053: Cameron Herold - The Secrets to Having a Powerful COO

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All right, Today we're going to give you the secrets to having a powerful coo. How to get them, how to work with them, how to support them if you are a coo. How to get the help you need. If you feel like you don't get enough love as the coo, this show is for you.

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Welcome again to the Scaling Up Business podcast. I'm your host and Gazelle's business coach, Bill Gallagher. You'll notice my voice is thrashed today. It's just too much travel and too many days on the road. On the show with us today is is a good friend all around good guy, Cameron Herald. Cameron is so he's the author Double Double and he's the founder of the COO Alliance. He's an all around growth guru. He's grown a couple companies through $100 million. He spent more than 25 years in this world. He knows the world of the CEO. He also knows the world of the CEO and how the two should work together. His companies have become case studies in the Harvard Business School. He's a coach to royalty, to big shots, large CEOs large and small. So he knows the whole scale of it. He's been feature featured in the ap, Bloomberg, New York Times, Wall Street Journal, Fortune, TV shows like Oprah. He's an all around great guy. He's in Vancouver today but he lives full time in Scottsdale, Arizona. Welcome to the show, Cameron.

Hey Bill. Thank you. Appreciate it. Good to hear from you.

Yeah. So I was hoping my wife Lori be in by the studio today so she could say hi as well. I know you guys have hung out at various events and things around as well with your, your wife, Ted, women and, and some of the EO events and so on. So great to finally have you on.

The show Say hi to her. Yeah, we bumped into each other I guess a few months ago back at the big huge TED Woman event. It was pretty cool.

It was awesome. She came back raving about it and I wished I'd been there.

Yeah, it was a good one.

So you know, we get conversations. I, I probably talk a little more to CEOs than, than the rest, but you know, we coach leadership teams and along the way we hear a variety of things. We hear CEOs who are hungry how to find their second in command. They know they need an operational executor, hands on kind of person to counter their visionary idea monkey. And then we have others who are in the role and feel like the CEO gets all the attention, all the love, all the support groups and things like that. So I thought it was a great show as you've been a great topic for a show as you come on. So before we get into exactly what that is and all that, leave people hang in for a minute. Tell us a little bit about your background, how you got into this and how this has evolved.

Sure. I was groomed as an entrepreneur as a child. My father raised my brother and sister and I to all be entrepreneurial. In fact, all three of us today own our own companies and have been doing so for 15 to 20 years. All three of us. So it's all we ever really knew. Both my grandfathers were entrepreneurs, my dad was, and then I even married into a family of entrepreneurs where my wife is an entrepreneur, her dad is and so are her mom and dad. So it's all I've ever really known. So I think in that space you just kind of get to understand the entrepreneurial space. I had 12 full time employees when I was 21 years old. I had an operational company when I was in second year of university. So I was really running businesses from a very young age and got a lot of my real business training through a group called College Pro Painters. Opened the west coast of the United States up for them. They're a huge 9,000 person house painting company. And I was in the top 30 people of that organization when I was only 26 and then went on and co founded a chain of auto body collision repair shops. In Canada it was called Boyd Auto Body in Glass. In the US it became Gerber Auto Collision and then from there went on and was president of a private currency company. We built that up and sold it in January of 2000. It was almost a bit of a precursor to bitcoin. We had 30,000 companies using our currency including the Starwood hotel chain and Avis Rent a Car and Hard Rock Cafes. So we were doing some pretty cool stuff 17 years ago in that space. Then from there I went on and I was the chief operating officer of a brand called 1-800-GOT junk and I joined as the 14th employee. And when I left six and a half years later, we had 3100 employees system wide. And that was 10 years ago this week. In fact, I had dinner last night with the founder, Brian, and I had dinner together and laughed about the old days. And so 10 years ago, I left the company and started coaching and mentoring entrepreneurs and CEOs, typically companies in the five to $50 million space that want to go to 50 to 500 million. And I've done paid speaking events now in 26 countries on five continents and have mentored entrepreneurs and entrepreneurial companies all over the world. So that's what I do today. And then in addition to the book Double Double you mentioned, I've put two others out now as well. Another one called Meetings Suck, a third called the Miracle Morning for Entrepreneurs. And then I recently, a year ago, started a group called the COO alliance, which is the only network of its kind in the world. For second in commands. That's famous. There's a helicopter tour.

