How To Surround Yourself with the Smartest Business Leaders

The second in command needs to be great at all the stuff that the CEO sucks at. Right? The second in command needs to really love the business areas that the CEO is not very good at.

What's the saying, Cameron? What is it your network is equal to your net worth?

What is it your network is your net worth. It's one of the reasons why I've been been participating in so many masterminds over the years. And every time I plug myself into these mastermind communities, I end up growing my network, I end up gaining new ideas on how to grow my companies, I end up finding clients, I end up spending time with current clients. It also just supercharges my energy and my ideas that I can bring back into my business. And I also don't have to be the one trying to figure it all out because I've met all these really other smart people. I can lean on them and ask them for ideas on how to actually scale my companies or how to deal with any problem or opportunity that's sitting in front of me as well.

Yeah, that community aspect is so important. And what's interesting for you is there are a lot from for the CEO and entrepreneurs, but what's so interesting about yours is there's not a lot for people in operations or people who are the second commands or coos. Is yours the only community that does that services operations?

Yeah, that's the, the core focus of what we really looked at was how do we create a community that is exclusively for the COO or the second in command. That's the COO alliance. Because they're not like entrepreneurs. The COO has a very different personality profile, they have very different needs, they focus on very different areas of the business than the entrepreneurs do. And the entrepreneurs have lots of their own communities, but there was really no safe space for the second in command to go to share ideas with each other, to share problems they're having to work on the relationship with their CEO or their team. And then likewise, we started the op spot recently. We've now got over 100 members of the OP spot globally. And that community is for anybody that's kind of in the lower or mid level operations roles because again, there were lots of conferences for marketing and for IT professionals, but there was never anywhere that just focused on the operations side of the business.

That's amazing. It's great that there's something like that now for people. Now speaking of that, you said it was really interesting is like, how would you define like the actual coo? Like what would be the definition that he would say if you had to pinpoint it.

The coo. There's a few people that I've been talking to about this recently, and the one that keeps coming back to my mind was Thomas Edison. And Thomas Edison said vision without execution is hallucination. And really the coo, or that second in command is the execution to the visionary. I've talked to a couple entrepreneurs recently, and one said that the COO is the brakes to their gas. And somebody else said that they're the leash to their Dragon. And I think there's something really powerful there to remember that the. The second command is there to save the entrepreneur from themselves. Right. It's there to slow them down, think through it more carefully, not make some of the mistakes that entrepreneurs can often make. Because we go too quickly. We're perpetual motion machines, right? We've got constantly coming in with all these new ideas. So the COO is the really the person to figure out the who, what, when, where, why, and how to figure out the plans and the budget to make the dreams happen. Very similar in a way to the contractor is the person to make the homeowner's dream happen. Right. The homeowner has the idea of what they want to build. The contractor creates the blueprints or the plans, finds all the sub trades and the workers gets everybody aligned, and then over the course of a year or so, builds out this home on time and on budget, hopefully. Right. That's really the role of the coo.

The one that connected most with me was it. Did you say it's the leash that controls my Dragon or Dragon?

Yeah.

Oh, my God.

That.

I mean, everybody needs something different. But that for me, probably that. That would be a very.

That's great, right?

Ye.

So good. There's something else that. That really has kind of come up with, and it's hard. It's why it's hard to define the second in command is because every second in command is so completely different. Right. Harvard came out with an article about 15 years ago called the misunderstood role of the COO. And I talk about it and go in depth with it. In my book, the second in command, where they identified seven distinct types of chief operating officers. They talk about the executor, the mvp, the better half, the partner. Where I kind of go with it is the second in command needs to be great at all the stuff that the CEO sucks at. Right. The second in command needs to really love the business areas that the CEO is not very good at. So if you kind of think through it that way. It gets very hard to define what a CEO is because every company is so different. If I look at all of the members we have in the COO alliance, I would say about 40 or 50% of those COOs have finance report to them and about half do not. I'd say about half of them have IT and engineering and product reporting to them. About half don't. About half have sales and marketing and some don't. Right. It's really what are the strengths of the CEO? So when we were building, when I was the second command at 1-800-got junk. I helped take the company from 14 employees to 3,100 employees in six years and from 2 million to 106 million. Brian was very strong in IT and finance, I wasn't. So I ran everything else in the business. I ran operations, the call center, sales, marketing, pr, our franchise operations. I did a lot of public speaking. I was very outward kind of facing coo. Now the COO that's there does no public speaking, never speaks to the media, and really doesn't focus on culture at all. He's very inward facing and he handles IT and finance, but it's a different stage of the organization. So it's hard to say what's a COO, because we have to match CEO skills, the CEO's weaknesses, the areas of the business the CEO doesn't want to work in. And we're there at a certain timeline of the business or a certain season of the business, and the skill set for that COO for that season or that timeline might be different than later on. Right. As the company scales.

