Mitigating the Product CEO Paradox

One of my favorite Ben Horowitz blog posts is “Why Founders Fail: the Product CEO Paradox”. He makes the point that many founding CEOs who are intimately involved with every product detail ultimately reach a point where they’re challenged to handle their CEO duties and manage every tiny product decision. The CEO becomes a bottleneck, product execution degrades, employees are unhappy … it’s a mess.

He goes on to say that the CEO’s typical response is to overreact: step completely out of product and turn over all decision making to the team. That action does not solve the problem; it makes things worse. As Ben writes about a CEO friend who faced this situation: “And then he ran smack into the Product CEO Paradox: The only thing that will wreck a company faster than the product CEO highly engaged in the product is the product CEO disengaging from the product.”

Ben’s advice to avoid the paradox is for the CEO not to overreact and to maintain “essential involvement” in a few areas of the product: 1) keep and drive the product vision, 2) maintain the quality standard, 3) be the integrator, 4) make people consider data they don’t have.

For early stage startups, the Product CEO Paradox begs the question: What does the founding CEO do if there is no one to hand over the day-to-day reins of running product?

Hiring the right person?—?let’s call him the “Product Leader”?—?can be a difficult transition because the CEO is bringing someone aboard who is going to replace the CEO in executing daily product activities. This transition can be emotional for the CEO. It is delicate?—?company make-or-break type proposition?—?and must be artfully executed.

The CEO may be inclined to hire a more junior (Director level) or senior (VP level) product person, but most of the successful Product-oriented CEO’s I’ve worked with will bring aboard someone who will work well to implement the CEO’s product vision and involve the product team and company (engineers, designers, sales, execs and other stakeholders) in building product. Josh Elman offers a terrific definition of the Product Leader the CEO should recruit to the team.

In this effort, the Product-oriented CEO will ask herself a few questions:

— What skills and experience does our existing product team possess and what do we need in a Product Leader to build great products?

A strong Product-oriented CEO will draw upon her direct work experience and others’ opinions to assess her current team’s skills and capabilities. She’ll also think about what a high-performing product team looks like. She should think about the characteristics of the all-star team across a few dimensions: vision, execution, communication, metrics, process management and business acumen. To build this picture, she’ll consult fellow CEOs, talk with industry colleagues and read best-practice opinions (e.g, Marty Kagan’s recent post on good product teams). Finally, the CEO will figure out what skills and experience will be needed a few years down the road to manage a larger product team, a broader product line and more complex dynamics.

From here, a Product-oriented CEO can craft a very specific profile in the form of a position description covering the characteristics, experiences, skills and habits of the Product Leader. The document will include objectives, responsibilities and activities the Product Leader will be expected to fulfill. She should not create the spec in a vacuum. She should get input and iterate on the document with key exec staff. Once she’s got the blueprint, she’s ready to find the right Product Leader.

— As CEO, what role should I have in product decisions after the Product Leader is aboard?

A great starting point to answer this question is to revisit Ben’s advice of “essential involvement.” A Product-oriented CEO will continue to set the product vision since that is part and parcel to charting the company’s course and sustaining company culture. The CEO cannot step away from defining product vision, so it’s important to communicate that expectation clearly to the incoming Product Leader, the product team and all employees.

She’ll also be the standard bearer on making quality product decisions?—?not necessarily being the arbitrator or having the final say on product direction but to ensure that the decisions are vigorously discussed, tested and evaluated. The CEO will ask tough questions, challenge assumptions and ponder alternatives with the team. As the company grows and communications become more decentralized, the CEO can be the integrating factor across teams, even if specific product decision-making is handled by the Product Leader and his team. The CEO can gather and process information across functional teams, with customers and partners, and within the industry (press, analysts, and influencers) who can help the product team with decision making.

This set of responsibilities for the CEO may not be right for every situation. Regardless, the CEO will have a clear picture of how she wants to be involved in the product. The CEO and incoming Product Leader should discuss in detail and agree on how the CEO will be involved to support the Product Leader and team. These expectations should be clearly communicated to the product team and all employees. Ultimately, employees will take their cue based upon how the CEO conducts herself when it comes to product decisions.

— What do I need to do to ensure that the Product Leader will succeed?

The CEO must first build absolute trust with the incoming Product Leader. Actually, the CEO should have already started to form that trust during the interview and recruitment process. A lack of trust equates to producing a poor product, where second-guessing and lack of clarity will overwhelm product execution. That trust may take a few weeks to solidify, but the CEO needs to reinforce the trust in her every interaction, communication and decision within the company. The trust is fermented when the CEO and Product Leader can have healthy debates and disagreements about the product and leave the room with a clear direction and roles well-intact. Nail down the trust and good product decision making and execution follows, even in difficult situations.

Next, the CEO needs to communicate to her employees that the Product Leader is running product.She needs to excuse herself from the daily activity of making product decisions. She needs to redirect employees who come to her with product issues. The CEO needs to change up her routines in a way that sends a mega-horn loud message to the company that the new Product Leader is in charge.

Reid Hoffman described how bringing in Jeff Weiner as CEO was like performing a brain transplant at LinkedIn. The company needed a complete rewiring of connections. Reid took an extreme, but necessary, step to book a lot of travel and get out of the office so that the new connections to Jeff could become “hard wired.” A startup CEO may not be able to leave the building, but she can get out of the kitchen so the new Product Leader can cook.

Lastly, the CEO should become a personal advisor and sounding board to the Product Leader. A good Product Leader will immerse himself in the product and will work with the team to establish norms and expectations for executing the product. The Product Leader will also be building relationships and credibility. Taking a “what’s on your mind?” or “how can I help?” approach with periodic catch-up meetings can facilitate some of those ramp-up activities. If done right, the CEO can offer advice in a way that is not perceived as undermining or getting in the middle of product execution.

Almost all companies face the Product CEO Paradox at some point when they decide to bring aboard a Product Leader. Executed correctly, this transition can be done with minimal friction to product execution, enabling the CEO, Product Leader and product team to continue to build awesome products.

Thanks to Will Aldrich, Andy Chen, Frank Chen, Josh Elman, Aaron Forth, Greg Schott and Gary Swart for commenting on earlier versions of this post.

This post first appeared at https://medium.com/@edzschau