The Differences Between CEOs and COOs | Cameron Herold (Podcast 379)

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 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 or 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. 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 is 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 CEO 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 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, I agree with you is we are part of an organization here called the COO Roundtable and it's in London and it's mostly tech coos. We were in a, in lie. In real life event, in a room together. 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 attributes, well there.

Remember something you said though, you also said that they were tech COOs.

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'd be like, oh, I'm a software guy. Fuck. I was neither. I didn't understand either. So in your niche or that industry of tech, most COOs would be 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.

You've spoken to, to Brandon's point earlier, thousands of COOs in your career. Do you see any commonalities or are we all different?

Yeah, 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 CEOs 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. 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. And 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 we know 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?

Wow, that's a great question, Ren. I don't know if I'm qualified to answer that one. I might opt out on that just because I'm not. I mean, we do have a lot of our members are tech and again, but I'm not from the tech space. 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. 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 COOs 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 CEOs need to actually focus on building real businesses now and hopefully be able to leverage the market 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. And I think it got real over the last two years where a lot of tech company CEOs and a lot of tech companies in general. 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 CEO'S need to be much better at getting their companies to profitability quickly. The most important reason you ever build a business is to have your free time, he said. Building a business is not about money. It's about having as much time as you want to do what you want, when you want. And if you focus on building a business for your free time, you'll make as much money as you could ever imagine because you'll delegate and you'll grow people.