How to Hire and Integrate a Strong COO

The CEO needs to be the iconic beacon. Right. The chief energizing officer. And we need to be able to come in with that good, positive energy for people to follow. And the COO's job is to be behind the scenes making all the tough decisions and shining the spotlight on the CEO to make them look good. The CEO internally needs to shine the spotlight on the COO to say, hey, you know, Cameron needs to make the tough decisions. I need somebody to be doing the tough stuff. Cameron has to be the hard ass because it frees me up to just be able to think and be, you know, good culture. So you're both shining the spotlight on each other.

Cameron. Or like I have. I know that, Cameron, you would probably say the same thing. One of the just absolute blessings to your life. You get to meet amazing people. Tell me about some of the benefits you've got from doing your podcast over the years.

Yeah, well, there's that for sure. I mean, I've now interviewed 245 COOs of companies, which are. They're often very behind the scenes and getting to know them. Second part is I tend to show up as the student on every podcast. I end up learning from every podcast I'm on. And then third, and I really didn't anticipate this as much was almost every new member of the COO alliance is telling us. What influenced them to join was they became listeners of the Second In Command podcast. So that's been really good too, because it's driving the core business.

Yeah, it's an amazing way for you to be in people's ears and for them to consume you, hear how you think, kind of get some of your ideas. So let's talk about the new book. This is your sixth book, so you're up to a half dozen. Excellent, Excellent. It just came out a couple of days ago as we record this. So you've done all these other books before. In some ways, it kind of feels like this is your life's work. All those other books are amazingly amazing. They're acclaimed. People cite them. I've been in so many different meetings where people talk about those different books, but this is like the book you were meant to write.

Yeah, it's. It's funny because. And you're right, my first book, Double Double, I wrote because a couple of speakers bureaus said that if I had a book, I could raise my speaking fees. And I wanted to show the world that I was not just the 1-800-got junk story that I, you know, I. I also built three businesses before that, I had two EO qualifying companies before joining Brian at 1-800-got junk. But I wanted to show a lot of my ideas and that's what, what Double Double was for. Then three of my other books, Meeting Stock, Vivid Vision and Free PR were chapters of Double Double that I just didn't give them enough. And I, and I really wanted to really blow open those, those content areas. And then the miracle morning for entrepreneurs was just opportunistic. I was at a Mastermind event called the Genius Network, walking through the hallway and Hal Elrod grabbed me and said, hey, do you want to co author a book with me? And I went, yeah, you've got a huge brand. Let's do it. This one, as you said, really is kind of my life's work. And I didn't know it. I started getting a lot of people over the last probably two years coming to me constantly, like every two or three days without exaggerating, either over email or text or social media. Can you help me hire a coo? Can you help me interview a coo? What should I look for in a coo? What should I like? All of these questions and I realized I was becoming almost the, the dartboard for that second in command question. And Gino Wickman had done an amazing job with identifying what the integrator was in a smaller company with the visionary integrator. But there was a lot more to that story. And, and then I started to interview all of these members of the Second Command podcast. There you go. Interaction. You know, I started to interview all these second commands in on my podcast, the Second in Command. And I had, you know, members of the CO alliance from 17 countries. So I started to get all their ideas together and I realized I had a lot of content there. So, yeah, I started to work on it. And about, I think about halfway through working on the book, something triggered, kind of triggered in me that I realized that this is one I should really put the effort into. Whereas a few of my others, I was opportunistic enough that I could get them done and out the door. And they were great. I thought I could really make this one, like really, really, really good. And so I just put everything into it and it's strong.

Yeah, yeah. So let's, let's break it down a little bit. So let's start at the beginning. I'm a company that doesn't have a CEO in place right now, or maybe we had one. Who's left? I'm advising you. You're giving me advice on how to Hire how to bring them in. We'll go through all the different steps of it. But where do you start with a company that is evaluating if they even need a coo, and if so, how do they slot one in?