So tell us about the COO Alliance. How's it going? What did you set out to do there?

I really, I think I noticed at a very early age, back when I was an EO member, I was involved in the entrepreneurs organization from 95 until 2000 as a member. And then I joined Brian as his COO in 2000. And for the next six years I would go to all of these EO events. And I realized that I didn't really fit in anymore. I wasn't the owner, I wasn't the entrepreneur. And I would get into conversations with people and they'd be like, oh, you're not the entrepreneur? And they would turn and talk to somebody else. And I felt like saying, yeah, but I'm the guy running the company. I'm the guy building it. I'm kind of the second in command. But I knew I didn't fit. And there wasn't really a place for me. And there were associations for marketers and for engineers, for lawyers. There were all these trade groups, but there was really nowhere for the entrepreneur. And then over the years, I saw, you know, YPO and Vistage and Gazelles and Maverick and Genius Network and these umpteen different organizations that focused on the entrepreneur, but again, nowhere for the COO to go and learn and mastermind together. And then a few of the coaching clients that I had had 150, 200 employees and they had a second in command in place and they wanted to talk to some of the other guys that I was coaching. And so we pulled together a small group last May and pulled together a group the week following. And out of the 20 people that came to the first two groups, 17 signed up for an annual program. They wanted to build an annual alliance where we would meet four times a year in Scottsdale. And they select three of the four events to come to. And it just keeps scaling from there. So we're at about almost just under 40 founding members right now, and the goal is to get that to 80 this year.

Well, that's awesome. So what does it look like? What do you guys do? How do you support each other? What's the.

Yes. The way the model is set up is about 30% of the time the CEOs mastermind together and share information and ideas together, Share best practices. Very kind of forum like where they'll present a problem that they're having and the rest of the group will Gestalt protocol and share ideas with them.

So a forum group is a peer group, right? A peer group that gets together and talks about and shares experience. And Gestalt is. Gestalt is a way of speaking from experience rather than giving advice. So simply.

Yep. So I just take the best practices from all kinds of organizations and pull them together rather than trying to figure it out for myself. There's great practices and these programs have worked for years, so we're just borrowing them and pulling them into these other models. So they share their experiences with each other. It's not me standing and presenting, it's them sharing their experiences on how they're growing their companies, what they've learned, what's working, what's not working, and they take those best practices back into their company and then about another 30% of the time they break off into small groups of three or four and they brainstorm around ideas, just areas that we're talking about, and they come back in and present to the group. So it's more of a shared brain trust and a shared kind of not so much experience share, but almost a creative discussion. And then the group learns from what the group feels are best practices. We also do five 10 minute talks at every event where the members do very short presentations on something that they have deep experience in, whether it's a software platform they use or some leadership skill that they have. So it's an experience share with the group so that the group can learn. And then about 5% of the time is me riffing on certain topic areas or sharing some expertise that I may have. And we also have one guest speaker per event. You know, guest speakers who are just experts in communication, experts in personality profiling, typically things about how to deepen the relationship with the CEO and the coo.

It's really great. So are you draw what's, what's kind of the area that you're drawing people from? What sorts of people are these like that? What companies do they represent?

Yeah, they typically are the second in command for companies that already believe in investing in their own growth. You know, so they're members of ypo, they're members of Gazelles, they're members of organizations where the entrepreneur is learning and growing themselves. And they've seen the value of a mastermind, or they've seen the value of, you know, peer to peer learning, or they've seen the value of investing in their skill set. And they recognize that the entrepreneur doesn't necessarily have the skills to coach the second in command, so they want to put their second in command in the room with a group of others. That tends to be where it's coming from currently. And I'm just actually getting ready to start the marketing and sales side. So a lot of it has just come from my organic network.

