The 3 Most Important Things COOs Must DO

The things that COOs have to get better at is delegating, growing people and not overseeing it, letting other people oversee it.

Before we get started, we just would like to know a bit about the CEO alliance for any of our listeners who are all CEOs who might not know about it yet.

Yeah, I started an organization around seven years ago called the COO Alliance. And the reason I started it was I played the second in command role a number of different times for a bunch of different companies. And I kept showing up at events that were meant for entrepreneurs, trying to learn, trying to build my connections, build my confidence. Kind of shed some of that imposter syndrome trying to build my network. And I didn't fit in. I thought about it, it was almost like a guy showing up at a baby shower or a bachelorette party. We just don't fit. We're not supposed to be there. You know, as much as it's like 20, 23, guys just don't belong in the room, or it's like a woman showing up at a stag or a bachelor party, it's nice to have you, but you don't really. So I didn't fit in the room for entrepreneurs, but there was nowhere for me to go. So we started this organization off as a global community of second in commands to be able to learn from each other, share resources with each other, grow their connections, grow their confidence. And there's no entrepreneurs in the room to take over the conversation. The COO has to be the leash to the dragon or we need to be the brakes to the entrepreneur's gas. But we can't kind of come to a screeching halt. Right. So yeah, we definitely need to tame them, but we don't need to. We can't take away all of their craziness because that's what makes them so unique. Right. We can't get rid of their, their bipolar, we can't get rid of their. ADD that. Those are, those are superpowers for them, actually. But we need to understand how to save them from themselves too.

Exactly. So going totally off piste on our first question, because I'm hoping, Cameron, you might be able to answer one that we struggle with every single time, which is the controlling CEO. And how do you let go? How do you convince them to let go of some power?

I always try to appeal to what really matters to the CEO. Right. Our job is to make them look good. Our job is to help them make their dreams happen or make their vivid vision come true. So you need to show them that what they're doing with being so controlling is hurting them. You just say you can do it, but it's kind of like the emperor's new suit. You know, the emperor who's getting this fancy clothing made and the tailor's telling them they look perfect. Meanwhile, we know that there's no suit at all. We know they're naked. Someone needs to tell them that they're naked. Someone needs to tell the CEO that although they think they're looking good, although they think that they're doing the right thing, they're only hurting themselves so they can choose to stay controlling. And you're going to tell them that it's not working. And I think if you appeal to their sense of greed, their need for profit, their need for praise, their. Their need to avoid conflict, you show them that all of those things that they're doing are just hurting themselves. They'll usually be open to hear that, especially if you do it privately, one on one. If you ever tell a CEO what they're doing wrong in front of the board, in front of the leadership team, in front of other employees, you're dead to the water. Because they're going to defend their space, they're going to protect themselves. But if you do it privately, and I always say, hey, can we go for a quick walk or can we go grab a quick coffee, or. I just want to tell you something I'm noticing, and I think it's hurting you and your company. I think it's hurting your profitability. I think it's hurting the way that people see you. And it's hard for me to tell you, but can I tell you? They'll be like, yeah, because no one ever tells me the truth.

It's interesting. So I. I do it in a slightly different way in that I tend to wait and hold my conversation until I notice that they're ready for it.

And the learner controls the environment, right? If they're not ready to learn, so that's kind of waiting for them to trip and fall once they trip. And like, if you notice their shoes are untied and you're going to tell them to tie their shoes, but they're stubborn, they're not going to listen. But when they trip over their own shoelace, then they might listen to you. I find that that's good in the early days of being their second in command, maybe for the first three or six months. But at some point, we've built enough trust that you can actually lean on all of that trust. You can lean on the fact that you've been able to help them to this far. So it's easier to have the tougher conversations when you've built that foundation already.

As long as you know they're ready for it that day. You still need to read the room for the where they are well, and.

Don'T do it in a room with other people. That's the key. Right. But yes, they have to be ready.

So I guess maybe to take the conversation in a slightly different tack. You know, you were, you were jacked into the CEO community. You've written a book about CEOs. You have thousands of CEOs that you've spoken to over many, many years. As it stands right now, as we head into 2024, what do you see as the priorities for cos talking to all these folks as we head into 24, what are they now thinking about and maybe how is that different from previous years?

