The Wrong COO Will Kill Your Momentum

All right, I'm excited to bring you some more content from my book the Second in Command. We're going to talk about what the point of a COO is. Why would you even bother bringing a CO into the organization? What are they going to do when they're working with you inside of the organization? What kind of leverage you're going to get? We're going to go deep into that. You're going to love this episode. This will be one that you're going to want to share with your tribe as well. We'll see you on the inside. What's the point of a coo? A COO makes things happen. They are the glue that holds all internal departments and processes together. COOs take a CEO's vision and find a way to make it a reality. Alan Joskowitz, COO Alliance Member and COO of Dynamic Marketing, Inc. We've seen that a COO can occupy a variety of spaces and serve a range of functions. There's no single template for what makes an effective COO other than their fit with the CEO. And every CEO is different. Take it from me. Through the COO alliance and my Second in Command podcast, I've come into contact with hundreds of coos with a wide range of skill sets in a wide variety of businesses. No matter how strong they are in their particular role, they all have one thing in common. They would likely do a terrible job running 90% of the other companies of more than 250 podcast guests each might be suitable to run, say, 20 of the other companies represented and completely unsuitable to run the rest. The most requested guest to have on the Second Command podcast is Sheryl Sandberg, who is CEO of Facebook for 15 years. Everyone wants to learn from her and learn about the incredibly powerful relationship she built with the CEO and founder, Mark Zuckerberg. There's no guarantee things would have gone so well with a different COO. That's not to say that COOs don't have certain things in common. Good COOs have the ability to slow down, think strategically, grow and align people and focus on the critical few things rather than the important many. The true power of a two in a box comes when the COO matches those traits with the unique personality of the CEO and sometimes also with industry specific expertise. You might still be wondering, what can a COO do? For me, the answer is pretty simple. They can do anything you want them to do. You just need to know what that is and select your second in command accordingly. Inward versus Outward Facing some CEOs are so outward facing they become integrally tied to the marketing of the brand as Steve Jobs did at Apple or Elon Musk at Tesla. The general public is almost as familiar with the CEO's name as with the product. In those cases, the right COO is likely more inward facing and focused on the behind the scenes operations. There's no reason for them ever to become known to the public. In contrast, other CEOs are inward facing. They're like the level five leaders Jim Collins describes in Good to Great. Humble, driven, focused. A combination that allows them to be inspirations for their colleagues. Rather than engaging with marketing and branding, they might specialize in engineering or finance and lack any desire to engage with the media. This type of CEO can build a highly recognized brand without their name becoming widely known. In such a situation, a public facing COO would make sense to serve as the face of the company in the media and the spokesperson of the business world. Ben and Jerry's provides a great example of an outward facing coo. The ice cream maker is run by Ben Cohen and Jerry Greenfield respectively. Inward and outward facing. Their powerful yin and yang has helped build and project a brand that is recognized around the world. At Shopify, Harley Finkelstein, who went from COO to president, is the face of marketing, does many of the media interviews and runs business development. CEO Tobias Lutke is inward facing, spending his time on product engineering and finance. At 1-800-God chunk, I was a highly outward facing COO focused on franchise sales, marketing, talking to the press and doing speaking events. I was part of the amplification of the message in the brand which leveraged my gifts and was appropriate for the growth phase, which brought with it a lot of built in pr. As I explained in my book Free pr, I understood how publicity worked. That's not always the skill of the coo, but it was highly useful. At the phase of business growth, Brian and I became a public duo. We'd sometimes give speaking events in which we took turns throughout a whole talk, being on stage at the same time. By contrast, Eric Church has now held my former role for a decade and most people have never heard of him. He built the company from 100 million to 400 million, but he doesn't do speaking events on behalf of the brand or engage on social media. He's inward focused on operational and fantastic at what he does. The key again is that the COO serves as the CEO's counterpart, whether that means being in the back room or facing the media. It's similar to two spouses going to a cocktail party with one an extrovert and one more introverted. They both have amazing discussions, but they approach socializing differently and they're more effective together than individually. While it's highly unusual for the COO to be the external face of the company, beyond playing a role in marketing and communications, they're almost always the internal face of the company and the top level manager on the org chart. More often than not, the CEO will have very few or no direct reports, or only the COO will report to them. Once you hire a coo, you don't need to supervise more