Yeah, so what you notice as the entrepreneur who does not yet have that second in command, and I call it the second in command intentionally, because your first second in command could have very different titles than coo. It could be a VP of Operations, it could be a Director of Operations, it could be a General Manager, a Project Manager, it could be a president, but it's really somebody who's going to take a lot of stuff off your plate to either free up your time to work in your unique ability, or free up your time to give you a life or to, to help you get a whole bunch more done because there's too much to do. Or they might free up your time so that you can grow some of the people that are reporting to you that currently you can manage them, but you're not really growing them. Right. And I think the leader's job is really to grow people. So the first thing you have to think about as that CEO or founder is what are the parts of the business that feed you with energy? What are the things in the business that you're really, really good at? And, and what are the parts of the business that you know, if you spent more time on, you could really create a bit of a flywheel effect and then identify at the same time all the stuff that you suck at that drain you of energy that are, you know, either beneath you or you're not great at, or somebody else could just do a better job at if they would really put their, their energy into it. And that becomes the basket of things that your second in command will end up doing. Based on that basket of things, you'll know what the title should be and you'll know what to pay them. And the bigger the title, the more you're going to end up paying. So be careful you don't give out titles too early that are too big. The next part of that is, and this is the last part, then I'll let you kind of ask questions. Is the higher the title, the more strategic value that person should bring into the company? They should be able to understand strategy and to think their answer to every problem should not be hire more people. Right. They should be thinking about automation and optimization and saying no. And, and they should bring a level of strategic insight into the company that you probably don't have today. Those are Some core reasons.

It's an interesting way of describing it. A basket of things that you don't want to do. To be devil's advocate here, does that make it really difficult to find that perfect match when it's kind of cobbling together all these different things that you don't like doing to find that perfect match, to find someone that's really good in all those areas.

It actually makes it easy once you're really, really as Alice in Wonderland. You know, in the book Alice in Wonderland, I think the Cheshire cat said, if you don't know where you're going, any road will take you there. Well, once you're very clear on what you're looking for, it's very easy to find that person. So as an example, I really don't like accounting and finance and I really don't like engineering. And it. I'm not good at them. They drain me of energy and, and I suck at it. But there's people who actually went to school for it, like they, they like it so much they went to school for it. Whereas I was in second year managerial accounting and I was paying somebody to do my assignments because I hated it. So I learned how to hire an accountant and they went to school to be one. So when you find. So if I wanted to as a CEO have a second in command, I would find somebody who loved it and loved finance and they could run those areas for me in addition to some other stuff because I like the strategy and the networking and biz dev and PR and kind of the outward facing side of the business.

Okay, so you identified the areas in which you want to hire for. Are there skills assessments or personality assessments or anything like that that you recommend?

There are. And it's also something to be mindful of is that you're going to bring a second in command into your company for a reason or a season, but not necessarily a lifetime. And it's funny, I actually didn't even include this in the book. It's a concept that started to occur to me more and more in the last few months as I've been talking about the book. Often we bring in a second in command and I cover this part to do something in the business like a reorg or to leverage us or to get deeper into an area or to do change management or to free us up for the season component is they're not going to be with us forever because as the company goes through 2x and 4x and 10x, that COO probably doesn't have the skill set to run a company 10 times bigger than they do today. Right. So the key is to think about that component as well is what are we looking for, what's the size of the person, what are we willing to pay them and then to figure out where do we go find them. Right. Engaging a search firm, leveraging your social media, writing fantastic job postings and having a copywriter polish it so it really pops and resonates and kind of really attacking it that way.

Yeah. Now what about the team? So you've got an existing team. How do you hire someone where this person's going to come in and some of them are going to report to this newbies coming from the outside without angering the entire existing team?

Great question. I don't know if you've ever. Have you ever seen in Star Trek they played three dimensional chess.

Right.

That's.

You can buy those boards on Amazon.

I know Dimitri B. And who I'm friends with is. I think you might.

I saw that he posted it on Facebook. That's where I first learned about. I'm like the heck is that thing?

He and his son Vitalik, who, who started Ethereum play 3D chess together. So that's. This is like a 3D chess game. How do you understand how to sell some of the current employees that they're going to get to report to this new person? How do you keep your current people but let them know they're not seasoned enough to take the company to the next level? How do you bring somebody from the outside in without upsetting the Apple card? So there's. And I talk a lot about that in that, in that kind of first 90 day period. And also hiring the CEO who's very strong on the people side of the business, who will work hard at building the relationships and building trust and almost following Maslow's hierarchy of needs to establish that current safety and foundation of the people so that then they'll decide to follow. Another thing you can do is get your current employees to be part of the interviewing and hiring process of their new boss so they realize, wow, these people are operating at a different level than I am. I am really impressed with them and I really like this person, you know, above the other three maybe. So you get them to be a part of the process.

