Earlier this month, Ben Horowitz of Andreessen Horowitz brought up an interesting topic surrounding the hiring and firing of executives at startups. While talking with a pair of his friends – one a VC and the other a startup CEO – the CEO asked if he should get rid of an executive as the company grows larger because he lacks experience leading a larger company. As Horowitz explains in his post “The Scale Anticipation Fallacy,” he believes passing judgement based on how an executive might perform in the future is ludicrous.
His first point is simple enough: no one is born with the natural ability to manage a large company, so everyone needs to learn at some point. He also notes that it is impossible to predict how someone will perform in a hypothetical situation in the future, pointing to Bill Gates and Mark Zuckerberg as examples. Gates and Zuckerberg are the kinds of executives that are molded to fit in with their respective companies – a great CEO at one company is not automatically golden at another.
“The relevant question isn’t whether an executive can scale; it’s whether the executive can do the job at the current scale.”
– Ben Horowitz
As he continues with his bulleted list of why prejudging executives is a bad idea, Horowitz uncovers the argument I feel is most important when discussing “scalable” executives.
“If you make a judgment that someone is incapable of doing something such as running a larger organization, then will it make sense to teach them those skills or even point out the anticipated deficiencies? Probably not. You’ve already decided that they can’t do it,” he writes.
As noted earlier, he believes no one is born with the ability manage a large company, and assuming an executive will not scale with the company serves only to stint their potential and, as Horowitz puts it, “retard their development.” When forced to judge an executive’s abilities, focus on the present. The lesson? Don’t hire someone based on how you think they will do in the future; instead, fill the needs of the present and tackle the issues of the future as they come.
“The relevant question isn’t whether an executive can scale; it’s whether the executive can do the job at the current scale,” says Horowitz. “Asking yourself whether or not an executive is great can be extremely difficult to answer. A better question is: For this company at this exact point in time, does there exist an executive who I can hire who will be better?”
Certainly it’s important for startups to think about their futures when hiring executives, but I agree with Horowitz that it shouldn’t cloud their judgement too much. Firing someone based on how you believe they might perform in the future is just as dangerous as hiring someone you think might do the job well. In the case of the latter, an executive with the proper credentials to scale with a company might fail miserably at earlier, smaller stages.
Is it better the stay within the moment and go with the executives that will perform well in the present? Or should executives be judged based on how they may or may not perform in the future? Let us know your thoughts on the issue in the comments!