That's so interesting. What I'm hearing basically is it's very hard to define what the skills of your second in command needs to be because it's really the, the opposite. You're missing half in a way from whatever the CEO is. So, so it always comes to CEO is first, and then you have to figure out what the CEO is second based on the strengths and weaknesses of the CEO. Is what I'm hearing correct?

Exactly. It's kind of like if, if, let's say a guy was out there and he was recently divorced and he wanted to get remarried and he meets a woman, he's like, oh, you've been married before? Oh, you've been a wife. You can be my wife. No, like you need to learn a lot more about that person to know if they match you, if they match your core values, if they match your desires, if they match the way that you show up as a Human, like, do they match you? Do they fit? Right. And that's by getting a deeper understanding of that person. You can't just get married to somebody because they've been a wife before and very similar. So the starting point of really understanding how to go out and recruit a COO or a second in command is understanding yourself as the entrepreneur or the CEO first.

That's very interesting. And so, you know, have you ever seen situations where CEOs haven't done the due diligence of the work, where maybe they don't understand themselves well enough and they make a mishire? Is that, is that really the first step that, that they should go through before hiring all the time?

Yeah. I was just hired to do a speaking event to a group of entrepreneurs recently, and I was talking about that, the scorecard that you need to hire a COO based on. And I put up an image of a scorecard which are kind of the five core areas of responsibility this COO has. And someone in the audience was taking a picture. I'm like, stop. You don't need a picture of that scorecard. That's a scorecard for one company. Your scorecard will look very different. You just need to understand what one is. But the last thing you want to do is use somebody else's scorecard. Right. Like, as an example, I love cooking. I wouldn't want a wife who doesn't want me in the kitchen cooking. Now, I don't, I don't necessarily like yard work or gardening. So it'd be kind of cool to have a spouse that likes to do yard work and gardening or I like certain kinds of food and certain kinds of travel. It would be nice to find a spouse that complements me in those areas. So it is really understanding your skills, your weaknesses. If I'm a CEO and I really love marketing, I'm really great at marketing. I don't want a second in command to come into my company who wants to run marketing because I'm going to be upsetting them all the time because I'm going to be meddling in their area. Right. I really want to hire a COO who doesn't want to touch marketing. And they're, they're thrilled that I'm running it because they want to run the other areas of the business that are there in, you know, within their purview.

Yeah. And now it makes sense why, like on the COVID of your book, the most recent one, the second in command, why you have the ying and the yang.

Right.

I mean, that literally is what you're looking for.

Yeah, that's exactly what you're looking for, is someone to balance you out on all of those areas and also someone who can free you up. Right. It's why, it's why they call in that article the misunderstood role, the coo. They talk about a couple of roles or like the better half or your other half or your partner. It's very much a partnering kind of role.

It is very much like marriage. Sometimes even you spend more time with that individual than you would in your own marriage, I would say. Right. The hours that you actually put in now, even though the, you know, the different skill sets need to be different, are there, is there some sort of like, common qualities or skills, no matter who you hire, that are always the same in this particular role of the, of the CEO? Like, what is it that you're looking for in that, in that role that never changes, no matter the different skill sets?

Yeah. So the answer is yes, and I'll walk you through some. But then as a company gets bigger, the skills then necessarily have to change. Right? The skills change based on the type of company, the size of the organization, but some of the commonalities, the second in command, the areas they need to be good at, they have to be very good at the people side of the business. So the people side of the business is, you know, the recruiting, interviewing, selection and onboarding of people. Because the second in command or COO is always helping the rest of the organization bring in good talent. They need to be really good at the communication side of the business, at being able to have a good, healthy conflict, being able to engage in good, healthy debate, be able to help groups of people who are coming to the table from different perspectives to have good debate and then come to some kind of consensus together. So to create harmony within that good, healthy debate, they have to be really good at helping to develop and grow people. Because as a company scales, the last thing you want to have to do is keep firing people because their skills aren't good enough for the new size of the company. So they have to really be good at those sides of the business, for sure. They also have to be really good at the area of strategy and business planning. Right. The strategy is to think about where we're going and how we might be getting there. And the business planning is putting the plans and the systems in place to ensure that we get to, you know, where we're going. And then you should be layering in things like budgeting and cash flow and understanding at least that size of the business. And again, it depends if finance reports to them or not. But they still have to understand those areas of the business more than another executive might.

