505: How to Be a Good Wartime CEO

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Steli Efti: Hey, everybody. This is Steli Efti.

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Hiten Shah: And this is Hiten Shah.

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Steli Efti: And today on the Startup Chat we’re going to talk about being a good wartime CEO. What does it take? What does it look like? What is it? How could it be useful to know more about this? You use this framework potentially during these difficult times. So first maybe we’ll break down for the listener the concept of peacetime CEO and wartime CEO. First time I heard about this was Ben Horowitz’s book, The Hard Thing About Hard Things. I think he’s the first one to use this metaphor. I’m not sure if he stole it from somebody else. I haven’t read that book in many years, but something tells me maybe not a bad book to read right now.

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Hiten Shah: Definitely not.

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Steli Efti: For some people, it just describes very difficult times, very difficult decisions for a CEO. But the way I remember his breakdown on wartime and peacetime, and then I want to focus on the wartime metaphor is that he basically describes, hey, there’s different phases a company can go through, and during the peacetime for a company, it means the company is not under any direct threat by a competitor, by industry, by markets, by whatever. And it is growing and it’s prospering. And so, it’s a time where you as a CEO, you have to manage that growth, that prosperity, you have to stimulate creativity. And it was describing how for a long time Google was in peacetime, right, not on the really aggressive attack of competition and all that. And there’s a very different mindset and leadership style that’s required during peacetime as a CEO versus wartime. And wartime is the exact opposite. Your company is under direct threat either by a competitor, by an innovation technology industry market economy, or like we are probably right now, the entire world is on fire, we’re in a global pandemic and that might create a ton of economic attacks to the lifeblood of your business. So a lot of companies are under some level of a threat right now. Will we survive this time? How will we survive this time? And wartime CEOs have to be very different in the way they think and manage and they lead their troops during this time. So, I die to hear your thoughts on this, even on this peacetime, wartime framework. Do you like it, do you hate it? And then, let’s maybe unpack a little bit about what it takes to be an effective CEO during these times that maybe is different from others.

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Hiten Shah: I am actually a big fan of the framework. I have a build on it. I have a build on it, and it’s kind of interesting. So, I don’t think there’s such a thing as peacetime CEO.

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Steli Efti: Okay.

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Hiten Shah: I think that’s the conclusion I have come to when I think about that analogy and that content and that way of thinking about it. The reason I would say that is because, if you think about tech tack, which I’m sure a bunch of people who listen are in. Maybe not, just kidding. Definitely so. And some people might not be in. And you think about it, and this analogy applies if there is any peace to be had in a business. And in a business, most of the time, you’re not trying to be peaceful, you’re not sitting there having no competition, you’re not sitting there everything being fine and okay. And so, I think a wartime attitude is important all the time. That being said, and big caveat, the way that the wartime and peacetime has been described, it’s kind of like in wartime, anything goes. Your level of patience as an executive should be lower. Things like that. I get it, but then you’re almost asking for a tyrant mentality in a way.

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Steli Efti: Yeah, I think it depends.

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Hiten Shah: So, to me, it’s tough to even say, “Hey, it’s never peacetime.”

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Steli Efti: So, I like that because there’s definitely truth. It seems to me that there’s truth in that, it’s just a question of awareness or maybe a question of severity of the attack. Right? Sometimes you might not know. We all know the famous book, Only the Paranoid Survive, and all the stories from Bill Gates back in the day. That was just always in a paranoid state that some small startup in some garage is going to kill Microsoft. Right?

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Hiten Shah: Yep.

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Steli Efti: So there’s something to that, that even when you think there’s no attack on your business and things are going beautifully well, there is an attack somewhere. There’s a threat somewhere, right? You’re just not seeing and feeling it yet. Right? It might be years away from you or it might just be around the corner, you’re just not aware of it. So, in that sense, I think that you are absolutely right. I think the part of it that’s about style, right, during wartime you are going to work less to figure out consensus and get buying. The idea in general is think about it as a captain of a ship and now you’re in a storm. And in a storm, you will have less time to make decisions, hands, you need more of a military style. We discuss the options, I make the call, you go and execute, versus if it was beautiful weather, we might not have to have the discussion, the decision making and the execution done in five minutes. Right? With very limited-

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Hiten Shah: But why not?