What about. So you, you've chosen someone, you decide you're going to hire them. Any considerations around how you bring them in after they've been hired, assuming your team's been involved in the hiring process?

Yeah, it's really following. I'm calling it the kind of first 90 day model. In the first 30 days, the second in command should show up with a notebook and a pen and they should walk around the company for 30 days, sitting in on every meeting in person or virtual meeting with every direct report meeting with all the other directors and VPs, listening in on sales calls, listening in on customer service calls, getting blind cc'd on as many emails as possible, reading up on the sops and processes in the company, really watching and observing and making notes of all the stuff they want to change. Fire Bob, integrate this, tie in that, bring in this software, but don't do any of it. Just make notes of all the things and maybe at the end of the 30 days, you've got 60 things you want to do. In month two, you go back and revisit all of those 60 things and you stress test them all. You know, asking some questions like. And you learn, oh, Bob really isn't as bad as I thought he was. Or oh yeah, Kelly is worse. We should really should get rid of her. But you don't act on them still. You just figure out which ones you should really be acting on. And then at the end of the month, you put them all in the order of operations, kind of the highest impact and the easiest to put in place things first. Month three is all about doing some of the stuff that are the easy wins that don't require a lot of people time or money so that the people around you go, oh, easy win. Oh, easy win. Oh, easy win. And they start seeing some momentum from some of these things, which builds their trust, builds their confidence. The momentum, creates some momentum. And in second quarter, you can start putting in place some of the bigger projects, some of the hairier projects, some of the integrations.

I'm curious if you would change that timeline if the house is burning. In other words, if the, if the company's got a cancer within it or something like that.

Yeah, I mean that's, that's a completely different scenario where the person's coming in and there's something. Ben Horowitz did a really good job with his book the Hard Thing about Hard Things, talking about the wartime CEO versus the peacetime CEO. And in that kind of a situation, when you're coming in and the company's cratering or something's really going wrong. Yeah, you need to come in and act. And you're not really worried about whether people like you or not, because the reality is if they all like you and the business goes bankrupt, what's the point? That's just a very different type and hopefully you can come out the other end of that. You will lose some people along the way, but that's okay. The point is save the company.

We are recording this at the end of January 2023. We've all observed this, especially in the entrepreneurial world with Elon Musk and Twitter in the last two months, very publicly. He came in and a lot of things you were talking about there, he did immediately he let let them know that the company was losing money. Had to let people go. Any thoughts on. On that as that's been un. Unveiling?

Yeah, he's doing absolutely the right things. I think he might be doing it in slightly the wrong way in terms of the communication behind it. Right. You can be a wartime CEO and still keep people calm. You can be a wartime CEO and still not be a dick about it. I think, and I've known Elon for 28 years. He couldn't be approaching some of this on a communications and a public facing side a little bit different. But he's doing the right things. Look, I just spoke to a CEO this morning of a company that six months ago had 120 full time employees. Today she has 11.

Wow.

She was doing high end recruiting and high end hiring of people for the tech sector and literally her entire business disappeared. Yeah. So she'll be fine. Like she's going to, she's going to turn and pivot. But in those kinds of situations, CEOs need to be ruthless. Right. You can't try to be liked by everybody. Well, oh, I'm worried about them because they've done their job and we're like, if I worry about the 110, all 110 are going to be out of a job.

Yeah. Now, in a situation where the house isn't on fire, normal situation. I believe I heard you say in an interview that the CEO shouldn't have to be the bad guy. Talk a little bit about that.

Yeah. Ideally, the CEO needs to be the iconic beacon. Right. The chief energizing officer. And we need to be able to come in with that good, positive energy for people to follow. And the COO's job is to be behind the scenes making all the tough decisions and shining the spotlight on the CEO to make them look good. The CEO internally needs to shine the spotlight on the COO to say, hey, Cameron needs to make the tough decisions. I need somebody to be doing the tough stuff. Cameron has to be the hard ass because it frees me up to just be able to Think and be a good culture. So you're both shining the spotlight on each other. And that's a really tough role for the CEO, the CEO to play, but most of them will happily play it.