Yeah, they need to have full P and L control to some degree or at least an understanding of it. And then it sounds like recruiting and culture is a big part of it. Right. Recruiting, hiring, culture. And then you had mentioned the ability to take strategy and turn it into sort of execution. Right. To see it through or be able to find the right people to do it.

And depending on the size of the organization, they also sometimes have to be very strategic themselves as well. Right. If a company is a 50 person company, strategy might be the CEO's role and they might be left to just figuring out how to make it come true. As a company starts to scale, typically the companies, the executives slow things down a little bit, even if they're growing very quickly and the executive team starts thinking of strategy together. So that starts to scale again. P and L responsibility. Sometimes they have P and L responsibility, sometimes they have full P and L responsibility, Sometimes finance reports to the CEO. And they might only have budgeting responsibility for different business areas, but they have to understand the finance side of the business more than the head of IT or the head of culture or people might.

That makes sense to me. What's a common mistake or mistakes that happen happens in hiring this role.

One of the big ones is that they end up mishiring based on the person's pedigree. So when I left 1-800-got junk as an example, they took about 12 months to find my replacement and they brought the former president of Starbucks USA to come in as my replacement as the COO at 1-800-got junk. I thought it was a fantastic hire. You know, very strong at multi unit operations, leadership culture. Problem was the second in command was very corporate, did not embrace the entrepreneurial culture, didn't embrace franchises, and really didn't like any of the guerrilla marketing tactics and believed that everything was from consultants. So that she was a mismatch in terms of the culture side of the business. She was too corporate for this very entrepreneurial company, even though it was 100 million in revenue. So she kind of messed things up and then 12 months later she was let go. It's mishiring based on the culture fit of the person and being too enamored with what they've done versus what they're supposed to be doing. Right. Are they a fit for what has to happen versus what they've done in the past.

That makes sense. So you really have to not only understand. So there's two parts that I'm hearing correctly. It's like you really need to. Before you find your second in command, if you're a CEO, you need to really understand yourself really well. But you also need to understand the culture of your company and how it operates. Right. At the end of the day to find the right fit. Because if you don't, then it's a problem. And then I heard a third thing that, that was really interesting. You keep mentioning this about seasons, like time and seasons. So. So you could have the right person now, but it could be the wrong person later as the company grows. Correct.

Like a great example of this again going back is 1-800-got- chunk. I was the right COO to take them from the 2 million to 106 million, but I was the wrong one to take them from 100 million to the billion. Eric Church, who's been now their COO for about 10 years. Eric and I have known each other for 35 years. He has been an incredible COO, taking them from about the 100 million mark to the 450 million. He would have been a horrible COO for the first six years when I was there because he didn't understand franchising. He wasn't entrepreneurial. He didn't know how to do everything that needed to be be done. We didn't have a team. I was employee number 14. I had to build out and hire the whole team. There was no one to delegate to. He would have been really bad at that season and that entrepreneurial growth season. Much like I would have been horrible in that more corporate, you know, strategic, multi business kind of environment that he's operating in.

Yeah, that's interesting. So speaking of that, so as you. What's also interesting is what's a mistake maybe from your own experience of being like a CEO when you're new to the role and maybe like this is your first time being a coo. What is a very common mistake they make? You know, growing the team. Like, is it growing the team? Like, what's a common mistake?

The most common mistakes that I see are in the first 90 or 100 days that they join the organization. Right. It's when they come into the organization and there's either an act of desperation by the CEO to bring them in to get some stuff fixed right away. You know, maybe they're replacing somebody or that we've been trying to recruit and hire this person for six months. We just need them to start. You actually need them to Start much slower than they can often start or you want them to start. So what I try to do is say that for the first 90 days we breaking up into three month periods. In month one, the entire role of this new COO is to come into the organization and observe, to sit in on meetings, to meet with each of the executives one on one, to go for lunches or dinners with each of the executives, to meet with them over zoom, to sit in on training sessions, to read manuals, to read playbooks. And while they're meeting and talking to and observing and sitting in on listen calls and sitting in on sales calls and sitting in on customer calls, they have a notebook and they're scribbling down notes. They're literally taking as many notes as possible of things that they observe over the course of that 30 day period. And they do nothing other than observe. In the second month they list all the things that they want to change, all the areas that are broken, all the opportunities that they see, and they try to rank them in highest impact to lowest impact. And then they go back and stress test each of their observations. So it's like, oh, I think we should fire Bob. Well, now they're going to go back and they're going to talk to a bunch of people to really understand Bob. And they might all of a sudden realize, nope, I don't have to fire Bob, I just need to move Bob into a different seat and he'll excel. Or yes, I do need to fire Bob, but not yet. So. Or maybe this idea of this software we have to put in place after talking to everybody, they could actually build something or put in a free system, or maybe they could automate a process or optimize a process and they don't need that software that they were going to put in place. So they're stress testing or testing their hypotheses for each of the things they want to do in month two, in month three, what I suggest that they do is put in place any of the easy wins, any of the small projects that are going to be easy wins, any of the projects that don't require a bunch of people, time or money that will help the company get some kind of a result or an ROI easily. If they put those easy things in place, they're going to build the trust of the team. The people around them are going to say, wow, this person's smart. They waited, they thought through stuff, this is an easy project. Oh, it yielded results. And now they're gaining the trust of the team. They're Gaining some of the better communication with the team. And in the second quarter they can start putting in place some of the bigger harrier projects.