Great question. Yeah. And my sixth book is called the Second in Command and it was really written for this COO community. So there's a couple of things happening right now that are very different from the last. Really the last 14 years. From 2009 until 2023, the economy in the market was going up. Your business was growing. It was like rising tides lift all boats. So really, any leader 35 or under has never known business to ever be tough. They've never built a business through a downturn, through an economic crisis, through inflation. Right now we're in a period of quasi stagflation, which is a recession plus inflation happening at the same time. And it's hard for entrepreneurial organizations or CEOs to lead through that. So they have to start understanding how to lead through tough times, how to lead through unideal situations. They have to be able to confront the brutal facts. They have to be able to make decisions and understand the budget and the P and L and gross margins and ratios better. So they really have to have a better hand on the numbers and budgeting than they ever needed before. Because business just grew because everybody was growing. That's number one. Number two, I saw a T shirt years ago and it said, right now out there, someone is practicing and when they meet you in head to head competition, they'll beat you. And I think right now the rate of change in our businesses is so fast that if you're not growing quickly, if you're not adapting quickly, you're dead. You know, if the rate of change outside your business is greater than the rate of change inside your business, you're out of business. And companies have to adapt with the use of technology, Leveraging AI, leveraging automation, being able to work with hybrid workforces or even bring people back into the office. We don't have years to figure something out. We don't have months to figure something out. We have to adapt to change much quicker. So we have to be able to surround ourselves with a network of people we can lean on. We have to make decisions faster. We have to look at the data. That's something that I think is very different for COOs. And then I think third is we need to be able to grow our people's skills faster than we've ever grown them before. We used to be able to hire people saying, I'm going to hire you to do a job. I'll hire you based on your past experience. You'll come in and use that experience to do your job, and we'll train you a little bit over time. But when a company is changing so drastically, when AI is changing things so drastically, when the economy and market conditions are changing so drastically, when a company in Ohio in the United States is losing an employee to a company based in Lichtenstein, all of a sudden they're going, wait, what the hell is going on here? The world has changed. I think we need to be able to grow our people faster so that they can adapt. Because a person's job today is going to be very different in 30 days and very different in six months. And COO's need to be really good at growing people. I've always visualized that our people have to grow in three ways. We have to grow their confidence, we have to grow their skills, and we have to grow their network. I almost visualize like an employee is climbing up two ladders that are right beside each other, and their left hand and left foot are climbing up the skills ladder, and their right hand and right foot are climbing up the confidence ladder. So our job is to grow their skills and grow their confidence, which grows their skills, which grows their confidence. And at the same time as you're doing both of those, to try to grow their network so that they're plugged into other communities of people doing similar jobs so that their resources are able to be shared very quickly. Very similar to a kid who's 10 years old playing computer games. They have this global network of people that they're collaborating with and problem solving with. We have to plug our operations people into operations communities like the OP spot, where they're connected with other people in operations. We have to plug our IT people into communities like 7ctos. We have to plug our marketing people into communities like Trends. We've got to be able to plug our people into communities and then we have to figure out not the skills around what they do, like how to use a software or how to do a YouTube ad or how to run a payroll process, but we need to grow their skills around how to be leaders, grow their skills around delegation, situational leadership, coaching, project management, handling conflict time management, running interviews, kind of the executive functioning skills so that people can become stronger at leading themselves and leading teams. And I think if we do that and then couple it with a lot of praise, a lot of gratitude, a lot of celebrating the core values, that will grow their confidence.

That's quite a complete answer. When it comes to the CEO as a budget and the question of them looking at the budget for 24 and making new decisions this year that were different from last year, where do you think that skew comes from?

A little bit.

If they're going to invest more in, you know, let's say, you know, kind of coaching capability or training capability or growing people's careers or anything in that space as an example, then where, where should they be drawing down? So how do you balance that equation?

