers. Address the entire company. Be visible. Be present. And so I'm going to dive into that a little bit.

because I've been laid off myself from a company that was not doing so well financially. I wasn't laid off for performance issues. Of course, I'm a beast. And I was laid off and I'd actually was on PTO and got surgery on my arm, my wrist, surgery on my wrist for assist in my wrist. And so I was out because I couldn't really type that well. I was like, you know, I can't really use my hand. So I was wise. I'll just take off.

But anyways, so at that time, I'd gotten laid off without me knowing. And I didn't find out from my manager. didn't find out from a colleague. I found out from like a random like HR email, like they're trying to get in contact. I missed my my group meeting and that they need to get in contact with me. Blah, blah. It was OK.

So I on call with the HR person and they're like, you've been terminated. And I was like, okay. And I was like, well, you know, what's the, what's the severance package and all that other stuff. And they were like, blah, blah, blah, blah, Really, I didn't know this person, never met them before.

didn't know this HR person, nevermind.

Dalton Anderson (20:26.1) they weren't too familiar with what I did at the company. They didn't really know the severance package. And so there's a couple things that weren't right about that. So their head wasn't right. They weren't in the right spot. I don't think the company delayed, but I don't think they were very clear. They didn't explain clearly like why I was being laid off. I think it was clear to me.

because I was pretty, pretty in green with the financials that the company wasn't doing well, but not everybody knows that. So they didn't explain that. And then I think one of the key things that Ben talks about is that you lay off your own people. And when Ben was

in this process, he laid off each employee himself. He was a CEO and he laid off the employees. And he talks about having you train, you need to train your managers and your managers need to lay off their people because once the company gets big enough, they're not interacting with the CEO all the time and they're interacting with their team and their manager. And you don't want some random person telling you that you're laid off.

You want to hear it from the person that's your boss or the person that you're working with every day for years. You don't want to hear from some random person, which I think is 100 % true. Like it, I would feel a lot better about it if it didn't, it wasn't like it bothered me or anything, but I get Ben's point where if I, I would have a different perspective and a different taste in my mouth if my manager laid me off and said, Hey, financially we're not doing that well.

We've got to make cuts. You're being terminated today, Dolan. And appreciate you. Here's your severance package. And if you need help getting a job, I've got some connections. And I'm willing to do a recommendation for you. That's big. I got some blanket statement from HR, like one paragraph, like blah, blah, blah.

Dalton Anderson (22:44.91) And it's not, it doesn't feel good. And getting laid off doesn't feel good, but I think there's a right way to lay somebody off. And when I was laid off, it wasn't the right way. And I think that's pretty clear. And it's, it was clear to me. I think it was clear to other people that when I wasn't there in the group meeting was they got like a hundred plus people in a meeting and they just laid them all off. said, all right, see ya. Sayonara.

versus each manager laying off their team and getting with these people, which is not the right thing to do.

Because people that got laid off, they were there for 15 years. 15 years of their life they were laid off. And I'm not saying the company owes them anything, but the right thing to do would be to call them up, their manager called them up, let them know that they're being laid off. Takes like 10 minutes. That's it. You can't give somebody 10 minutes, they give you 20 years. yeah, I 100 % agree with those steps.

The next one was about demoting loyal friends. And this one is really difficult and you always have these weird emotional conversations with your friends sometimes about big disagreements, either it be politics or it be about their stance on, I don't know, your relationship with somebody, with your partner or whatever it may be, right? And

the same thing can happen in the workplace. And, you know, especially when you're starting a company, you hire within your circle and within your circle, probably some of those people are your friends. The issue with that is not everyone scales. And you'd learn that from the episode that I talked about with the high growth startup.

Dalton Anderson (24:40.766) it doesn't scale. Not everyone scales with the business and that could be because of skill. That could be because of attitude. It could be a lot of things, but the simple matter of the fact is that not everyone scales with the company. And then also not everyone has the right skills to manage multiple people and they might be good individual contributors, but not good managers, but they want to be managers. And so there's all sorts of

reasons why you'd have to demote a loyal friend. So Ben, of course, breaks it down for us.

One of the most important things is going in there with a clear head and using appropriate language. This is your friend. You're going to have a moat strong emotions in this conversation. Either it be betrayal or anger, disappointment, all of those regret, all those very strong emotions are going to be

in this conversation when you're having it. And it's important to use direct language that is appropriate where there is no backing out of the decision. It's not an I think or I'd like you to do this, I think so. It's I have decided. I have decided, Dalin, that you are going to be X or.

I have decided this is going to happen. It's way different. And then the next thing is to admit reality, to admit where you're at, like where your skills are or where you're at, like where they're at. Like I'm saying where you're at, but you know what I mean. When you're having this conversation, admit where the company is, where they are skill-wise and acknowledge the gaps. And the last thing is to acknowledge their contributions.

