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Larry Page, Google co-founder, listens as Google CEO Eric Schmidt (R) talks to reporters at the Sun Valley Inn in Sun Valley, Idaho July 9, 2009.REUTERS/Rick Wilking

When Larry Page took the helm at Google Inc. from Eric Schmidt recently, much of the news coverage focused on the gregarious old pro handing power to the now-seasoned, albeit somewhat introverted, co-founder of the company.

But venture capitalist Ben Horowitz, on his blog, says the distinction we need to be alert to is that Mr. Schmidt was Google's peacetime chief executive, while Mr. Page appears intent to be its wartime CEO.

And that distinction could apply as well to your own company's needs at the top:



Defining terms

Peacetime in business refers to periods when a company has a large advantage over the competition in its core market, and its market is growing, Mr. Horowitz says. The company can focus on expanding the market and reinforcing the company's strengths.

But in wartime, a company is fending off an imminent existential threat, be it from competition, market change, dramatic economic change, or some other factor. Former Intel CEO Andy Grove (who Mr. Horowitz calls "a great wartime CEO") summed up the approach in those situations with his book entitled Only the Paranoid Survive.

Defining leadership

Mr. Horowitz, who in 1999 co-founded Loudcloud, a managed services provider, says he was a peacetime CEO for about nine months and a wartime CEO for the next seven years. His greatest management discovery was that the two roles require radically different management styles. Yet he notes that most management books describe peacetime techniques rather than wartime realities.

Differences in strategy

A peacetime CEO knows that proper protocol leads to winning, while a wartime CEO violates protocol to win.

A peacetime CEO focuses on the big picture and empowers staff to make detailed decisions, while a wartime CEO cares about the tiniest matter if it interferes with the prime directive.

A peacetime CEO builds high-volume recruiting machines. A wartime CEO does that, but also builds a human resources department that can execute layoffs.

A peacetime CEO always has a contingency plan, while a wartime CEO knows that sometimes you have to gamble that in the clutch you will roll a hard six - an unlikely turnout with a high reward in the dice game craps.

A peacetime CEO spends time defining the culture, while a wartime CEO lets the war define the culture.

A peacetime CEO aims to expand the market, while a wartime CEO aims to win the market.

Differences in behaviour

A peacetime CEO does not raise his or her voice, while a wartime CEO rarely speaks in a normal tone.

A peacetime CEO works to minimize conflict, while a wartime CEO heightens the contradictions.

A peacetime CEO strives for broad-based buy-in. A wartime CEO is unconcerned about building consensus and does not tolerate disagreements.

Can a CEO be both?

Steve Jobs excelled as wartime CEO at Apple Inc., but left his post in the 1980s when the need was for a steady, peacetime leader, a role he seemed ill-suited to handle. Mr. Horowitz believes an individual can be successful in both peacetime and wartime. But that requires understanding the many rules of management handed down by scholars of peacetime CEOs, and knowing when to follow them and when to ignore them.

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