I guess so you can always look. I always look for leverage, right? I always look for how can I do something and leverage it so that I get more than one output from that one thing I'm doing. So as an example, let's say that I was bringing in a coach to train people on running proper job interviews, right? It blows me away, the number of managers who interview and hire people and they've had no training on running interviews. So I would hire a consultant, we'd run a training session on running interviews. I would then have that, that session videoed and I would share that video with all other managers and leaders that couldn't attend. I would have anyone who came to that session also maybe read the book who or read the chapter from my first book, Double Double on People, chapter two. And then I would have them kind of do a book report on what did you learn from the books and what did you learn from the consultants and what are you going to be putting in place? And I would try to cobble together some kind of an internal program around skill development, which leverages my money and it leverages the kind of virality part of the learning. The other part is it's around growing their confidence. Right. And I think we often miss that, that if you've got an employee base that feels good about their jobs, feels good about their skills, they're going to work harder, they're going to work smarter, they're going to get better results. So it's doubling down around the praise, it's doubling down around the gratitude, it's doubling down around, you know, celebrating all of our successes. And I think a lot of leaders miss out on that one.

Do you have any tips on how to give good praise?

Yeah, it's really like growing our children, right? When you've got kids, you don't wait to do a 90 day review with your two children to say, hey, good job over the last three months. Months, you catch them doing something right every minute of the day and you praise them on what they did, right? And then you also catch them instantly on where they mess up and you say, hey, can't do that again. This is how you do it properly. It's okay, I still love you, but this is how you do it properly. You grow them and you coach them. Well, leaders need to be really good at that situational leadership of growing people. But we also need to, every minute of every hour of every day, look for people doing something right. I remember the story about Howard Behar, who is one of the four or five CEOs of Starbucks. And when Howard Behar was CEO, he would spend two hours every single Friday handwriting thank you notes to people and different stores inside the 14,000 store network at Starbucks. So every Friday on his desk was a stack of thank you notes and a spreadsheet. Store number 12 Frappuccino Record. He'd be like, hey, store number 12, congrats on the Frappuccino record. Really, you know, that's amazing. Love you. See you in the field, Howard. Kelly Smith, seven years. Kelly, congrats on your seven years at Starbucks. Love that you're still with us, Howard. He didn't know who to praise, he didn't know who to thank, but there was a system in place and he was doing two hours every single week. So that was like 5% of a 40 hour workweek. On praised COOs need to put time in their calendar to praise people, Put time in their calendar to find out who just hit some good results, find out in their calendar who's living the core values and then send out a loom video, send out a slack message, send out a personal note, send out an email, whatever. But spend time catching people doing something right and praising that has to be in your calendar as a specific working on the business. And if we're so busy doing stuff we're often doing the wrong stuff. Right. What we should be doing is delegating all of the stuff to people that don't have the skills to do it yet. Train them and give them the skills and confidence to do that stuff. And then we should be leading versus.

Doing a hundred percent. And there's one thing in your praise that you were automatically doing but didn't call out, which is be specific about what you're praising. Saying good job doesn't matter. Saying good job because you did X matters.

Yeah, good job with the way you took the milk out of the fridge and you poured it carefully using two hands. And I'm really proud of you for putting it back in the fridge. That's what the kid remembers, right? Not hey, good job this morning. Good job at what mom? Right? Or good job what dad? Yeah, very. And I also like being very specific on praising that you lived a specific core value in a specific way. Like, hey, great job on delivering what we promised, which is one of our core values. When you got back to that client at 3 o' clock today and you told them you were going to get back to them by the end of the day, that's amazing. They were really happy about that. Right? So it's reinforcing praise based on specific things and doing it very quickly after it happened. Don't wait 90 days to say, oh, good job three months ago for getting back to somebody. By the way, the book the One Minute Manager that was written by ken Blanchard and Dr. Paul Hersey 40 years ago is still to this day probably the best book on managing and growing people that exist.

I was reading all of these leadership and management books at the same time as having a newborn and a 2 year old. So I was reading all of the parenting books at the same time and I would also alternate between the books and at a certain point I was like, I don't need to alternate anymore. These are actually saying the exact same things. And so it's just great for you to see that as well.

Growing a business is so similar to growing relationships. You know, the COO CEO relationship is identical in so many ways to a husband and wife or two partners in like a lesbian or gay marriage doesn't matter. You have to work on communication, collaboration, making each other look good, having time away from the kids where you can build relationship and have fun and reconnect. You've got to be able to fight and argue and debate for the good of the company or the good of the family and the good of the family's Core values and the good of the family's future. But you do that away from the kids. It's so similar. And yet we think that business is difficult. Business is so simple.