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Steli Efti: Very limited conversation. I think that the reason why not is that the threat of life and death isn’t there, which gives you more time to explore, because the risk of being wrong is less and the benefit of time maybe is less direct. Right? I get what you’re saying, because if it’s right to lead in this style when you are in a storm, why isn’t this necessarily a bad style to lead the ship, let’s say, during sunny weather? I just think that context does matter to some degree. And if you are drowning and I scream at somebody to throw in a lifeguard or something, they understand that when I was screaming at them, it was not aggression towards them, it was not anger, they don’t need to feel attacked. The context, the severity of the situation makes it that I screamed because this is life or death, so nobody’s going to take an issue with it. But if we’re sitting around on a sunny day and I scream at you to give me the lemonade, because of the context of that situation, you might feel attacked and you might feel that that was inappropriate.

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Hiten Shah: So, then the question is, does this duality here of the difference actually just promote bad behavior?

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Steli Efti: I think it depends. I think for people that want to act in a shitty way or that are interested in being egocentric, that are interested in just having everybody do what they say, yeah, I’m sure that… Listen, I think that people that are shitty during normal times are just, it amps it up to 1,000 when things are bad. We hear all these examples right now where a company fires 200 employees through a Zoom call with an automated voice message. Right? That’s the worst way to let go of everybody.

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Hiten Shah: Yeah. And here’s what’s funny. I know that company, I know people that work at that company.

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Steli Efti: Yeah.

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Hiten Shah: And I actually think they did the right thing. But I know the company, I know the people that work at the company, and I know why they did it like that. And I also know how fast they did it. And so, in a way, it’s like, is that bad behavior? So, here’s what I’m trying to say. I think you’re always at war in a business. I just think that’s just true. You happen to have sometimes when you have an excuse as an executive or a founder or CEO or whatever, that you can get away with more abruptness in order to make the team and the company and the moves just happen faster, even if people don’t fully grasp them. The problem with that is when you take that to an extreme, even during extreme times, and then you just either burn out your people or people end up just leaving, probably both. And so, I think the right way to think about this wartime versus peacetime is a lot more situational. And by being able to communicate to your team consistently in the right ways to get them motivated to do what’s right. And that’s really why I think this duality of wartime versus peacetime and the explanation of it exists, because people tend to have a hard time to get other people to do things. And so, if it is at wartime and we can say it is because of the environment or the situation, then we are given a lot more latitude to be abrupt and push and make mistakes like the ones like the companies you’re referring to might have made. But in wartime, the most important thing as you put it would be speed of execution, speed of changes, speed tactically. It’s a lot of tactical stuff. You don’t actually necessarily have the time to be strategic like you might normally. My friend, I was talking to him a few weeks ago, and I was just talking about some things, and he’s like, “You know, right now would be the time to execute, not to think about strategy.” And I thought about that, and I’m like, “Well, most of the time you should execute and not think about strategy so much that it’s preventing you from making decisions and moves.” And right now I think the whole idea of revolving door decisions, so ones where you can walk through the door and walk back versus ones where you walk through the door, you can’t walk back. I think that concept might be thrown out the door right now, because you can almost walk back from anything you do right now, because anything goes.

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Steli Efti: It’s so interesting because I think we look at two of the opposite extremes of this framework. I think I completely agree with everything you said, that people will take this time as an excuse to lead in an unproductive way. Right? Or to exhibit behavior that’s unproductive, or sometimes it’s erratic. Right? And they’ll excuse everything they do, everything they say, they’re flip-flopping, they’re panicking by saying, “Well, it’s wartime, so I’m being different.” That’s shitty. All right? That’s not going to be good, not in the short, not in the long term. I look at the other extreme. I look at the people that have never been in a life or death situation, that have never operated within that context, and that are terrified of operating differently from how they used to. They don’t know how to step into a mode that’s different. As I said, if you are in a military situation, there’s gunfire at you and you have a couple of people that you’re responsible for, it’s a different context and you have to behave… The core principles of leadership still apply, but you have to operate very differently from when you were barbecuing with a bunch of friends and shooting the shit. It’s a different situation.