That is absolutely amazing and I highly recommend that. If you haven't ordered Cameron's book yet, Second in Command, it goes into much more detail about this and it's a perfect read for both the CEO as well as the CEO or anyone looking for their second in command. Order the book on Amazon. If you live in North America like I do, it literally comes the same day. It's 100% worth a read and it's jam fact, full of information. But you can read this in like one weekend. I read it like in one Saturday just sitting in my backyard and just loved it and underlined it and dog dared it. There's all kinds of amazing stuff in there. Cameron also has like a really good course as well too. I know like something that I learned from Cameron, working with him over the years is I was always trying to fix things and you don't need to fix everything, especially a lot of things around leadership in your, in your team. Like I've always, always had trouble training middle managers and managers, but Cameron has this called invest in your leaders. What is it? Cameras? Like a thousand bucks or something? Or it's not very much.

$740.

$740. Okay, go sign up for the course and then just put your team through it. It's the best leverage you'll ever find in your life is how long would it take someone to come up and with all that information, like how long did it take you to learn that and put it in that way. The train, middle managers, I mean to.

Go through the course, it's only about five hours of watching the videos that I've recorded for everybody and going through the written information and the test. It's about five hours total, five and a half hours total. It's taken me about 20 years to go through and learn, work with mentors, read the books, go through classroom sessions on this content. Like I'll give an example, one of the content areas called situational leadership. I've probably spent 30 hours in classroom and working with coaches on, on the situational leadership model. Well, I condense it into like a 30 minute module to really help the entrepreneurial companies and leaders kind of gain these skills. So yeah, it's a crash course in everything that's helped me and it's not in my books. It's the content that, that I've really worked behind the scenes in coaching CEOs and CEOs with all over the world. I just decided to codify it two years ago and put it in as a course.

What have you found? One of the best ways for CEOs to improve systems and processes.

One is to take a look at kind of mapping it out, to map out the system from, from start to finish, whatever that system might be. Let's say it's the, the onboarding of a new member into the CEO alliance. What are all the things that need to happen? What are all the steps of that process that needs to happen? How many minutes or hours do each of those steps take? Who does each of those steps of the process? How can we optimize those steps? Or even before that is, can we stop any of those steps? Like the things that we do, can we just delete it? Right? Can we add it to our, our stop doing list? So let's stop some parts of the process completely and then can we optimize any of those steps of the process? Right. Can we make it simpler? Can we make it faster? Can we template it? If we've optimized it, then can we automate it? Right, so it's stop, optimize, automate. And if it's automated, you're great. If you can't automate it, can you outsource it? Right? So can you get a freelancer and can you leverage things like Zapier or if this, then that to kind of have a step notify somebody that their work needs to be done and then you have a freelancer or an internal person working on that part of the step to kind of speed up the process and then, you know, delegating internally. It's also about the training parts of all the processes. So it's making sure that people know how to do each of the steps of the process and that they have the confidence to do each of the steps of the process. And then it's also around Parkinson's law, that work expands to fill the space that we give it. So projects or even individual tasks can often take much longer than we want them to take. So it's by telling people, hey, this task is a one minute task. I don't want you spending 26 minutes on this one minute task. Because if you multiply that over the course of the year, it expands. And so it's thinking about all of your processes that way. Stop optimize, automate, outsource, delegate. And then can we also train people on those functional areas and give them the skills and the confidence and then control the amount of time and money that each step of the process takes. That's the way my thoughts work around it. And then, yeah, if you're a company that has at least 5 million or greater, for sure you want to get your second in command to join the COO alliance. So stay ahead of the curve as a COO. This next video is packed with great leadership lessons for you. It'll really help you as you continue in your growth.