The COO's Role in Maintaining Company Culture

The CEO needs to look at their skills, at their weaknesses, at their passions, at what drains them. They have to think about their core values. They have to think about where they're really, really strong and what type of company they're looking for and kind of identify that. And once they have a lot of clarity around themselves and the kind of business then they can look for the kind of leader that they're going to have to mesh with. I was actually groomed as an entrepreneur. I grew up in an entrepreneurial family. My dad ran his own company. Both sets of grandparents raised their own companies. And my brother, my sister and myself have all run our own businesses for the last 20 to 25 years. So really kind of grew up in that entrepreneurial world. However, a couple of my entrepreneurial ventures. I played the second in command role. I first did it with a collision repair chain where I was the second in command for what now became known as Gerber Auto Collision in the United States and was Boyd Auto Body in Canada. It's now the largest collision repair chain in the world. And I was the second in command for the franchising group. I'd been kind of the de facto second command to open up the west coast United States for a large house painting company. It was ended up being called College Pro Painters. I was the president of a private currency company back in the late 90s and reported to the CEO on that one. And then we sold that company. And then later I became the second in command to my best friend's company. He was running a business called the Rubbish Boys. Changing the name over to 1-800-GETJUNK and I joined him as employee number 14, became the chief operating officer and when I left the company we had 3100 employees systemal wide. We'd gone from 2 million to 106 million in revenue. Ended up in 4 countries, 330 cities and we'd ranked as the number 2 company in Canada to work for. But I left there 17 years ago. So it's funny that we people keep asking the story of what happened so long ago. Since then I've now been paid to speak in 28 countries. Actually next week will be country number 29. I've written six books all on business to help entrepreneurs. And then I started an organization called the COO alliance which is this large community of second in commands globally who, you know, there's so many groups for entrepreneurs. We want to grow their second in command to help them grow companies. And then they also launched a course called Invest in your leaders which are all the skills that every manager and a leader needs to excel in their job so well, the big one is to know yourself, right? It's kind of like if you're looking for a spouse, it's really important to know who you are as a person to then be able to figure out what kind of a spouse or a partner is going to match you. It's almost why the logo for my book was the yin and yang logo. You're really looking for that perfect fit. So it's understanding yourself as an entrepreneur. It's understanding your company's core values. It's understanding the trajectory that your company's on and understanding really what needs to get done. There's really different types of CEOs. However great I was as a second in command for 1-800-got junk. And to match Brian as the CEO, I would probably be a horrible COO for your company. I may not match the size of company or the industry or the projects that you're working on, or maybe even behavioral traits might be a little bit off. Don't know. So it's just really different, that kind of a role. But it really starts with understanding yourself and the company and the trajectory you're on. I would say there's only really three reasons we even start a company. One is to kind of have that feeling of accomplishment, right? Put the flag in the ground or stake in the ground we did something. Second is to give us money. And the third is to give us free time. We often forget about the free time and we often just get busier and busier. And the bigger we build it, the more busy we're getting running a company. And sometimes we hire that second command to free us up and to give us some of our life back and to, you know, allow us to work in our unique ability. Those tend to be the people that waited right until the very end. The ones who are a little bit more strategic see as more as an opportunity to leverage themselves to work in their unique ability to work on the business instead of in the business, to work on the areas of business that feed them with energy and maybe to delegate to almost like a partner or even to have kind of that mentoring kind of role, maybe someone who's been there before. That was very much the role that I played at 1-800-got junk. I came in and for the first five years, I was telling Brian what we were going to do. I showed Brian what needed to get done. He'd never done it before. Only when we got to about the 60, 70 million mark, did the business start to get big for me, you're kind of looking to leverage some of that stuff. So the real questions that I guess the entrepreneur wants to ask is if I was to hire someone, what could I give them that would free me up? What could I work on? What would that leverage look like? Can I generate maybe four times that person's compensation in additional gross margin because I now have them on board? Can they help grow people and grow systems and grow automation? So there's really lots of different reasons you're going to put one in place. I've seen it happen where, where CEOs literally dump everything on the COO's plate. They kind of abdicate instead of delegate. They're so relieved to have somebody in and that causes a disaster. So sometimes it's the holding on for so long and not sure what to do. Other times you just dump it all on. The key is to sit back, both of you and say, okay, what are your strengths? What do you love? What do you hate? What are your weaknesses? What are your strengths? What do you love? What do you hate? What are your weaknesses? And kind of divide and conquer a little bit and then have very clear roles and responsibilities, very clear metrics, very clear communication channels, and really strong clarity around what the new org chart and roles and responsibilities and reporting structures look like. That's the key starting point. And then it's about having time in your calendar to stay in sync so that you don't interfere with each other. The hard part for the entrepreneurial CEO, the one who's really been that founder led company they're used to having, doing everything, they've done everything before, they've led every business area, they started every business area. So it's hard to not meddle in some of that stuff. But the more time that you spend in that other person's swim lanes, you're also causing ripple effects that you're not really intending to clean up. So sometimes even though there's a benefit from you getting involved, there's the unintended consequences of you getting involved too. So it's usually better to stay out of the way, but stay in sync with some communication channels. It's almost like if the husband and wife are raising a family and the husband knows that today's the wife's day to go pick up the kids, but the husband's like, yeah, I think I'll go do it anyway, what's the point? Now you got two people with two cars, both at the school, the husband picks up the kids and the wife's running around thinking somebody's kidnapped her children because you're not doing your job or you didn't communicate, you didn't stay in your lane. Those things happen inside of a business every single day. And again, that, that's this. That's