Yeah.

Sheryl Sandberg as an example, for the first 10 or 12 years she was at Facebook as CEO, was a very much an unknown COO. It was only in the last two or three years at Facebook did people even finally get to know who she was. But she was there as Mark's COO for 15 years.

Yeah.

Yeah.

Quietly behind the scenes. Talk about the date night concept.

A lot of what I started to learn about the CEO COO relationship, part of it came from experiential, from Brian and I building 1, 800, got junk. And a lot of it has come from talking to the other COOs of our COO alliance and then even the Second Command podcast guests. The CEO and COO are very much the business spouses, right? It's like your husband and wife, you know, couple that happen to be running a business together. And all of the same rules of engagement apply. You need to be able to argue and fight, but not in front of the kids, right? So you need to be able to have your space for the two of you to argue and debate, but not in front of the rest of the team, not in front of the board, not in front of the employees, because they need to see a kind of a joint yin and yang force, right? You need to be able to have time to spend time with each other and decompress. Like getting out of the office together and going and having fun. Having date night, going away on vacation, vacations, going skiing, going and ride, you know, riding bikes together or whatever, but just doing some stuff to have fun so that you can settle into it and breathe and know that you're each on the same page and each driving the company forward. I think you also need time to just get away and kind of work on the house together, right? So Brian and I would get off site once a week and just sit at the tennis club and do work and not sit and having fun. We were just sitting beside each other or near each other in the same room doing work. But it allowed us to get off site and to just banter back and forth without the rest of the team necessarily being around and without the interruptions of the day to day. But lots of little systems like that are really powerful and foundational in that relationship.

How does the the build the CEO, especially in new or CEO, whether they're promoted within, but especially if they come from the outside, build trust when they really have to be the bad guy, in many cases, when they're evaluating systems and making changes.

So there's two sides to that. One is how does the COO build trust with the CEO? And then the second is how does the COO build trust with their team? They're both coincidentally the same. It's speaking honestly, it's speaking with candor. It's obsessing about the core values. It's owning up to the areas that you suck at and being like, I'm not good at this, and realizing we're all not good at stuff. It's being vulnerable and saying, you know what? I'm struggling at home right now with something, but not letting it affect your work. So it's letting people connect with us, but also realizing we have our shit together. So when you realize that every single one of us, you, me, all of your guests, my guests, we're all struggling with something today. There's something that each of us as humans are struggling with as part of the human condition. So when we can own that, whether we sit down with the CEO and we go, dude, I had a shit weekend, man. My wife and I had a fight, or my kid's struggling with this, or my dad's got cancer, or I'm worried about whatever. How's your weekend? He goes, oh, dude, I had. Blah, blah, blah. And then you go, shit. All right, ready to dig in? Yeah, let's get our shit in. And you just kind of own the fact that, hey, we're struggling. Hey, we're here for each other. Okay? Now let's get back to work. Those are powerful things. Another thing that builds trust is just making sure that our teams know us. You know, doing lifelines with them at our, you know, at your quarterly retreats, taking some of the exercises that we do in an EO forum or a YPO forum or a Vistage group. And those exercises work with your teams and your. And your CEO as well. That kind of stuff.

Yeah. One of the challenges, I know for me and for my business partner, Jeremy and I, as we built this company, has been figuring out when to hire at the right time. Who, you know, the proverbial who in the right seat. The right. Right seats on the bus. You mentioned earlier that, you know, sometimes you're hiring temporarily for a season, and there may be a point where you out outgrow that person. How do you know when you've reached that point, when you need a new person in that COO role?