Sure. The initial word of mouth. Yeah, really great. So. And from all across North America or.

Currently from three countries. We just actually held an event last week in Scottsdale where I had 15 CEOs come into town from five countries. So we're starting to get a little bit more reach. But I think for the next year the focus is definitely the United States and Canada. It's a little bit far for people to be traveling from different countries to come into Scottsdale three times a year. Sure.

But that's a flying. And that's not too bad in when you're in North America, right?

Yeah, exactly. Yeah.

And. And it seems like it's interesting. You've got to draw people of a like mind with similar interests.

Right.

And then, and then you've got to create the right environment and given the right experience to draw out all of that stuff. So. Yeah.

And the businesses that are involved are again typically around 5 million is around the minimum size, but we have some as large as 300, 400 million.

Yeah.

Typically it's around 50 to 60 employees, but we've got some that are 3,000. So they tend to be we've got a few that are VC funded, but the idea is that they want to learn from each other, they have something to contribute to the group and that they want to learn from the group as well. I think that's been key as well as it's not just coming to learn. They also feel like they have something good to share.

Right, right. So they're fully engaged, participating, not just absorbing. Right. It's not going to listen to TED talks. It's a particip. Well, it's interesting, I think, that you point out that hunger to learn and engage is a different. It's a qualitative kind of thing, but it's different than just saying, well, there are companies with this growth rate and this number of employees. It seems like there's a few. I mean, I notice a lot of times after companies go through 50 or 60 employees, it's one of the first times they think, oh, maybe I should get a coach. And the revenue sometimes has less to do with it. It might make it a little easier to decide. But there's a point where things become more complex And I think 50 or 60 employees, they also start to think about maybe I should have a second in command through 30 or so on. They're often sort of scrapping and dealing with themselves.

Yeah, exactly.

Yeah, through the phase. But the problems are different. Right? 200 employees, 100 employees, 1,000 employees. They're all really different. They feel really different. Different kinds of environments. And yet there's some common things like people being siloed people. It's remarkable how quickly that can start. Right?

Yeah, there are definitely some commonalities, but we're seeing right now we're starting a platinum program of the CEO alliance next year, which will be like a level that you qualify into based on your employee count. Because there's just some complexities that start to come up where you're dealing with politics and matrix decision making. You're dealing with Sarbanes, Oxley or public companies, or you're dealing with major VC money. So it's just differences that can start to happen at that stage that are different from a 50 or 60 person company. And some of the people that are members of the COO alliance carry the GM title or the VP of Operations title, but they're truly the second in command. They don't necessarily have to have the COO title, most of them do, but it's truly just the second in command of the company.

So let's attack this from two angles. The COO and the CEOs thing. So what are the big concerns of the COO? What's the concern? Whether you carry that title or not, what is the big concern of the operationally minded second in command?

It's usually trying to help grow the entrepreneur's company and give the entrepreneur the rope to be able to run and do their thing and be the visionary, but also to help save them from themselves. How did they take all the great ideas the entrepreneur has and put them in place in some kind of a structured, planned method versus the typical sporadic method that might happen when they're a smaller company? So it's trying to save them from themselves, trying to give them the room to grow, and also trying to keep building that trusted relationship so the CEO knows they have a very key executive who they can come to with everything. Often the CEO doesn't really have a safe place to go. Maybe forum is the one area they might have if they're a part of an organization that has that. But often the entrepreneur feels very, very left out of the ability to tell their board what's really going on or the ability to tell their key employees. So they're always trying to build that very trusted relationship with them as well.

And is there something that you would want every COO to know that they don't already know?

Yeah, I think one of them is that every day everyone wakes up trying to figure all this out. Every day we're all doing the biggest thing we've ever done in our lives, and it's okay for them to realize that as well, is that they're never going to be perfect. They're never going to be. They're never going to know it all. So what they have to keep doing is just working on their skills. And it's okay for them to be a little bit vulnerable as well. And that's kind of something they can bring back to the leadership team, too.

Yeah, Well, a lot of CEOs I know don't specialize in vulnerability. They tend to be more even tempered, you know, less emotional than. Than some of us who are on the other side of it.

