In this solo talk, Cameron Herold argues that small and mid‑size companies should stop reflexively hiring more staff and instead focus on maximizing the output of their existing workforce. He recommends hiring fractional CFOs/COOs to provide strategic financial oversight at a low cost, and uses the square‑root rule (≈√N employees generate 50% of output) together with the Pareto principle (20% of staff produce 80% of output) to identify a core group of high‑impact employees that must be protected and developed. Herold describes a bi‑annual activity inventory where every task is examined to decide whether to kill, optimize, automate, offshore, or outsource it, invoking Parkinson’s Law and leveraging AI tools like Zapier. He visualizes each line‑item on the P&L as a gear, urging leaders to target the biggest gears for the greatest leverage. An illustrative case study shows how a franchisee of 1‑800‑GOT‑JUNK reduced labor costs by installing RFID chips, cutting padded time and dropping labor from 26% to 23% of the P&L. Herold also stresses investing in emerging leaders through mentoring and training programs, and promotes his books Double Double (how to get more done with fewer people) and The Second in Command (unlocking the power of a COO). The overall message is to replace headcount growth with smarter processes, strategic fractional expertise, and focused leadership development.
Chapters
If you're a small company and you can't afford to have a real CFO, you probably have a controller with a big title. That's fine, right? But go get a fractional CFO that can look at your P&L, can look at your budget every month, can give you 10 things to work on. Maybe they can coach your bookkeeper a little bit, but get a fractional person. When I started my company 18 years ago after leaving 1-800-GOT-JUNK, my company was called the Back Pocket COO. And my basic pitch was, you can't afford me full-time, but you can't afford to not have me in your back pocket. 50% of your output as a company is produced by the square root of your number of employees. So it's a little bit confusing math, but how many total employees do you have? Let's say at your corporate offices, about 200. Yeah. So the square root of your number of employees would be about 16 people. So 16 people produce 50% of your company's output. And then you go to the Pareto principle, which says 20% of your people produce 80% of your output. So 40 people produce 80% of your output. Somewhere between 16 and 40 people is your core. God forbid they ever quit your company. We need to make sure that they're handcuffed and we need to grow them. Those are your emerging leaders. We need to give them the skills. We need to put them through Invest in Your Leaders course. We need to give them mentoring. If we really take care of those racehorses, you can actually get rid of most of your C players who aren't producing enough to even worry about. And then what we end up doing is spending all of our time and all of our energy and more CCs and more Slack messages and more meetings with all of the C players who aren't giving enough, enough output. So not only does it cost money, but it's the time and energy drain. And that's what happens is when you have a mid-level team that keeps saying, I need more people, we build all this complexity into our company that's not needed in the first place. The working title for my first book, Double Double, was actually How to Get More Done with Less People Faster. That was the working kind of theme around it. Because you don't actually often need more people. You need to get people focusing on the critical few things versus the important many. I look at the work that we're doing and I do an activity inventory of all my people every 6 months. I look at all the stuff that we're doing and the first thing I look at is every single task. I like, do we need to keep doing this task? Can we just kill it? Like, does it really need to be done? Because why would I delegate something or outsource something that we don't even need to keep doing? If we're going to keep doing it, can we optimize it? Can we do it faster? Can we do it shorter? Can we do it in less time? Parkinson's law says that work expands to fill the time that we give it. So if you give something 2 days, it'll take 2 days. If you give it 4 minutes, you'll get it done in 4 minutes. Can we get it done faster? Once I know we've optimized it, then can I automate it? Like, why am I going to delegate something that can be done by AI or by Zapier and can just be done by the machine? If we can automate it, that's great. If I can't, can I outsource it? And can I outsource it offshore first? I've got people working for me in Brazil, in the Philippines, in India, and Karachi, Pakistan, rather than outsourcing or delegating to a person here in my office or even in the United States, can I offshore it first? If no, then can I get it done by somebody outsourced? Because I don't need it more in my house. I want a fractional person that can just do that task 2 hours a month or 2 hours a week. And then worst case scenario, can we do it internally? The problem for mid-level managers is they keep saying we need to hire more people instead of can we even stop it or optimize or automate it? If you haven't read my newest book, The Second in Command, go grab a copy right now on Amazon. And you'll learn how to unleash the power of a COO. And if you already are a COO, you'll learn how to really build an incredible partnership with your CEO. And you know what a good way to look at your numbers is? Picture every number on your P&L, picture every number on your budget as a gear. And you know how some gears are bigger and some gears are smaller? Yeah, even like in a watch. Right, or on a bicycle, like a bigger in the front, right? So picture which gears are the biggest gears that if we optimize that gear, it'll throw off the most optimization in our company. So as an example, when we were scaling 1-800-GOT-JUNK, one of our franchisees was obsessed about how much gas he was spending on his trucks. He was tracking everything. I'm like, gas is only 4.1% of your P&L. Your labor is 26% of your P&L. Why don't we optimize labor? So then what he started doing, he put these RFID chips into the trucks and he only paid the guys for when the truck started to move. Until when the truck was parked at the end of the day. And what happened was they got rid of about 15 minutes in the morning. Like, guys would say, I showed up at 8. Really? The truck started moving at 8:12 and I finished at 4:50. No, you finished at 4:30, but you actually padded by 20 minutes. So what he started cutting was about a half-hour day per person. He dropped his labor from 26.2 down to about 23. That's like literally not having any gas in your vehicle. Well, that was a big gear. The second biggest gear was dump costs. Right? You can't optimize for franchise fees or royalties. We're not changing that gear. But which gears can you actually optimize? If you're a small company and you can't afford to have a real CFO, you probably have a controller with a big title. That's fine, right? But go get a fractional CFO that can look at your P&L, can look at your budget every month, can give you 10 things to work on. Maybe they can coach your bookkeeper a little bit, but get a fractional person. When I started my company 18 years ago after leaving 1-800-GOT-JUNK, my company was called The Back Pocket COO, and my basic pitch was, you can't afford me full time, but you can't afford to not have me in your back pocket. So if you're a small company and you can't afford a real strategic CFO, get a fractional for $1,500 a month that's going to look at your numbers for you. Maybe a 65, 70-year-old former CFO who just wants to have some casual cash coming in as he's living in Portugal.
