Concept
Hard decisions
Hard decisions, in Horowitz's account, are the choices only the founder can make, on incomplete information, that hurt someone whichever way they go: demoting a friend, laying people off, cutting a product. Making them is the job, and the loneliness of it is not a sign of doing it wrong.
Most of The Hard Thing About Hard Things is about decisions that have no good option: demoting a loyal executive who has stopped scaling, laying off people who did nothing wrong, telling a customer the product they bought is being discontinued. Horowitz's contribution is not a formula but a set of observations that make the decisions survivable. First, the information will never be complete, and waiting for it is itself a decision, often a costly one. Second, the people the decision affects should hear it from the person responsible; on layoffs, he insists that managers tell their own people rather than hand the task to someone else. Third, the priority order is fixed: take care of the people, the products and the profits, in that order, which means the decision is made with the people in mind even when it hurts some of them. And fourth, the loneliness is structural. No one else has the whole picture, so no one else can decide; that is what CEO means.
A real-life example
A founder in Eskişehir knew in March that her company could not carry its fourteen-person team through the summer. She waited two months for a contract that might change the numbers. In May, with the contract still unsigned, she laid off four people, telling each of them herself on the same morning, and explained the numbers to the ten who stayed. The waiting had cost the money she would have used for more generous severance.
How to use it
- 1Decide on the information you have, by a date you set, and treat waiting for certainty as the decision it actually is.
- 2Make the call yourself and explain it yourself, in person, to everyone it affects.
- 3Keep the order fixed: people, then products, then profits. A hard decision made in that order can be defended; one made in the reverse order cannot.