I'll tell you something I've noticed with a lot of entrepreneurs who want to hire a second in command is they're often doing it in the wrong order. What they tend to miss on is very. An awful lot of them, maybe 40 to 70%, don't yet have an executive assistant. And I really urge them that before they hire a COO, hire an executive assistant first, you know, get a $55,000 very seasoned second or executive assistant who can take a lot of the stuff off your plate. That frees up a lot of your time and a lot of your bandwidth to actually become strategic and work in your unique ability again. It might also buy you another year of not having to pay the $300, you know, $300,000 salary. I also see that people will tend to over title and they'll tend to give someone the COO title when really a VP Operations or a Director of Operations or a General Manager title would suffice. And if you give them a lower title, you tend to not have to pay the bigger salaries to them as well.

Yeah, so good title creep also sometimes gets into people's sort of self. Self awareness, self image, and then they, they find themselves unwilling to do certain jobs.

Well, I'm like, it's beneath them. And the reality they were given a title that was way too big.

Dude, there's a hundred people here.

I came in. It's funny, I joke with Brian about this a while ago that When I joined 1-800-GET junk, there were 14 employees at the head office. Actually there were 13. I was the 14th. But there were six vice presidents, the CEO and six people that worked in the call center. Like five of the vice presidents didn't even have any direct reports yet. So I mean, he just gave people all these big titles, but then all of a sudden they all wanted big salaries. And the reality was here I was coming in as a COO and I had a banker's box sitting on the floor with my file folders in it. We over titled everybody.

Yes, I think some companies do a good job of managing sort of internal, external titles, but that gets a little more challenging. And of course titles don't translate internationally as well, where managing director means something. And in another country in the United States, it's meaningless, right?

Yeah, it's a lot more senior in Europe than it is over in North America, for sure.

Yeah. So what? So how does the CEO go about hiring and working with the coo?

Well, one way is to realize that it's very similar to a marriage, that you need to have the, you know, the date night. So you need to have time in your calendar once a week to give the COO time to ask questions, get aligned, brief you on what's happening. And often the CEO will be like, oh, I don't need that. Well, guess what? The COO will. So you need to slow down and put the time in your calendar to make sure that they have that one hour block. And you schedule everything else around that that's key, secondly, is that you really need to define very clearly roles and responsibilities in the org chart with the company so that people know the clear reporting structure.

Yes.

Third, that you realize that there's different types of COOs. Harvard actually HBAR wrote an article years ago that misunderstood role of the coo. And they defined seven distinct types of chief operating officers. So you have to understand which you know which COO you really have. Are they outward facing or are they inward facing? Are they process and engineering focus? Are they sales and marketing focused? Are they operational? Are they finance and it like what kind of COO do you have? And then I like the entrepreneur or the CEO to give up all of the roles except their unique ability to really hire someone who's great at the stuff that they're weak in. So you truly have that yin and yang relationship being built.

Right. And that takes a certain amount of self awareness. I mean, you know, there's a lot of delusion, especially as you're younger and earlier in your career and then as you start to get older. You know, I'm famous for announcing to audiences all the time, look, I'm a terrible operator. And the moment I realized that things started to get better for me, unfortunately it wasn't until after I was a CEO. But that realization, like, no, I don't like the operations, I like the startup, I like the turnaround, I like the launch, I like a lot of things. But anything routine is horrifying to me. So knowing yourself and then being able to give it up is a good thing. But I think you pointed to something else as well. You talked about getting an assistant first and having a great executive assistant. Of course, one of our friends launched the Executive Assistance association, or eao. Eao, right. And that's a great thing if you're an executive assistant out there listening or you have one and you'd like to treat them well, get them in that so they can get the support there. So I think one of the things I see there is trusting the person. That's probably the same thing with the coo. This is the first time I'm working with a second in command. Trusting them, giving them access to things, really confiding in them, developing that deep relationship, getting the date night, getting the thing, getting that harmonious, high trusting, highly healthy, productive relationship is probably really key. And people hire their first executive assistant and they're like, oh, can I give them access to my email? What if they put things on my calendar? And what about my financial information?

