Peacetime CEO vs. Wartime CEO
Peacetime in business means those times when a company has a large advantage over the competition in its core market, and its market is growing. In times of peace, the company can focus on expanding the market and reinforcing the company’s strengths.
In wartime, a company is fending off an imminent existential threat. Such a threat can come from a wide range of sources, including competition, dramatic macroeconomic change, market change, supply chain change, and so forth. The great wartime CEO Andy grove marvelously describes the forces that can take a company from peacetime to wartime in his book Only the Paranoid Survive.
Peacetime and wartime require radically different management styles. Interestingly, most management books describe peacetime CEO techniques and very few describe wartime. For example, a basic principle in most management books is that you should never embarrass an employee in a public setting. On the other hand, in a room filled with people, Andy Grove once said to an employee who entered the meeting late, “All I have in this world is time, and you are wasting my time.” Why such different approaches to management?
In peacetime, leaders must maximize and broaden the current opportunity. As a result, peacetime leaders employ techniques to encourage broad-based creativity and contribution across a diverse set of possible objectives. In wartime, by contrast, the company typically has a single bullet in the chamber and must, at all costs, hit the target. The company’s survival in wartime depends upon strict adherence and alignment to the mission.
When Steve Jobs returned to Apple, the company was weeks away from bankruptcy—a classic wartime scenario. He needed everyone to move with precision and follow his exact plan; there was no room for individual creativity outside the core mission. In stark contrast, as Google achieved dominance in the search market, Google’s management fostered peacetime innovation by enabling and even requiring every employee to spend 20% of their time on their own new projects.
Peacetime and wartime management techniques can both be highly effective when employed in the right situations, but they are very different. The peacetime CEO does not resemble the wartime CEO.
- Peacetime CEO knows that proper protocols leads to winning. Wartime CEO violates protocol in order to win.
- Peacetime CEO focuses on the big picture and empowers her people to make detailed decisions. Wartime CEO cares about a speck of dust on a gnat’s ass if it interferes with the prime directive.
- Peacetime CEO builds scalable, high-volume recruiting machines. Wartime CEO does that, but also builds HR organizations that an execute layoffs.
- Peacetime CEO spends time defining the culture. Wartime CEO lets the war define the culture.
- Peacetime CEO always has a contingency plan. Wartime CEO knows that sometimes you gotta roll a hard six.
- Peacetime CEO knows what to do with a big advantage. Wartime CEO is paranoid.
- Peacetime CEO strives not to use profanity. Wartime CEO sometimes uses profanity purposefully.
- Peacetime CEO thinks of the competition as other ships in a big ocean that may never engage. Wartime CEO thinks the competition is sneaking into her house and trying to kidnap her children.
- Peacetime CEO aims to expand the market. Wartime CEO aims to win the market.
- Peacetime CEO strives to tolerate deviations form the plan when coupled with effort and creativity. Wartime CEO is completely intolerant.
- Peacetime CEO does not raise her voice. Wartime CEO rarely speaks in a normal tone.
- Peacetime CEO works to minimize conflict. Wartime CEO heightens the contradictions.
- Peacetime CEO strives for broad-based buy-in. Wartime CEO neither indulges consensus building nor tolerates disagreements.
- Peacetime CEO sets big, hairy, audacious goals. Wartime CEO is too busy fighting the enemy to read management books written by consultants who have never managed a fruit stand.
- Peacetime CEO trains her employees to ensure satisfaction and career development. Wartime CEO trains her employees so they don’t get their asses shot off in the battle.
- Peacetime CEO has rules like “We’re going to exit all businesses where we’re not number one or two.” Wartime CEO often has no businesses that are number one or two and therefore does not have the luxury of following that rule.
Can a CEO build the skill sets to lead in both peacetime and wartime? Ben Horowitz believes that the answer is yes, but it’s hard. Mastering both wartime and peacetime skills means understanding the many rules of management and knowing when to follow them and when to violate them.
Be aware that management books tend to be written by management consultants who study successful companies during their times of peace. As a result, the resulting books describe the methods of peacetime CEOs. Other than the books written by Andy Grove, there aren’t many management books that teach you how to manage in wartime like Steve Jobs or Andy Grove.