That is true. That is true. Bethany has talked about this quite a bit in the past around the kind of the parenting skill set and how it's quite similar. So that's validity.

Husband, wife, skill set.

Just because.

Because I've always, yeah. Having been a COO and a wife at the same time of like, I can only do one of those relationships. I'm not going to do both anymore. You have to choose which one.

They're so different and so tough. You know, there's that old book years ago that came out called Men are from Mars, Women are from Venus. And I think In a way, CEOs are from Mars, COOs are from Venus. Right. We're just different. Men are not hairy versions of women, and women are not more intuitive, fragile versions of men. We're different. We see the world differently, we perceive the world differently, we solve problems differently. But if we can work together, wow, we can be an unbelievable force. Entrepreneurs and CEOs see the business differently than their COO does. You know, there's this term that was kind of created by Gino Wickman, who wrote Traction and created the eos, the entrepreneurial operating system. Gino and I have been friends for 15 years. The idea of visionary and integrator is similar to the Men are from Mars, women are from Venus. CEOs are going to approach the day to day business in a very different way. But they need to understand how to speak to the coo, how to collaborate with a coo, how to delegate projects to the coo, how to give the COO space, how to help the coo. And the COO needs to learn how to speak to the entrepreneur, how to solve problems differently, how to approach them differently. If a COO goes to their entrepreneurial CEO with all the facts, all the figures, all the data, all the graphs, all the research they've done, you've now overwhelmed someone who just wanted the one sentence. We want you to have all the information, but please don't give it to us. And then we're going to come to you and say, give me the rest of the information. You'll be like, I wanted to and you didn't want it. Yeah, but it changed now. Right? We need to understand how to work that relationship. So there's a lot that needs to be done around understanding the different leadership styles that exist between the two.

Yeah. That makes sense. And then the other thing that occurs to me as we're heading into 24 is. Or actually we're in 24, I guess, but as we're kind of going through 24 here, the question of how the CEO role is changing or evolving, because it feels like we're also going through a bit of a transition, or at least there's different thoughts, I guess, emerging as to what the CEO role is, the responsibility and whatnot. I'm just curious what you think.

Well, what's really interesting around the COO role, and Harvard wrote an article about this in Harvard business review around 17 years ago called the misunderstood role of the COO. They identified different types of chief operating officers. And I think what we're noticing now more than ever is the different type of chief operating officer is emerging. More and more companies are realizing that you can't just take one COO and move them into another company and think they're going to work out. The COO has to match the skills of that entrepreneur. We have to match the personality profile of that specific entrepreneur, and we have to match the stage of business that that company is in. Let's say that I was out looking for a wife. I'm not happily married, but let's say I was looking for a new wife. I can't just go, oh, you used to be someone's wife. You can be my wife. No, I don't know if she matches me or if I match her. I don't know what her goals are, her dreams are, what mine are. I don't know what jobs I like to do and she likes to do. And I don't know if she wants to have kids or I don't like. We need to understand the stage that we're at in our evolution as a human, and how do you match that other human? And I think a lot of CEOs are now realizing they can't just go out and hire someone who used to be a coo. They need to understand a lot more about what kind of COO am I really hiring? Am I hiring more of a mentor or a partner or the MVP or the executor, the change agent? Like, what's the kind of role this COO needs to play? Very different from all the other functional areas. If you were the head of marketing for one company, you could probably be the head of marketing for most companies. If you were the head of HR for one company, you could probably be the head of HR for most companies. But the head of the COO. Some COOs run finance, some don't, some COOs run it, some don't, some oversee marketing. So it's really a delicate balance of really understanding what you're bringing in more than their role changing, I think.

Although what's really interesting, and I agree with you, is we are part of an organization here called the COO Roundtable and it's, it's in London and It's mostly tech CEOs and we were in a, in real life event in a room together and they're ba. Like we're all very much the same people. And I used to not think that I could find my people and now I found them. And although we're all doing very different jobs, there does seem to be something that is consistent in the personality of somebody who becomes a coo. And the actual.