Well, my first EA Years ago, I mishired. I didn't hire someone who actually could take a lot of that off my plate. And now I've actually pretty much gone carte blanche where I've hired an ea. But I did the homework, I made sure, I did the reference checks. I really understood. And I had to have someone who is so completely trustworthy that I could give her access to everything. So she has access. I've got 86 different accounts and she has access to 100% of them.

Really great. Really great.

Yeah, but that's. But how can you not?

Right?

And that's what you really need to do with a COO as well, is you truly need to have that very, very trusting relationship with the person so that you can help each other grow.

Right. So when I'm hiring and designing a role like that or working with a company to design such a role, I think about who am I and what am I going to be good at and what is my eventual role in the company. And sometimes it's really useful for people to think about maybe they don't even want to be the CEO at some point, or CEO at some point. Maybe they just want to be head of R and D and they want to be the founder and have both roles given away at some future point. And those point to different decisions then about the type of COO that you're going to hire, right?

Yeah, it does. And I think that is the kind of self awareness that you talked about. Right. They really have to sit down and look at what do they love to do, what are they good at, what do they suck at, what drains them from energy, what gives them energy, and really again, trying to find that strong complement.

Right. So what's the biggest mistake CEOs make?

Probably micromanaging and getting involved or over involved around where, you know, letting them do their job, working to, to maybe keep injecting too many of the new ideas into the company instead of putting them into a system to allow the CO to operationalize things. You know, trying to run the company like they did when they had 40 employees, when it now has 200. Right.

So now you use what you call the vivid vision and your old partner calls the painted picture. Right. We've had Brian on to talk about his, his process, but they're really very similar approaches, right. To imagining a future and giving it a great deal of detail and then sharing that widely with the company. Tell us a little bit about that.

Yeah. In 1998, so two years before I joined Brian, we went to a lunch Together. And we were exposed to the idea from a sports psychologist who talked about visualizing your future. And we came up with the idea of doing it. So I did it for the auto body chain. Brian did it for 1,800, got junk. At the time, it was the rubbish boys. And then another guy in our forum did it for his business as well. And we all kind of rolled it out and saw how it worked. And the idea is, if you can lean out into the future and visualize your company in its finished state three years from now and describe every aspect of what you see. You describe every operational area, every area of the org chart in its finished state, maybe four or five bullet points per area. You describe what your customers are saying about you, what your employees are saying about you, what the media is writing about you. And you again, describe as if you're standing in the future, what it looks and feels like without thinking about how it happens. When you get that four or five page written document and you get a professional writer to make it pop off the page, that's what starts to really align all of your employees, shareholders, customers and suppliers. It really starts to show people why they're doing what they're doing and how their work is actually fulfilling and fits into that picture. And then you can reverse engineer it. Every sentence is a finished state that you can come up with one or two projects to make come true.

Yeah. And do you have a favorite time horizon that you like to do this for?

It's only for three years. Only three last three years. It's too far out there. People can't wrap their head around it. If you only go one year out, it's not inspiring enough. Three years tends to be enough of a friction point that it's a good, good pull, but it's not too far out.

So if you're only familiar with the Rock Habits scaling up framework at this point, you'll think of these things as our strategic thrusts and our chess moves. If you've been working with a coach and they're very related. But in this inst, we're creating a really visual, evocative picture of the thing. So we take those data points that we'll do in that kind of work and then make them much richer, make them pop off the page, make them fill people's imagination. And it seems to me that if you haven't hired that person or haven't developed that role yet, that this is a great way to imagine the future state of the business to get you ready for it. Because grooming Your company to get ready for the addition of the second in command or giving that person the environment to come on board successfully. Makes a lot of sense.

Yeah, yeah, exactly right. And I think that's what. What we noticed, you know, again, building 1, 800, got drunk together. And since then, when I've been coaching entrepreneurs all over the world, what tends to be missing is that really clear vision that the entrepreneur often has in their mind. But nobody else can read your mind. And if you can get it out in a way that they can then literally read it in four or five pages, then they can build out the plans, they can put in the rocks, they can figure out how to reverse engineer that. Yeah.