some of the reasons why we started the CEO alliance and why I've coached CEOs and CEOs is to help them understand the communication channels, the meetings that they need to have, how to stay in sync, how to get away from the rest of the leadership team, to have the good, healthy discussions and debate, how the COO can turn to the CEO and say, hey, you're going a little crazy. You're moving too fast, you're too random, you're all over the place. Sometimes we need to be the leash to the CEO dragon or the brakes to the entrepreneur's gas without slowing them down too much, but just enough to save them from themselves. Sometimes it's a lot of communication, but it's all of that. Communication helps you go fast. If I go back to each of the roles at College Pro Painters, I was given P and L responsibility and I had to go and open up Washington, Oregon and Idaho for the company. And I was employee number one. And 12 months later, I had 220 employees and we'd done a million dollars in revenue in the first year. So it was. That was, you know, 1993. That was very much as an a COO kind of hat, where the CEO said the vision and I just went in and executed with enough autonomy and P and L responsibility and I didn't have to ask for permission on everything because we just needed to go 100 miles an hour. On the collision repair chain, it was very similar. My two partners were running the corporate operations. I led the franchise operations. I decided what we were going to do with it. I came in with ideas around strategy and ideas around plans, ideas around margin and gross revenue that they bought into, or we talk about it and then I would go and execute on. So, yeah, it just depends. The weird thing about the second command role, that's why I called my book the second in command is they're very different company to company. If you're the head of marketing, you could probably be the head of marketing for every company in your industry or for every company that's about your size. If you're the head of IT or the head of finance or the head of HR. Same thing. If you're the COO, you can't because you have to match the CEO's skills, the CEO's weaknesses, the CEO's behavioral traits, the size of the organization, and then it's all about the weird responsibilities based on what the CEO wants reporting to them. I would say that 30% of our COO alliance members do not have finance reporting to them, while 70% do. 30% don't have it, 70% do, 30% don't have sales, 70% do. It's really this weird mix. So you could have the same title with completely different roles and responsibilities. And then even though I was The COO at 1,800-got junk from 2 million to 106 million, which was the perfect zone for me. Their current COO, who's been there for 13 years, has taken them to 600 million in revenue. He would have been horrible as their COO for the first six years. The funny thing is we've known each other for 37 years. We started a fraternity together in Ottawa, Canada in 1987. So Eric is very much more of the corporate. The process, the planning, very inward facing, doesn't do speaking events, doesn't talk to the press, isn't kind of all focused on culture. I was a very outward facing, biz, dev, promotion, revenue generation, momentum creates momentum machine. So even though we have to match the CEO and the skills and traits and we do those the same, the size of the company and the season that the company was in, we needed a different CEO. It's a really peculiar role to hire for. I've always said that the CEO should only have three or four direct reports because you also have the culture of the organization. It's kind of the heartbeat. You've also got your board and your advisory side. Then you also have legal and compliance. There's these other things that the CEO needs to think about. Succession. So they really have to spend time being strategic and spend time thinking and spend time making sure that we're all working on the right stuff. But if the CEO is so busy operating the business and overseeing areas, they have no time to actually think foreign. The COO needs to look at their skills, at their weaknesses, at their passions, at what drains them. They have to think about their core values. They have to think about where they're really, really strong and what type of company they're looking for and kind of identify that. And once they have a lot of clarity around themselves and the kind of business, then they can look for the kind of leader that they're going to have to mesh with. This is your business spouse. This is kind of like getting married. So you do want to spend time talking to them, talking to their employees, talking to their advisors, talking to suppliers, and really doing your interview to really kind of suss out whether there's going to be a good fit. And I think it's even having those, those brutal facts discussions in the early days. Every entrepreneurial CEO that's worth anything is starving for someone to tell them the truth. The CEO needs to be the truth teller to the CEO. So you need to make sure that you're meshing with the person who wants to listen to you, wants to answer questions, wants to give you time, wants to stay in sync. You really have to like each other. It really has to feel like that great energy. If it's feeling forced in any way at the very beginning, it is never going to work. You know, a great thing that a CEO can do is to turn to their CEO and say, hey, what can I do to support you better? What's something that you've been wanting to say to me that you haven't said yet? Hit me with it. And really, really, it's kind of like being vulnerable, right? Vulnerability builds trust and trust builds more vulnerability. It's that, that vulnerability and trust loop that the more vulnerable and open we are as a CEO and searching for feedback, searching for truth, you're going to build a really strong relationship with that coo and then vice versa. But the key is for the for the CEO to shine the spotlight on the CEO to make them look good, and for the CEO to shine the spotlight on the CEO to make them. Well. One of the big ones is we're so busy doing work. And the reality is our job is to get results through people. Our job is to grow leaders. Our job is to grow people, to grow their skills, to grow their confidence, to grow their connections. It's not to do work. And I often see coos bogged down saying, well, I don't have anyone to delegate this to, so I have to do it. Nope, pick someone, delegate it to that person, and then grow their skills, grow their confidence, grow their connections so they can get it done. And go back and look at your to do list and delegate the next thing. And delegate the next thing. The COO's job is to delegate everything and spend their time growing the skills, confidence and connections of their people. Number two is not staying in sync with the CEO. The CEO needs to stay in sync with the vision of the CEO, the culture, the core values, and make sure the CEO is very clear on the operational plans and the budgets and the cash flow and the swot. So the CEO understands kind of where we're going and how we're getting there and what the roadblocks are. And the CEO is really clear on where the CEO wants to take us. That real true symbiotic relationship is critical. And I think, lastly, it'd be not taking care of themselves. I think often the COO takes on more, takes on more, takes on more, and they forget that they're a racehorse. Right. And they have to actually take care of themselves, like that thoroughbred. They can't burn themselves out. They can't overwork themselves, because then they're in kind of diminishing returns.