I’ve read countless books on leadership and management. Many are packed with valuable insights, but few prepare you for those brutally tough times. Sure, models and targets help, but a polished strategy document isn’t going to waltz into HR and handle a hard conversation for you.
“I know you’re worried about paying rent, Geoff, but have you seen my elegant SMART targets?”
This is why I was excited to find a book that dives into the real tough truths of leadership – even if reading it sometimes felt a little like rubbernecking...
The Hard Thing About Hard Things by Ben Horowitz gives an unfiltered look at the grittiest realities of startup leadership. As a tech entrepreneur and co-founder of a venture capital firm, Horowitz knows firsthand the brutal challenges of Silicon Valley, and he doesn’t sugarcoat any of it.
The Peter Principle
So, what are some of these “dirty truths” of leadership? One of the best-known theories that hits right at the heart of working-life awkwardness is the “Peter Principle,” coined by Canadian sociologist Dr. Laurence J. Peter. The premise is simple: eventually, everyone is promoted to one level above their competence.
It sounds funny, but there’s truth in it, as New Scientist illustrates:
An electrician doing excellent work on the factory floor might not have the interpersonal skills needed to manage a team of electricians. A skilled and sensitive doctor might flounder when faced with the multitudinous difficulties of running a hospital. A cabinet minister prudently managing the finances of a nation might not necessarily be the best choice to step up and lead it.
The point? The talents that help someone excel in one role don’t always translate to a new one. Without the right support, they might lose the spark that made them excel in the first place.
Horowitz puts it a bit less politely with his own addition to leadership lingo: “The Law of Crappy People.” He argues that organisational talent will often slump to the level of the least competent person in a position. Employees often benchmark their performance against the "weakest" link, and when everyone’s aiming at that low bar, quality dips fast.
As Oliver Burkman explains in The Guardian:
As soon as someone on a given rung at a company gets as good as the worst person the next rung up, he or she may expect a promotion. Yet, if it’s granted, the firm’s talent levels will gradually slide downhill. No one person need be peculiarly crappy for this to occur; bureaucracies just tend to be crappier than the sum of their parts.
To combat this, Horowitz recommends establishing a disciplined and structured promotion process. Much like martial arts dojos require a combat challenge for a higher belt, promotions should be based on clear, well-defined skill criteria at each level. In other words, we can only progress with Mr. Miyagi’s approval!
A friend in need of Indeed?
Horowitz also tackles the nightmare scenario of demoting a loyal friend. He describes the situation of hiring someone more qualified to take over a role previously held by that friend – someone who may have been hard-working but lacked the experience needed to drive the company’s next phase of growth effectively.
While gut-wrenching, an organisation’s broader needs must take precedence over personal loyalty:
The first question that always comes to mind is ‘Do I really need to do this? Who could I possibly hire who will work this hard and bleed the company colors like this?’ Sadly, if you’re asking the question, you very likely already know the answer.
Delivering this kind of news is a delicate task. The friend will likely feel both embarrassed and betrayed – embarrassment over explaining the demotion, and betrayal at being sidelined despite loyalty and hard work.
So, aside from wanting the floor to open up and swallow you whole from sheer awkwardness, what’s the plan?
Horowitz says that clear communication is key and advises staying emotionally neutral. There’s a real possibility that the friend may quit, so it’s crucial to stay open-minded about what comes next, including the potential role the friend might take on if they do decide to leave.
When delivering the news, honesty and fairness are key. Using firm language, such as "I have decided," helps avoid ambiguity. It can also be helpful to admit to your own limitations as a leader, especially if you share some of the same inexperience as your friend.
Another bestselling leadership author, Kim Scott, suggests that the best professional conversations strike a balance between what she terms “ruinous empathy” (excessively worrying about others’ feelings) and “obnoxious aggression” (challenging someone without any regard for their feelings). She calls this sweet spot “radical candor” – a deliberate balance of caring personally for the colleague while also challenging them directly (a concept I wrote about previously in my blog “What We Can Learn from Netflix”).
Ultimately, conversations like these will be painful – but exactly how painful is largely up to you. Ideally, demotion news should never be a complete shock if management has been transparent along the way. It doesn’t benefit anyone to provide only positive feedback, only to later pull the rug out from under them with little to no warning – friend or not.
Tell me sweet little lies…
But it’s not just employees lower down the management food chain – Horowitz also exposes toxic habits leaders fall into when it comes to honesty. Struggling leaders often spin comforting lies to dodge the truth, like claiming, “We were going to fire them anyway,” when a star colleague leaves, or blaming competitors when deals fall through.