Now, what about visuals? Do you like visuals?

A different tool. Sure. You can use a vision board, but again, a picture says a thousand words. So if I was the entrepreneur and I did a vision board and showed that to everybody, they might not see the same thing I'm seeing in the picture. You know, I can show you a picture of a dining room table set with all kinds of cool stuff on the table, but all I'm really looking at is the champagne glasses. What you're looking at is the food. So you have to be very careful with trying to get everyone to see what you see with visuals. But what I like to do is have everyone create their own vision board for what they see that inspires them around the vivid vision itself.

We did that some years ago in my last business, and we talked about the future. We created a manifesto statement that included our BHAG purpose values. And we often do that kind of thing. So purpose values, BHAG brand promises. And then we asked each person to imagine their part of that future and to create a vision board for it. And everybody had a really different sort of look at what they emphasized. Some people imagine really beautiful offices, and some people imagined bigger offices, and some people imagined different distribution, a changed sandbox, things like that.

Right. Well, that's the key, is that if they can start seeing what they see and how it fits into what you see, then everyone's completely aligned. Yeah, I love that.

The other interesting thing that I've noticed, and I don't know how often you notice this, is that sometimes when you start to create this vision, some people choose off the team. And that can be distressing at first. Right. But it seems actually useful because if people aren't aligned with you, if they leave in a graceful way without having to get fired or just disappearing, then that's a healthier and less painful, less litigious way to go, right?

Oh, totally. Years ago, I was coaching the former president of the Vancouver EO chapter as a client, and we ran a session for all of his employees. We took his 80 employees off site for the day, and Dean stood up and read out his vivid vision. And he said, you know, 15% of you hate what you just heard. And he said, that's okay. It's probably the right time for you to quit because the 85% of you that love that are vibrating in your seats, and you're excited. Six weeks later, about 15% of his employees had quit. And the following year, he ranked as the number two company in all of British Columbia to work for. The other client of mine, Nurse next door, was ranked number one. So this whole concept works. And you have to be okay with some people leaving. It's so much better that everybody who stays is really aligned than having a few of the cultural cancers hanging out and trying to align them over time.

Yes. Okay. To alienate a few people that are off your. That are off your target. Right. Somebody famously wrote to the CEO of Southwest at one point and chastised him for or complained about the irreverent way that they were doing the safety briefings. And of course, he knew his brand and what he was all about. And he wrote back simply, we will miss you.

Yeah, it's like, I'm not going to stop telling jokes.

That's my brand, baby.

And I think you have to actually be okay with pushing some customers and suppliers away as well. We're not trying to be a kumbaya group hug, but we're just trying to get everyone on the same page. And if you don't like the page, that's okay, but it's where we're going, right?

Absolutely. So what are the particulars, the COO alliance? I'll give the link out in just a second, but tell us a little bit about it.

Well, all the main information is@the cooalliance.com Great. Again, we have four events this year that they select three of the four to go to. In 2018, there's five events. They select three of the five. So each year we'll add an event and they select three to go to is 20,000 per year per member. They also have a group online call every month where I do a Q and A call with all the members. So they get an online Q and A. And then we also have a closed private Facebook group where they share information and resources throughout the year as well.

So we've got a social platform. We've got a open call and we've got a handful of events and that's terrific and sounds like actually a pretty good value.

So yeah, scaled up quite nicely.

So cooalliance.com we'll put that of course in the show notes as well and I think it's been really helpful. Valuable. Thanks so much for briefing us on it. I want to tell people to get shows like this every week. Just go to scalingupbusiness.com and subscribe and we'll send you our weekly podcast as well as the tips and tools and worksheets and checklists and things like that that we use to help scale up companies. And once again it's been a pleasure. Thanks so much for being on the show.

Hey Bill, thanks for having me. Had fun. Say hi to Lori as well.

Thanks.

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