What’s The Most Difficult CEO Skill?

Ben Horowitz is perhaps the most thoughtful and insightful VC blogger anywhere. His post What’s The Most Difficult CEO Skill? Managing Your Own Psychology was highlighted in a separate post by Fred Wilson. Fred may be the second best VC blogger around. My problem is I do not agree with what they say.

Horowitz states:

If you manage a team of 10 people, it’s quite possible to do so with very few mistakes or bad behaviors. If you manage an organization of 1,000 people it is quite impossible. At a certain size, your company will do things that are so bad that you never imagined that you’d be associated with that kind of incompetence. Seeing people fritter away money, waste each other’s time, and do sloppy work can make you feel bad. If you are the CEO, it may well make you sick.

And to rub salt into the wound and make matters worse, it’s your fault.

My problem with this statement is that it is a very self-centered view of the CEO. Yes, the CEO is ultimately responsible but where were the COO or CFO or CIO. A key to building large companies is to delegate responsibility. If you go crazy over money being wasted, for example, maybe you hired the wrong C-level executive. If you could not afford for some money to be wasted, you should have approved every contract or check. 

Horowitz said:

If someone was promoted for all the wrong reasons, that was my fault. If we missed the quarterly earnings target, that was my fault. If a great engineer quit, that was my fault. If the sales team made unreasonable demands on the product organization, then that was my fault. If the product had too many bugs, that was my fault. It kind of sucked to be me.

Being responsible for everything and getting a 22 on the test starts to weigh on your consciousness.

Getting a 22 on the test is not really important, as Ben knows. Staying in business and growing it are the important goals. I think back on the problems I went through managing a company in Asia:

1. The 1997 Asian Financial Crisis, when the currency devalued by 80 percent
2. Having all my bank lines cancelled
3. Having my lead bank twice cancel my bank lines
4. Having 7 store fires in three years, one of which occurred the day before a road show
5. Collecting a $30 million insurance claim from rioting in Jakarta
6. Wal-Mart entered the market

Wal-Mart really scared me and the store fires really concerned me until Kroll could find no evidence of a conspiracy to burn us out of business. After one or two total disasters you learn to roll with the punches and each subsequent disaster gets much easier to handle both psychologically and as a business problem. What we should probably teach CEOs is not to be really concerned until there are riots in the streets and/or they hear gunfire. Up until that point, just carry on, which was a point Horowitz made in closing his post.

Horowitz also made some good points about how to handle the stress of being alone at the top as CEO:

1. Make some friends with emotional maturity
2. Write about the problem; it may help you to separate the decision from your psychological demons
3. Focus on the road (stay focused on what is important)

I agree with the focus point. Absolutely critical and more critical as things get worse. I would add two recommendations:

1. Exercise more, it always helps to reduce psychological problems
2. It's therapeutic to look after the staff who may have bigger issues than you are experiencing; putting problems in perspective relieves stress