He’s particularly scathing about the spin businesses put on losing customers:
'We have a very high churn rate, but as soon as we turn on email marketing to our user base, people will come back.’ Yes, of course. The reason that people leave our service and don’t come back is that we have not been sending them enough spam. That makes total sense to me, too.
Horowitz reflects on his own experience during the early 2000s dot-com crash, when top CEOs continued to offer overly optimistic outlooks despite clear signs of failure:
When the facts don’t align with the good news, a clever manager will find the narrative to make everybody feel better – until the next meeting.
These CEOs weren’t necessarily lying to investors – they were lying to themselves, selectively focusing on the positive indicators while ignoring the negative signs. He explains how this positivity bias can begin to take hold:
If a CEO hears that engagement for her application increased an incremental 25 percent beyond the normal growth rate one month, she will be off to the races hiring more engineers to keep up with the impending tidal wave of demand.
He continues:
On the other hand, if engagement decreases 25 percent, she will be equally intense and urgent in explaining it away: ‘The site was slow that month, there were four holidays, and we made a UI change that caused all the problems. For gosh sakes, let’s not panic!’
Many leaders tend to embrace good news eagerly but often dismiss or react defensively to bad news, even when its impact is just as crucial. Horowitz warns against selectively curating and internalising only positive narratives.
When employees start making similar excuses, leaders should recognise it as part of a broader pattern of self-deception. Accepting these rationalisations without question can trap leaders in a cycle of self-delusion, ultimately blinding them to the reality of the company’s challenges.
A Disney-inspired fix for disharmony...
Horowitz also shares a surprisingly creative tactic for resolving conflict between two strong-willed teams.
Once upon a time, his Customer Support and Sales Engineering teams were at each other’s throats. Sales Engineering accused Customer Support of not addressing issues with enough urgency, while Customer Support claimed Sales Engineering were uncooperative and submitted unqualified bug reports. The tension created a toxic atmosphere, but the managers of both teams were excellent, and there was no one to demote or fire.
The problem seemed unsolvable until Horowitz found inspiration from an unlikely source – Freaky Friday: a body-swap comedy where a mother and daughter unwittingly trade places:
By being inside each other’s bodies, both characters develop an understanding of the challenges that the other faces. As a result, the two become great friends when they switch back. After watching both the original and the remake, I knew that I had found the answer: I would employ a Freaky Friday management technique.
And so, Horowitz decided to “Freaky Friday” his teams. He swapped the heads of Customer Support and Sales Engineering, and the results were remarkable: after just one week of experiencing each other’s challenges, the two teams quickly identified the root issues and devised ways to resolve them.
And they lived happily ever after. Kinda...
The approach led to harmony, and from then on, they collaborated better than any other department – all thanks to a Disney movie!
War and peace
One of the biggest takeaways from Horowitz’s book is that there’s no one-size-fits-all leadership style. Instead, he talks about “Peacetime CEOs” and “Wartime CEOs” – leaders effective in different phases of a company’s lifecycle.
A “Peacetime CEO” focuses on market expansion and nurturing company culture, serving as a jovial coach during stable times. A “Wartime CEO,” on the other hand, must make fast decisions, often without complete information, to navigate crises. Horowitz recalls the first time he felt he was in “wartime mode”:
The company would live or die by the quality of my decisions, and there was no way to hedge or soften the responsibility.
Whether in war or peacetime, a recurring theme is the resilience needed to endure the journey of a fledgling leader. Horowitz shares personal anecdotes, including his struggles with anxiety and insomnia, highlighting the often-overlooked mental and emotional toll of running a startup. He stresses the importance of founders taking care of their mental health, prioritising family, and seeking support when needed. His openness serves as a vital reminder that vulnerability and strength can – and should – coexist.
And it’s not just about leaders. Horowitz observes:
The more experience you have, the more you realise that there is something seriously wrong with every employee at your company (including you). Nobody is perfect.
This understanding of human flaws is vital when hiring new staff. He recommends following Colin Powell’s advice: hire for strength rather than lack of weakness.
Horowitz recounts a philosophy from Netscape’s Jim Barksdale: “We take care of the people, the products, and the profits – in that order.” Taking care of people goes beyond perks; it’s about creating a culture where employees feel valued and clearly see how their efforts contribute to company success. That’s what builds innovation and dedication.
There will always be tough times in any organisation, but these shouldn’t stop us from practising radical candour, telling the truth, and finding innovative ways to encourage empathy. By staying true to these principles, we give ourselves a real shot at what Horowitz calls the most important lesson in entrepreneurship: “Embrace the struggle.”
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