Dalton Anderson (26:46.956) Let them know that, this is amazing, the things that you've done. You've been incredible at the company. I really hope that.

You will be willing to continue here with this new position, this new role.

Dalton Anderson (27:05.388) If not, I've got some connections and we can help you out. Something like that.

Obviously more direct, but I'm not in the right head space to lay off an imaginary friend at the moment. But I'm sure eventually one day I'll have to do that. So the next thing that I liked was letting executives go. And Ben talked about how executives are more sophisticated than normal employees, which is definitely true. And there's a lot more work that goes into recruiting them.

There's a lot more work that goes into the approval process, the compensation, and that all is intertwined with laying off a letting an executive go is a big deal from an organizational standpoint and from a perspective of outsiders looking in or insiders looking in. And so the first thing that

talked about is there's a couple different types of layoffs. There's one where it's incompetence and or just like poor fit. Like they're not they're not doing their work right. That is pretty rare and easy to recognize pretty quickly. And I think the way that I shouldn't say I think Ben talks about in the book that.

If your CEO or not CEO, if your executive doesn't take off a lot of work from you or from other people pretty quickly, like like within like a month, you just let them go. Like if they can't get settled in, if they're not asking the right questions, if they're if they're not acting on their own and getting with the people they need to and getting settled in the org, then it's it's a pretty easy decision. Rare, but.

Dalton Anderson (29:04.105) If that does happen, then just cut it loose. If they have been around for a while and they looked like a good fit, but seems like things aren't working out, the first thing you should do is a root cause analysis. Root cause analysis, what happened? What was the mistake? Was it the mistake not providing enough

Dalton Anderson (29:29.236) leeway and authority was it that they didn't outline the position properly? Was it that we thought that there was a different culture of that? Like understand what happened, what went wrong. Then the next thing is to inform the board and then you've got to prepare for the conversation. And then you've got to prepare the company communication, all of which happens like all at once like.

the communication in the conversation like they happen pretty quickly. Like those are those are almost like async. And the last thing or a couple last things was the two personal stories that I quite liked. One was the cancer treatment story of this section. Of course, the last one was this last two. I keep saying the last one in this section. I've got two last stories that I want. I've got two stories I want to talk about. Wow. I want to say last, but.

there was an acquisition that Opsware had made to keep their large contract with a vendor. One of the guys that they were dealing with didn't like them. He hated vendors and he hated his life and all sorts of stuff. And the only people that he liked was this like small company out in North Carolina or something like that. And so they acquired him and

kept the business contract with the company and during the acquisition, they had really just acquired the technology and some of the talent, but let go of the executive leaders. And of those executive leaders, one was the CEO of the company and the CEO at the time, not unknowing, notes to him, he had cancer and for him to get treatment,

It was going to be $200,000 and from the acquisition, he no longer had healthcare at the time, like health insurance. And so the decision was one, you could not pay them or not pay the CEO for their treatment because they had no financial obligation to do so. you could pay for

Dalton Anderson (31:53.912) the CEO's treatment and.

do the right thing. In this story, they chose to pay for the CEO's treatment, which at the time was a significant amount of money because Opsware wasn't doing that well. And so it was a lot of money and it wasn't something that like they didn't have a hundred million dollars and like, oh yeah, it's 200 grand. Like who cares? Like, you know, they might have, you know, a couple of mil in the bank.

and like they're giving out 200 grand for treatment. So it was, was a lot of money. Just want to emphasize that and.

It was a decision that Ben had made because it's the right thing. And one, you you want to be remembered in in history as as a hero more than a villain, even though however you remember it is people's personal choice. doing the right thing.

when you have the choice is normally the right thing, right? And when Ben had paid for this treatment, eventually the CEO had still passed away, unfortunately. Years later, his wife wrote a letter

Dalton Anderson (33:25.824) wrote a letter and

the the zero wrote a letter and the

Dalton Anderson (33:39.97) Hold on one moment.

Dalton Anderson (33:53.004) Okay, so the CEO wrote a letter and not the CEO, but the wife's, the deceased CEO's wife wrote a letter to Ben years later, talked about how thankful she was that he had paid for the treatment even though he didn't know him and he had no obligation to do so and how it, that.

Dalton Anderson (34:19.128) goodness in his heart gave her the will to keep on living and all sorts of stuff. And it was a very touching letter or he could have just not paid for the person's treatment, either that or do the right thing. And also like, what does that say about you as a leader when things are going that well or you want to cut things short?