leaders than him or her if you don't want to Coordination versus Subject Matter Expertise COO alliance member Rachel Pachevas of Ann Marie Skincare likens the COO role to being a quarterback. All she does is call the plays and pass the ball and trust that everyone else is fulfilling their own roles. The COO can't do everything, and hiring a new second in command isn't going to replace subject matter expertise. A COO might focus on finance, it, sales and marketing operations, or business areas, but as the company scales, those areas still need their own heads. The exact configuration depends on the individual bandwidth and the maturity of the company. A COO leading seven business areas can be an outstanding marketer, but they'll still likely need to appoint a head of marketing too. Subject matter expertise is less important in a COO than an adaptable personality and the ability to talk to department areas and call the plays without sounding like a moron. Department heads have to be experts, but they don't have to understand others. COOs have to be chameleons who understand everyone. They don't have to be experts, they just need to know how to hire experts. The head of IT is likely the smartest person in it, and the CFO is likely the smartest person in finance. The only disciplines the COO is likely the smartest person in are communications, people, skills and leadership. They need the competence to ask the right questions from a leadership team perspective, which systems are missing or broken, and how can the company change to collaborate better or remove obstacles? The COO can lean on the Socratic method. They need enough business savvy to know what questions to ask, to get the right answers, to work with their people, and to bring out the best in others by growing their skills and confidence. All of that involves removing obstacles between business areas, aligning those business areas, fixing the areas that are broken, and bringing out the best in each one. By adding the right systems, people and resources, the COO must be able to speak different languages, but doesn't have to be fluent in any of them. When I oversaw product development at 1,800 got junk I I would talk to the IT team about what software they needed to build. It didn't matter that I understood shit of what they said most of the time as long as I grasped enough to ask the right questions. The same with finance. Figures are not my inherent strength though. I still had to understand the P and L budgets and cash flow statements, but not so much the balance sheet. A COO must understand how every department speaks and translate between them. That's how they ensure alignment, collaboration and necessary cross departmental discussions in advance of taking action. The COO is part matchmaker and part cheerleader and ensures people in different departments have the necessary facts about what others are doing. It's a balance. The COO needs results, but they also have to be able to listen and build confidence. If they're saying no to suggestions and making all the decisions themselves, they're not building the confidence of their team to make decisions, come up with the right answers, develop competency and skill. No one can develop if they're not allowed to do anything for themselves. Empowerment, not rescue. The COO's job is not to fix the problems or answer all the questions, but rather to grow others so they can fix the problems and they can answer the questions. By focusing on growing people instead of fixing problems directly, the COO can advance the organization strategically rather than becoming just another firefighter. The purpose of the COO taking work from a swamped CEO is not to simply have a swamped coo. One of my favorite comparisons is with the role of a parent. A parent's job is not to cook every meal or do all the laundry for their children, but rather to teach them how to do those tasks for themselves so they have the self sufficiency when they reach adulthood. In the same way, a good COO hovers above the trenches and helps coordinate what's happening down there. Rather than getting sucked into the mud by trying to do employees work for them, growing others skills, competence and confidence is a much more effective long term strategy. I could go on here about giving someone a fish and teaching them to fish, but you get the point. I've spoken to many COOs on the Second Command podcast about how they oversee so many areas and they essentially all say the same thing. They don't. They don't even try to be on top of everything that everyone else is doing. Their role is to grow and align people who will oversee different areas and improve collaboration between them, a COO who gets involved in every decision for every business area will soon be overwhelmed. They'll be incapacitated. It's impossible for one person to even read enough emails to keep on top of every business area, let alone make any decisions. But that's not their job. Their job is to lead people to do rather than doing directly. Another role of the COO is to be able to find the greatest point of leverage in a messy situation. At one point, at 1-800-got junk, the head of product development was working with the head of it. They fought constantly with lots of cross cultural issues and a large dollop of misogyny thrown in. Communication finally broke down when one said to the other, you're just like my mother. Yep, that would do it. I had to swoop in to help teach them how to communicate effectively. But I made damn sure I didn't take over any work from either of them. They had to learn to disagree, but still collaborate and have a basic level of