Remember something you said though you also said that they were tech CEOs.

Okay, so maybe we have similar attributes.

Yeah, there's a lot of other industries out there where the coos wouldn't share. So as an example, I did not have IT or Tech reporting to me. Our project manager reported to me, but IT and finance reported to the CEO in the company that I built. And I took 1, 800, got junk from 14 people up to 3,000 and tech didn't report to me. So for me, I would joke with people, if they started talking software, I'd be like, yeah, I'm a hardware guy. If a hardware guy's talking to me, I'm like, oh, I'm a software guy. Fuck. I was neither. I didn't understand either. Yeah, in your niche or that industry of tech, most COOs would be very more similar. But if I took a COO from a nursing home, or a COO from a staffing agency, or a COO from a junk removal business, they might not be anything like you because they don't oversee that same. They don't see the world from that same perspective.

And so do you. I mean, you've spoken to, to Brandon's point earlier, thousands of COOs in your career. Do you see any commonalities?

I do. You know, I just had the second in command for Robert Kennedy Jr. S campaign on our podcast. So Amaryllis is unbelievable as a second in command managing a very fast growing company, managing budgets, managing internal and external communications, managing pr, managing hiring, managing like time and calendars and chief of staff stuff. Really not running any IT whatsoever. But what an unbelievably strong leader. What I've noticed of COOs is they need to be the strongest leaders of anyone in the organization because they're not only leading the functional areas that reporting to them, they're also leading other leaders in the organization. They're building communication, they're building consensus, they're building healthy debate, they're building strong communication so everyone knows what everyone's working on. They're good at managing conflict, they're good at managing resources and budgeting and timelines, usually much better than most other functional heads are. Most other functional heads are very good at running their business area and they usually struggle with the other business areas like marketing. Can't speak it and it can't speak finance, and finance can't speak people and people can't speak communications. But COOs tend to be able to be okay in having conversations with all. That's pretty unique.

Something that's always been in the back of my head is like, what in the kind of tech CEO space are we missing? Because CEOs at large that deal with other types of verticals and industries and so on. I suspect there's learnings out there that could inform the tech CEO segment in ways that we can't see, if that makes sense. And I'm just curious, from your vantage point, is there anything out there that you would think that CEOs at large, they've learned something that we haven't learned, that we probably should learn?

Well, I'll give you one. I was coaching the leadership team at hootsuite and this was Ryan Holmes and his leadership team and the CEO and we're running their strategic planning meetings. This was years ago now, but I remember kind of banging my hand on the table and saying, stop. We have to focus on profitability. We can't keep focusing on build or bust. We can't keep focusing on getting to the next round and getting to the next round. Like we have to run a f ing company. And a company has revenue and cost of goods sold and gross margin and overhead and net margin. And we need to focus on making profitability. And I think tech CEOs have to at some point. It's happening very, very quickly in the Bay Area now where we're doing down rounds. We're raising money at less than we raised two years ago. We're raising money just to kind of get to the next payroll. I think tech COOs need to actually focus on building real businesses now and hopefully be able to leverage the markets and growth. But the whole build or bust, it's very, very easy to keep hiring and keep staffing when you're raising all this money. But that's not real. It's almost like a mirage. I think got real over the last two years where a lot of tech company COOs and a lot of tech companies in general. I mean, look, I've been doing so many angel round investing right now off Angellist and it's interesting watching the down rounds that I'm investing in on. I think tech CEOs need to be much better at getting their companies to profitability quickly.

I think it sounds like a pretty reasonable one having been through or being old enough to have survived the dot com bubble and cost where everybody's like, look, none of those companies were real. And then knowing how to build a real company and then having all this free money for the last 10 years, we all forgot how to build real companies. And I think you're right. We need to do that again.