What are your employees going to think if the person that you just acquired this company recently just got cancer, didn't know about it and was going to die and you just didn't pay for it because you didn't want it or you didn't have any obligation. What does that say about you as a leader? Like would I want to work for somebody who does that? The answer is no, especially the good people. The good people will

the good people will be like, that's a red flag. Maybe the people that just want a job, they're fine with it. But the people that you really want to hire, they care about those things. And the next one was if you're going to eat shit, don't nibble, which is a really, really good line. I think it's on page 28 of the book. And it's really about they had forecast their financials and when they went public.

And the first quarter of the financials, like before they were about to do earnings, they noticed that they weren't going to make their forecast and they were going to miss them by quite a bit. And yes, it is on page 20. I just looked up. And they're going to miss their forecast by quite a bit. And the CFO at the time, like they were like, what do we do? And we could, you know.

do something out in the market, tell the marketplace that we're going to miss forecasts. But if you miss a forecast your first quarter, it's a big deal. And then basically it's like, you don't know what you're talking about. Like we went to the market and priced all this stuff into the stock because these forecasts that you gave us and now you're saying the forecast are wrong. It's like what's going on here. So basically the stock price would tank or you miss forecasts by quite a bit during earnings and then the stock price tanks.

Dalton Anderson (36:42.152) So they decided if you're going to eat shit, don't nibble and just eat all at once, which was a great saying. And basically the outcome of that story was they made the announcement to the public that they're going to miss earnings by quite a bit. And the stock price tanked, but later recovered. And they got to be the tellers of their own story versus people telling their story.

Okay, so the next segment is about building culture and company. The first thing is culture is what you do, not what you say. And Ben, as the wartime CEO, cursed a lot. And he cursed a lot because of the emphasis of the curse word provided a little bit more urgency and strong emotion on the direction that people needed to take. And so he was cursing quite a bit. And that led to the

company having a culture of cursing. And what that meant was that people were cursing a lot in their meetings and they were cursing and it was becoming common, which could be good, could be bad. It's kind of like, Hey, it is what it is. These are pros, these are cons, but people had also complained executives to complain that people are cursing and some people are uncomfortable with it and they should ban cursing. So what Ben did was he had

done some research on other companies in the tech space in Silicon Valley and asked like how frequent are people cursing him and what about profanity? What's your stance on profanity? And basically their stance was like they allowed it. So from the research Ben was like,

Other companies allow profanity. I've been cursing too much, but it also is a habit I have because I'm in the wartime. I'm wartime CEO right now and that's what the wartime CEO does. And then he had also talked about how, well, if I ban cursing, then the people who like to curse and think that's whack that I banned it will just leave and I can't have that. But then the people that don't like cursing and people are cursing, then

Dalton Anderson (38:55.126) They'll leave too. So what do I do? So.

Ben comes on an all hands meeting and says, I've been getting some complaints about cursing. And I want to make sure it's clear that cursing that involves harassing or inciting violence or sexually harassing employees is not acceptable. Cursing.

He basically like what what curses are like when is cursing inappropriate versus appropriate? And that's what he outlined. And he said, it's hard to say what's appropriate and inappropriate, but you know it when you see it. And. That's very true, and it's really a story of like, hey, your culture that the company creates is also a reflection of the CEO and leadership. And it's really what you do, not what you say.

The next point is training matters more than people omit. And this is a segment that Ben talks about and he really emphasizes training because he loves the book High Output Management. And I that on my list as well. But High Output Management talks about training and having a large workforce be just 1 % more efficient in what they're doing is a massive gain throughout a whole year.

with all your employees. so either training your employees or getting them onboarded quickly is huge. Like the gains that you will get are massive and that's why it's important. But a lot of times training is not emphasized and a lot of companies don't do training correctly either. And so having the right documentation and training is very important.

Dalton Anderson (40:54.51) The last one I really liked was the next point that I really liked was hiring for strengths, not lack of weaknesses. And I think this is more prevalent with executives, but also could apply to employees where you are trying to hire an operations person that they also want to be technical and they want this and that. And what you wind up getting is somebody that's just an all rounder.

but that's not an all rounder isn't strong in any area and not being strong in any area gives you a disadvantage when you're trying to compete with a strong team. And the issue of that is that when you don't have anyone who's strong in any given area, you've got no true talent, right? Like you have somebody that's just good at everything or okay at everything say okay at everything, but you've got no one that's exceptional.

at one given thing. And so that your your gains are really on the exceptional, not really on the OK or the good. And emphasizing that is, you know, you don't hire for the all rounder, you hire for the for the strengths. And one was the sales executive that Bennett hired that people didn't like because they made him feel uncomfortable. And he was a little rough around the edges and he was. Not the typical sales guy.

but he was one of the best salesmen that he ever hired.

That's the emphasis of hiring for strengths versus an all-rounder. You've got to be okay with the cons if the pros are strong enough.