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Hiten Shah: My whole thesis, and maybe this is it for me at least, is why don’t we treat our businesses like that more of the time? That’s what I always get when I read this stuff, besides the fact of being abrasive and all that. You shouldn’t be that, but wartime CEO content tends to talk about just the difference between wartime and peacetime. What I’m saying is why is there a difference?

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Steli Efti: I think that’s a fair point. And I think that if you look at a lot of very successful CEOs, it probably operated more often than not as if there is war, even if nobody else was aware of it. Right? Or they instilled that urgency and that we have to beat the competition or we have to beat this new innovation more aggressively than most people would think is necessary. Right? So you might be completely right. I think that the reason why people don’t do it is because it’s not everybody’s… A, I think most people would burn out at that level of intensity. Right? Most people, if they have to live their entire life as if they’re in a war situation, would burn out. Life would suck if you acted every day as if you’re under fire and your life is under threat. Right? I don’t think that that is necessarily a great way of living life. Hence, I think that people will extrapolate that to the way they want to work. Most people don’t want to work with the level of intensity of life and death for the business, their career, or this project every single hour, every single day. They can step into that mode and they’re willing to operate within that context for a limited amount of time, just like you said, or they burn out. But they’re not able to do that for long periods of time. And when you think about the kind of CEO’s that we all heard of that were tyrannical in the demands they made. Oftentimes, most people couldn’t really keep up that intensive for that long and would burn out, and only very few could do that for a very, very long time. I think that’s what it is.

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Hiten Shah: Yeah, I agree. I think that makes a lot of sense. So, I would just encourage folks, like right now, yeah, it’s wartime. Do what you got to do. I think, to me, it’s about taking those concepts and seeing what we can do about them more regularly, or how we can think more regularly about having this pressure, so to speak, or this need for moving faster.

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Steli Efti: Before we wrap up the episode, what do you think? Well first let me ask you, because I can tell you right off the bat, I don’t always operate with the same intensity that I have in the last… It’s not just during this unprecedented time of the pandemic that I’ve acted with more intensity. I’ve done it many, many times, but I don’t do it throughout the year for the last 5 years, 10 years. I don’t always act. I do relax, and it’s not always for the better. Right? But I do have a range of how much intensity I have. How about you? Do you always act with the same level of intensity? And what do you think is, when you think about the best examples that you have, friends that you have that you think are really fucking good at this, what makes them always act that way, operate like it’s wartime? What drives them?

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Hiten Shah: The statement here is like having a sense of urgency. And I think when you’re running a business you need to have a sense of urgency. And so, I wish I knew how to do that consistently all the time. I really do. And I could do it in a balanced way where I’m not being abrasive or anything to the team. I would want to instill a sense of urgency. I wish I had the ability already to do that anytime and have a culture in a company where there is a sense of urgency, a strong sense of urgency. Not like a sense of urgency like, “Oh, we’re going to die.” But more of a sense of urgency of like, “We need to move fast, and we’re going to figure out how to do that.” And that is definitely where I’m at right now. It’s definitely where I have pushed the people I work with right now. I have not done it abrasively yet. I don’t plan on it because we are in a good spot in my businesses as far as I can tell. But that sense of urgency is really what I’m talking about. I don’t even care if it’s wartime or peacetime as their framework. I think it’s about having a sense of urgency. Probably another episode for us, to be honest.

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Steli Efti: Yeah. Kinds of urgency. There you go. That’s a good one. All right. Thanks, as always. And for everybody listening, if you have any-

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Hiten Shah: Yeah, thank you.

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Steli Efti: Any two cents, any feedback, we’re always happy to hear from you. And if you have not done it yet, do us a favor, go to iTunes, give us a quick review, give us five stars. I highly appreciate you. Stay safe and we’ll hear you very soon.

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Hiten Shah: See you.

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