Beth. We were a publicly traded company in February of 2000 and we just sold our company to a US public company, Network Commerce, for 64 million. But our transaction wasn't going to close for four months. And this was February 15th, March 15th, Steve Ballmer from Microsoft stood up and said there was an Internet bubble. We're like, no, don't tell everybody. And then NASDAQ crashed by 78% over the next six months. And our 64 million valuation the day we got out was 3 million. We lost $61 million worth of valuation. We went from a $24 stock to a $2 stock. And I left Seattle that October of 2000, went up to Vancouver to start working with Brian to grow 1-800-got junk. And I remember laughing and crying at the same time because I lost almost all of my equity. But I remember thinking, I hope the last person to leave the city of Seattle remembers to turn out the lights because it was shutting down, man, like everybody was. And that was a real lesson, right? That was a real, that was a real formative lesson that you needed to build real businesses. And I can't trade, I can't buy a million dollars of your advertising and have you build by a million dollars of my advertising. Both of us call that revenue and book the expense. I mean there's no profitability here. Like you can't keep playing the shell game. And I think, yeah, companies need to realize that it's good to be able to grow. It's good to be able to leverage your balance sheet. It's good to be able to raise debt and equity financing. But it's also good to be able to grow a real business with a real P and L with Real numbers.

I think it's going to be fascinating to see what happens while we're in this stagflation moment and AI has arrived. Because AI feels like the Internet all over again.

It does.

It's a crime for a bubble, but we don't really know where the money's going to land.

Well, I think what's different with AI or the same? We're poised for a bubble, but we're also poised for the companies that leverage AI properly are going to absolutely win. It's like the companies that leverage the Internet. Look, I started buying Amazon stock in 2003 and I've bought more Amazon stock every quarter for the last 20 years. And for every quarter for 20 years. My dad kept telling me it was too expensive. Right. So if you can leverage a tool that is real to drive profitability, to drive growth, to build a real business, you're going to win. The only employees out there in operations or in marketing or IT who are at risk of losing their job to AI are the employees that don't learn to leverage AI today in their job. Right. And we're all talking about, you know, chatgpt as one, but there's a dashboard that I love called there's an AI for that and it shows 12,500 different AI tools that exist to do roughly 10,000 different tasks. We should be allowing our employees to play with AI at one or two hours a week and then come back in on Monday and do a five minute book report or a loom video on, hey, I was playing with this. Here's how I'm going to try to incorporate it in my job. We should be leveraging AI more and more inside of our businesses and getting all of our employees to learn to leverage AI inside of our businesses. Those companies will absolutely win. And I call it almost ideas having sex. That if you can take an idea from tech, an idea from marketing, ideas from a nursing home, ideas from somewhere else, those four ideas are going to merge into the idea baby that you're looking for, which is probably the power of the COO alliance is we have all these members from lots of industries from all over the world. We have members from 17 countries now that are sharing, collaborating on how they're leveraging AI, how they're leveraging hiring systems, how they're leveraging freelancers all over the world. Twenty years ago when we were building Internet companies, we had to hire people based in our city. Now we can hire people based all over the world. And we should be. Frankly, the other thing I was Just.

Thinking about is this motif of what's changing for CEOs. This is a bit of a broad based question, I guess, but what does the Future hold for CEOs, do you think? And I'm thinking a little bit more in my tech field, I guess, but more generally, what do you see it evolving towards as we kind of head off here?

Well, I think I see you're doing it with your COO community based in the uk. There was an article written in Fortune magazine around six or seven years ago and it was called the Rise of the COO Group. And I think that we're starting to see that we are getting, you know, Sheryl Sandberg was clearly the queen bee of all the coos. We're starting to see that there is a rise of these communities. There is a rise. And if COOs are learning from each other, collaborating with each other, sharing resources, building the network, I think that's something that's coming for coos. You know, the COO alliance and the COO operating groups, the op spot are all great places for us to collaborate and grow. Like the entrepreneurs did with YPO and with EO and with Vistage and with all these amazing groups for entrepreneurs all over the world. I think we're starting to see that that's going to be exciting for COOs.

This is something that I guess is close to my heart and I'm genuinely curious. You've been a COO and that's been your career, but you are now an entrepreneurial CEO. How has that transition been and did you have what it took and how did you find out you had what it took?

