This article is an excerpt from the Shortform book guide to "The Hard Thing About Hard Things" by Ben Horowitz. Shortform has the world's best summaries and analyses of books you should be reading.
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What are the two kinds of managers? Which kind is better suited to be an executive or CEO?
There are two kinds of managers: ones are strategic decision makers and twos are process runners. Most founding CEOs happen to be ones, however, the ideal leader has elements of both.
Keep reading to learn more about the two kinds of managers.
Manager Types: Ones and Twos
There are two kinds of managers:
- “Ones” are strategic decision makers. They enjoy spending time reading and thinking, when they collect information about their employees, customers, and market, then come up with new strategic ideas. They’re comfortable making complex decisions on incomplete information. They tend to be flexible in changing goals.
- “Twos” are process runners. They enjoy having clear goals and optimizing processes around these goals. Twos like progress and motion over sitting down and thinking. They get more anxious about big decisions than Ones do. They tend to be more rigid in keeping goals.
Which type is best for a CEO? Ideally, she has elements of both. A One CEO without any Two capabilities will create a chaotic company. A Two CEO without any One capabilities will slow down decision making. However, in practice, Horowitz says that most founding CEOs are Ones.
Which type is best for executives? Ideally, they’re a hybrid of both—they’re Ones when running their own teams, but Twos at the executive team level. For example, a head of marketing would take direction on the overall company direction and how marketing fits into it, then make strategic decisions for marketing within those constraints. These are “Functional Ones.”
The best model for an executive team is a One CEO surrounded by Twos/Functional Ones. This allows for fast decision making and clear goal setting at the top, which is then carried into execution by the company divisions. In contrast, having One executives report to a One CEO can cause friction when the One executives make conflicting decisions.
This ideal model has a weakness—it makes CEO succession difficult. You have a few choices, all of which carry risks:
- Promote a Two executive to the CEO role: This leaves the company in charge of a process-oriented Two, which can slow down decision making and strategic flexibility. (Microsoft did this when replacing Bill Gates with Steve Ballmer.)
- Promote a One from a lower level: This is riskier than promoting a top-level executive, since the person is often younger and less experienced. Expect turnover from executives who will feel rejected; this can be crippling for a small company. (GE did this when promoting Jack Welch in 1981.)
- Hire a CEO from outside: Compared to promoting a CEO internally, this risks bringing in someone who has far less internal knowledge about the company and culture. The book Good to Great suggests that internally promoted CEOs do better than external hired CEOs for this reason.
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Here's what you'll find in our full The Hard Thing About Hard Things summary :
- What it was like to head a company through the dotcom bubble and subsequent burst
- Why failing is normal
- How to build a good place to work