Dalton Anderson (42:42.446) avoiding management debt. And there's a couple things here. So there's putting two in a box, overcompensating a key employee because they got another job offer, no performance management or employee feedback process. So putting two in a box, I've seen this before at a company and it's bad. It's really bad. So basically putting two in a box means you have two talented employees or leaders and you want to keep both of them. They work in similar departments.

So but they have different, they have different skills. One might be more sales, one might be more technical. And so. But they manage the same department like they're both they both have talent to be a leader and they both want that. So you're like, OK, well, one will be the leader of the group and they'll like co-lead like one will be the sales leader and one will be like the technical leader. What happens is people either within that team or externally, they don't know

who to go to for the decision. They don't know what is going on. And then if there's any disagreements, then who is the tiebreaker?

It's a mess. Don't do that. You've got to just go with one instead of two or put one of them in a different, completely different apartment and split them off into a different area. You can't have two people in the same box. It doesn't work.

overcompensating a key employee. The issue with overcompensating a key employee is that because they got another job offer is because that creates a culture of the squeaky wheel gets to grease. And what I mean by that is that the squeaky wheel gets to grease is if you complain or if you do these things, then that's how you get paid. And so what happens is when you're on a team, people are thinking about leaving.

Dalton Anderson (44:41.134) They chat to their team members like, oh, you know, I'm thinking about leaving and blah, blah, blah, blah, blah. And then later on, they get a job offer. They probably consult some of their employees potentially, and maybe they don't. But the other employee knows that they're looking. And then later on, they're staying. And then the employee asks, like, why are you staying? And then

the employee that got the raise was like, well, I'm staying because I got another job offer and they countered or something like that. And then that says to the other employee that didn't get a raise, well, if I want a raise, then what I need to do is get a counter offer and my counter offer will get me a raise. I don't want to leave the company, but I want more money. And so if I get a counter offer, I can get a raise. Perfect. Exactly what I'll do.

And it creates a culture of where people are getting counter offers for raises, even though they have no intention of leaving and you're overcompensating employees for no reason. So that long term will cause significant issues. There are always going to be exceptions to the rule, but these are like general guidance. No performance management or employee feedback process. This is great because it.

It takes out the political nonsense that gets created at a company where people are becoming friends with leaders and asking for things or pushing for stuff, complaining, this squeaky wheel gets to grease kind of thing, and doing these political battles or moves to get promotions or raises. Whereas other good performers that don't do that won't get anything.

And then it creates this culture of this very political company, which you don't want because that's unproductive. So to counter that, you create a employee management and feedback board where your supervisor will submit you to the board for a promotion or a raise. And then the board approves it and they review all the employees and those employees are given by the board's decision.

Dalton Anderson (47:06.604) the outcome that they may or may not desire. But it takes out the individual decision that the supervisor makes or these other people. It takes out all the nepotism. It's straight up the board's decision. And the board is a vast group of people. Not too big, but you know what mean? Like it's not like the one department's people and they're like, I'm only going to I'm only going to help out my people. So that's really good. And removes the

political moves that are the company from getting too political. the next section is just quotes that I liked. Nobody cares, just run your company. Nobody cares you're sad or that you want to quit or that you don't feel like doing it today. Just run your company, man.

Dalton Anderson (48:00.302) Every girl is a hero and every every hero and coward feel the same fear. And I don't know why, but. Yeah, the hero and the coward feel the same fear. And basically, it's that that pit in the stomach where you're like, I don't know about this, like you're all shaky, you're nervous. And that could be fear or that could be excitement. They're all the same.

There's no formula, that's the hard thing. There's no great decision. You're never gonna have the right information to make the decision. You're never going to.

Dalton Anderson (48:42.254) be in the perfect spot at the right time to make the decision. You always are gonna be given tough decisions in life and you've gotta make the best decision at that given time. The more you delay stuff, the more that you potentially put yourself in ruin. And to not make a decision is a decision. And I think...

On important things in life, you should take time. Like I took a lot of time to research where I wanted to live. You should take your time. But when you've got to make a pressing decision, you've got to make the decision.

All right, so that was Ben Horowitz.

Battlefield test of truth, no fluff. I really enjoyed this book and I think it's important for anyone who inspires to lead either your coach or if you want to help lead your family or you want to become a more rounded person or you inspire to run a company one day, either via CEO or executive or founder or maybe a little bit of both.

This book is really good. I highly, highly suggest this book. And if you liked the episode and you found it, it was insightful. Give us subscribe, a like, wherever you are, share it with your friend. And if you really feel strongly about it, leave a review. Sorry about the weird set up today. I don't have my typical set up because I just moved and some all over the place is a bit crazy, but hope that I wasn't too distracted. But

Dalton Anderson (50:29.836) Once again, as always, have a good morning, a good night, a good afternoon, wherever you are in this world. Appreciate you listening in and hope to hear, or wait, I hope you listen in next week. See ya, goodbye.