I'm a very unique human. I was an entrepreneur. At seven years old, I ran 12 or 13 different entrepreneurial companies. By the time I was 18, when I was 20 years old, I had 12 full time employees working in a company that I started. So I was an entrepreneur. I grew up in an entrepreneurial family. The first real company that I ran when I was in university was a franchise and I was so nervous of failing that I memorized a 350 page operating manual. So I was an entrepreneur that learned that there were systems and playbooks in place and if I ran the Playbooks, I'd be successful. And those playbooks allowed me to scale. I then started working at the head office of this company, it was called College Pro Painters. That was back when I hired Kimbal Musk. Elon's younger brother worked for me back in 1993. Peter Reeve, who was his cousin who built SolarCity, I hired and trained Peter as well. I was a very entrepreneurial kind of operator because of the franchising world that I grew up in. Then I built a couple of franchise companies as a co founder or a coo. But I was really in an entrepreneurial organization operating as that coo. But operating with these entrepreneurial playbooks I learned at college, propainters, even building one, 800 got junk. Brian was my best friend before I joined him. He was my best man at my wedding before I started working for him. So he and I kind of built this thing together. But I was the COO of a very fast growing entrepreneurial company. When it hit 3,000 people, I was pulling my hair out. I was literally, I was way over my skis. I hit my glass ceiling at 60 million and I was bumping it hard at 100 million. So when I left the company and Brian replaced me with the former president of Starbucks usa, Lonnie came in and said, what a cute little business. And I was like, it's so big, right? So I'm much more of an entrepreneurial COO than I am a traditional coo. I would die in a corporate environment. I wouldn't be able to make it in a corporate COO kind of world because I'm too entrepreneurial. So the transition for me to be an entrepreneur was easy because I've always been an entrepreneur. I've really been that. But I've learned a lot of the OCD systems, the playbooks and the systems to counter my ADD and bipolar nature of being an entrepreneur. But yeah, I'm not the traditional COO type for sure.

My follow on question is, for so many COOs, the obvious next step is to become a CEO.

No, that's what's really interesting is most CEO. Most COOs don't have the entrepreneurial DNA, nor do they have the desire to be the CEO. Sheryl Sandberg as an example, never wanted to go off and run her own company. The natural progression for a COO is really not to be a CEO. Most COOs, it's to run a bigger company or it's to be a COO of a better brand or to be a COO of a different type of industry. I don't know the exact percentage, but maybe 5% or less have the DNA to go off and become the entrepreneurial CEO. We've seen a few of our members have gone off to do it, but they were usually founding employees who were in the integrator role. So I think of like Zach Morrison who built Tenuity. It used to be called Elite SEM. He was a founding employee. He grew tinuity from like five employees up to three or 400 employees. And then his CEO moved into chairman and Zach moved from CEO into CEO. But he was really there from the day one as like a co founder. Matt Wool, who built Acceleration Partners. Same thing, you know, there from very early and now helping at scale. So it's very rare that most COOs want to or have the skills or the traits to be a CEO. Most guys don't want to be women. Most women don't want to be guys. There's a few that do and they go transgender. But most just don't want to do it right. Like, well, that is clearly it would be really cool to have a baby. It would be really cool to. But like, I didn't want it bad enough to like, you know, but I wonder what it would be like to be a woman and have a child, but not enough that I wanted to go do that. I don't know. It's a weird analogy, but it feels true to me.

I'm not sure I'm thinking about the analogy related to myself. I'm not sure if it works exactly, but I would say this. So I think I'm in this 5% category, which is, you know, I'm looking for a good CEO role to kind of as my natural transitional step. I've been a CEO for seven years now across two different companies. It's been fabulous. I've loved the roles. It's been tremendously fun and enjoyable and I've learned a tremendous amount as well. So I guess for myself in this respect, what would happen if Brandon ran an organization kind of like in the style that I thought was best? Because ultimately, as we all know, you know, at the end of the day, the decision maker, the final decision maker, is the CEO for organizations. So if I was planted as a CEO unencumbered, as it were, you know, what would then happen to that organization? So I feel like that experiment is worth running.

It is. And Greg, were you a COO for these two companies? Were they entrepreneurial companies that you were a COO of?

They were scale ups. So they're both founder led organizations.

