A while back, Ben Horowitz wrote a great post on the concept of peacetime CEOs and wartime CEOs. I recommend reading it in case you haven’t read it.

We understand that companies in wartime require a military kind of approach to execution - we also admire leaders who are able to successfully lead companies in these times.

Ben has been a good wartime leader, and it is implicit in the post that he thinks it is harder to be a wartime CEO than to be a peacetime CEO. Probably that is the case. Or perhaps, we are wired to glorify war. Look at history books, and you will find that the majority of time is spent discussing wars, jumping from one winning ruler to another.

Politically, peace is a very modern phenomenon. My hypothesis is that as human beings, we don’t intuitively understand peacetime, especially when it comes to the core of capitalism - companies.1

We don’t know how to manage companies in peacetime.2 We either look for war opportunities, artificially create war like situations, or fail to utilise peacetime to create an edge, eventually fighting to survive. No wonder, you see many great companies vanish, die a slow death, or become irrelevant because of their inability to manage peacetime effectively.

Need examples? Yahoo!, Nokia, Blackberry, MySpace, Motorola, Pan Am, AOL, Path, Digg, JetAirways, Apple of 91-97.

I believe we need to develop more appreciation for peacetime and great peacetime leaders.

Peacetime leaders, of course, have time and the liberty to make a few mistakes. However, managing a company in its peacetime, to continue driving growth at incredible pace and building a lasting company, requires an approach that is easier said than done.

  • Peacetime leaders need to have a long-term hypothesis about their business. They can’t afford to be reactive.
  • They need to make moves and take bets which might (or might not) pay off after years of investments. Their ‘experiment-feedback-learn’ cycles are often long and harder to manage.
  • They need to be willing to cannibalize business lines or short-term business for the longer term gain.
  • Leading and rallying people in peacetime is hard. Peacetime leaders need to build empowered teams that have the freedom to fail and learn. They need to listen and observe their team to drive innovation.
  • Like modern countries, they need to ensure that they create enough defence to discourage competitors from attacking them.

Personally for me, Satya Nadella is the best example of a peacetime CEO. A few would argue that he became the CEO when Microsoft was fighting for relevance and he is actually a wartime CEO. In my opinion, both Microsoft and Satya were self-aware of the challenges and they just proactively tackled them.

  • He improved the internal culture of a 40+ year old organization that was getting bureaucratic and too competitive. It is an extremely hard, almost impossible thing to do.3
  • He recognized, to innovate they need to do things which they haven’t done before - heavy investments in open source. Microsoft joined Linux Foundation as a high-paying Platinum Member and through VS Code, Typescript, Xamarin and Github, Microsoft has transformed its image when it comes to open source.
  • Microsoft made a few big and smart acquisitions (Linkedin, Github) and took > $7 billion writedown on Nokia.
  • He changed strategy to focus more on recurring revenue with Azure and Office 365 Cloud.

And result, Microsoft’s valuation under him has increased from $300 billion to $1.6 trillion, i.e more than 5x in 6 years.

To contrast, let me give an example of Yahoo!, mostly because I was at Yahoo! at the peak of their peacetime (2005-2007) and in retrospect, I can see the mistakes it made.

  • Wars of the past decade (Internet race and dot-com crash) had made it very short-sighted. It looked for short term results. As an example, it spent a lot of time building systems to effectively count the number of display ads shown instead of focusing on performance based advertising.4
  • It failed to innovate. A few innovative Web 2.0 companies it acquired (Flickr, Delicious) were not properly utilised.5
  • Yahoo!’s strategy was to become a media company. I think nothing was wrong with that. However given the CEO’s background (Terry Semel, who came from Warner Bros.) strategy was fuzzy and not appropriate for a tech-driven Internet company.
  • Obsession with Google - Google featured in almost all the all-hands meetings I attended (from India). There was always a strategy to deal with Google’s emergence.

Leading a company in wartime is definitely hard - it requires willingness to take hard calls, ability to handle high-stress and great reflexes to respond to every new battle that comes up.

However, in my opinion, it is harder to successfully lead a company in peacetime - to have empathy; to have an open mind; to have an intuition about the future; to handle ambiguity; to be patient with the bets; to know that world by default won’t remember them; to resist the urge to maintain status quo and build the company that continues to win and lasts.

Thanks Shikhi Shrivastava and Pathik Shah for their feedback on the drafts.


  1. Academia probably understands it the best, however at the moment, even most of the academicians and researchers have no other option but to operate in war mode given their funding obligations. 

  2. For that matter, we don’t necessarily always know if a company is in peacetime or wartime. And incorrect identification impacts companies more often than one would imagine - for example - a lot of startups get into peace mode when they should still be in war mode, on the other hand, a few startups continue to operate in war mode - getting kicks by creating more battlefields than they can sustain. 

  3. Microsoft’s organizational was illustrated by cartoonist and Googler, Manu Cornet in his book Goomics as follows Microsoft Organization Structure by Manu Cornet 

  4. Trivia - pay-per-click model was in fact invented by Overture, which was acquired by Yahoo! in 2003. In 2004, Google and Yahoo! made a patent settlement in which Yahoo! was given ~$300 million worth of Google shares. At that time, Yahoo! also owned approx ~$600 million worth of Google stock because of their prior investment of $10 million in the year 2000. Read more 

  5. To be fair, Yahoo! did try - it sponsored and spent time and money in building Hadoop which in a lot of way started Big Data revolution, it also built Yahoo! Pipes which let users create API mashups with a GUI. Tim O’Reilly called it as a milestone in the history of the Internet, however it never reached its potential