Yeah. So it's the season, right? When. When that season is over. So I was Brian's CEO from 2 million to 100. I was a very entrepreneurial COO who had already built two other franchise companies. And by the time we got to the fifth year, the business was finally getting big. For the first four years, I was a playbox. I'd done it before. I could easily do it. I could wing it. I could make it up as we went. It was good. It started to get big at year five, and then it was really big at Year six. Brian recognized and spoke first on it. I knew it internally that it was time to get going. And then he pulled me aside one Thursday morning and he said, I think we're done. And I broke down crying, and he broke down crying, and he made me take a taxi home because I couldn't drive my car. And he was right. Of the five people on the leadership team, I was the last of the five to finally need to be replaced because the company that I came in to start running at 2 million was substantially different at 100 million. When I came in, I was the 14th employee. That morning that we talked, there were 3,100 employees system wide. You know, 12 months later, they brought my replacement in. She was the former president of Starbucks us. And she walked in and said, what a cute little company, right? And I'm going, fuck, it's so big. She ended up being the wrong person culturally, so she only lasted a year. And then Brian then brought in another COO who's now been there for nine years, 10 years. And Eric has been amazing, taking the company to 450 million. But he would have been horrible in the first six years. I've actually. Eric and I have been friends for 35 years. We started a fraternity together in Ottawa, Canada, in 1987. I was president year one, he was president year two. Strangely, he's now COO, but he didn't have any of the skills that I had for the first six years that were necessary. Just like I didn't have any of the skills that was necessary to take it to the 450 million.

It kind of brings us full circle. So it gets back to being really clear on what are the skill sets that you need from this level to that level.

Yeah. And have you done it before? Right. Have you proven that you've done it before? It's very key to remember that you need to hire people that have done what you need them to do, not that they've read a book on it or they have the theory behind them, you know, if you ask me. Do you know how to win an Olympic gold? Yeah, of course. Be better than everybody. Do you know how to swim all four strokes? Yeah, I can do back crawl, front crawl, butterfly. I'll drown doing butterfly bag and do it for like 12ft. But if you wanted someone who has broken an Olympic record at butterfly, has competed in all four strokes, has done individual and team events in the Olympics, that's a very different person than me that knows. Right. But companies get so sloppy with interviewing where we get all enamored in this person and their culture fit and they know how to do something but they've never done it before. You need to hire, so that's what you have to look for. And it's hard sometimes you need to engage a search firm to go and poach those people because they're often not looking for a job, they're already working.

Yeah, or the. But the flip side of that coin is you hire the former president of Starbucks who knows how to do it but aren't a good fit for other reasons.

Correct. So you need to hire both for culture fit and for proven skill set. And it needs to be for the right stage of the company. You can't bring in somebody who's too big and aren't going to roll up their sleeves if it's entrepreneurial. Nor can you put an entrepreneurial person into a big corporate environment.

I'm a big fan of gratitude. I'm a big fan of expressing gratitude, especially to those who've help you along the way. I'm sure there's a long list. Just looking at the back of your book, we've got a lot of, you know, impressive names, many of which I've had as a guest on this show. You've also mentioned some other names, so I'll throw up. Ben Horowitz, Sean McGinnis, Vern Harness, Joe Polish, Jason Gaynard, Gina Wickman. All amazing people, individuals and entrepreneurs and founders. But who would, in your words, who would you acknowledge? Who would you want to thank?

I, I gotta do, I'll do, do it fast. But I want to name three. Greg Clark, who founded College Pro Painters, was my first men, really created a real world mba, taught me the art of running a company and then I was able to learn coaching 120 of their franchisees. So Greg was foundational. We still talk today. The second is Jack Daly. Jack and I, he's known around the world for being this professional sales coach, amazing sales leader, has spent a lot of time one on one over wine and steaks talking. And Jack gave me some very foundational, formative ideas for my business 10 or 12 years ago. You know, selling my videos and how to structure my coaching and how to create teams of people that were all paid on. On commissions and just some really good foundational stuff for my business. He was really powerful with. And I've never said thank you to Jack, so that would have been a big one. Yeah, I had a third and. Oh, and then Greg Johnson. Greg was my mentor for about 18 months when I was the COO at 1-800-GOT junk. Greg was the former, being trained as COO at Starbucks. And we did. He did an hour call with me every month for about two years. And then one quarter he would come up to Vancouver for a full day. Next quarter I'd go down to Seattle, head office of theirs for a full day. We did that back and forth for two years. And that was really huge for me to grow as a leader and as a husband. And yeah, Greg was really. And he did it for free, so that was pretty powerful too.

Wow.