Right. So when you're a COO of a founder led scale up organization, it is a fairly natural progression to want to go do that on your own. But you probably have a lot of that entrepreneurial DNA that a COO doesn't typically have. So that's where it does kind of make sense. Right. But if you're the COO of a mature company and you're growing it from mature company to the next level. It's just a different DNA. The things that COOs have to get better at is delegating, growing people and not overseeing it, letting other people oversee it. Right. We have to get better at not focusing on the monthly plan and the weekly numbers. We have to get better at staying focused on the three year vision, the culture, the bhag, the core purpose. We have to be better at looking at what's happening with the economy and the market and the trends and plugging ourselves into other communities so that we're learning from osmosis and, and then communicating back to the team. Most COOs tend to get fairly focused on the playbooks and the systems and that matters, but it needs to be other people that are doing it for us.

Again, very off your career. Sorry. Yeah, like it'll hold you back if you can't let go.

My brother and his wife have been married for 25 years now and they have what they call blue jobs and pink jobs. They decided that blue and pink doesn't really meant men and female anymore. They're just like, there's a series, there's a list. And like, because he actually likes doing dishes, she likes doing, you know, cutting the grass. I'll make that as an example. So what was traditionally a blue or pink job? They said that they just decided there's differences. If you're going to be a COO moving into the CEO role, you have to get people to do the old COO tasks that you're used to doing. And you have to start doing the stuff that isn't natural, that sometimes felt frivolous. Like, it used to drive me crazy, frankly, that Brian would walk around 1-800-got junk or in the later days because we were in so much square foot on a scooter, he would zip around the office dressed in like a Halloween costume on a random Thursday in the summer. I'm like, what are you doing? Actually, he was doing exactly what he needed to be doing. He needed to stir the Kool Aid, he needed to get the energy going, he needed to be the chief energizing officer. And I was so focused on the plan or the numbers or the systems that I sometimes missed that bigger purpose. And I think that's the hard part for COOs to make that traditional. That leap is you are going to start doing the pink jobs instead of the blue jobs, or you're going to start doing the blue jobs instead of the pink jobs and you have to be able to release that stuff because you will never scale it if you try to do both.

I love that, and it's very fascinating and led me into, like. My final question, which was from when you were speaking earlier around the CEO being the best leader in the organization or the strongest leader for all the different reasons, begs the question, what's the CEO's job? And I think you've somewhat answered it. But I'd love a little bit more on how to make it clear what a COO and a CEO do so that there's not stepping on toes and threats and the rest of the problems the relationship can have.

I like CEOs to never have more than four or five direct reports because they also have legal, they have the board, and they have culture as kind of direct reports that they have to oversee. CEOs have to care about vision and culture and kind of the recruiting and trends. They have to make sure that they ask the leadership questions. So an example of a great leadership question. I was being groomed by the COO at Starbucks. So Greg Johnson was growing me, mentoring me over a period of two years. And he said he got a phone call one day from the CEO, from Howard Schultz, the founder. And Howard said, you know, why is the letter B on this specific sign on a specific location in Seattle not working? And Greg said, I don't care. The question you need to ask me is, what system do we have in place to ensure that every letter on every sign at all of our locations are always working? So that's the leadership question. CEOs have to ask the leadership questions. So even though we notice that, like, why is that thing broken? The question is, what system is missing that allowed that thing to be broken, or what system is broken that allowed that thing to be broken? So we need to notice the things. Entrepreneurs tend to notice everything because of our add. We see all the problems, we see all the opportunities, but we need to ask the leadership question about what's the missing system? Or what's the opportunity versus why is that one thing doing what it's doing? It's not why do we run out of money? Or it's not, why do we not have enough, whatever, how do we ever hire that person? Or why are we firing? It's what system was missing. We got to ask those questions and then let the COO figure out what systems to put in place to fix those.

Of course, if our listeners could only remember and take away one thing from our conversation, what would that be?

It's that none of this actually matters, that at the end of the day, this is just what we do to make money. It's just what our employees are doing to make money. None of us are getting out of this alive. What we have to do as leaders, if we care about our employees, if we actually care about them as humans, if we care about their problems, their insecurities, their fears, their home life, and not attach it to anything. But if we actually care, they'll go through brick walls for us to build the company. And that's kind of the lesson that I always want people to remember, is that we tend to focus on all the stuff, but what really matters is the people.