respect and affinity for each other. I was a coach, not a substitute worker. It's easy sometimes to forget that the COO isn't just an execution expert, they're also a people expert. All COOs possess this unique skill set. Processes and people. The nuts and bolts of getting shit done combined with the EQ and soft skills that most shit kickers don't begin to understand. Systems and shortcuts. Because the COO is an execution expert, they need to understand systems. A good coo, particularly someone from outside of business, can see shortcuts, embrace the new, have the ability to learn quickly and figure out how to hack the system. Seeing shortcuts was one of my strengths because I found it easy to dumb everything down to the lowest common denominator. Momentum creates momentum. So I always saw my role as being about getting things done rather than making them perfect. That way we could move on to the next thing. I had to find the easiest ways to get work done because we couldn't have the smartest. Most senior people working on every project. COOs have to be quick thinkers who can read between the lines to signpost potential snags in the underlying systems. One of my mentors, Greg Johnson, tells a story about when he was being groomed as the COO and senior exec at Starbucks. The CEO called him one day about a sign at a Starbucks location in Seattle with a burned out letter B. The CEO didn't ask Greg why the letter wasn't working. He didn't care because that wasn't a leadership question. The key question and the one the CEO asked Greg was what system could be put in place to ensure that every letter on every sign at all 14,000 Starbucks locations were always working. A good COO knows the value of the old business saying by Michael Gerber who wrote the E Myth People don't fail. Systems fail. The CEO needs to be able to rely on the COO to keep their eye on leadership questions without being distracted. It's made easier if the COO can identify broken or missing systems and create a no blame environment in which people feel they are allowed to fail as long as they stay focused on the system solution. A COO can also complement the CEO's vision by looking beyond the business to the environment in which it operates. The customer, the supplier, the market, the economy. They look at the horizon and try to predict what lies beyond. And they feed that information into the company strategy at one point at 1-800-got junk. The Canadian dollar was about 62 cents to the US dollar. I went to the team and said that I was worried about the Canadian dollar getting stronger. They didn't see a problem. Six months later it was at 70 cents to the US dollar. I said I was worried about going to par. A year later it reached 78 cents and people started listening to me. We implemented forward rate contracts and hedging strategies and eventually the Canadian dollar was surpassing the US dollar and was worth $1.07. We would have lost $100,000 each year for every penny it went up had I not been keeping an eye on macroeconomic forces. Macroeconomics wasn't my job. It wasn't part of my brief. But it was part of my brief to think about finance, operations and the customers in the market. That was the sort of integration I could bring to the table as coo. Strategy and people go closely together. It's only by understanding people that a COO can fix strategy and find shortcuts. Take the franchise model. There are obviously different levels of franchise partners. Some have a background in management consulting or running businesses, while others have nothing like that business competency. But they all need to be able to execute the business system. The same goes for internal employees. My goal was to put systems in place that I could write on a post it note so that the worst employee in the worst market in the worst conditions could still execute them. If a franchisee could follow a system in Buffalo in a snowstorm in February with a temporary employee, then I knew we had the right system. Anything that required an MBA to figure out was too complicated. Complicated is easy. Simple is Hard insiders don't necessarily look for or see shortcuts, which is why CEOs find that hiring a COO from the outside can often bring a different perspective to the table. I was never the smartest person in the room unless the room was very small. But from school onward, I was always the student who figured out the shortcuts. I found the cheat sheets, I borrowed the lecture notes. I paid smart kids to do my assignments. I got the information I needed as efficiently as I could see. COOs need the same perspective on business systems. They need an integrated efficiency minded and scalable vision. They need to know where there might be an easier way to achieve the same goal. They need constructive laziness strategy versus tactics around 2,500 years ago, the Chinese general and military genius Sun Tzu wrote the Art of War. In it, he said strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before the defeat. In other words, you need both. In business, strategy and tactics should always complement each other. They're two sides of the same coin. In broad terms, the CEO is in charge of strategy and the COO is in charge of tactics. Both are useless without the other. One of the overriding goals of the COO is to provide high level support to the CEO. That doesn't mean that lower level tasks are always a waste of time. But like the CEO, the COO needs to keep a strategic view on culture, the direction of the board and risk management. For an entrepreneurial CEO who hires a COO as a first leadership team member especially, the COO can be a partner to brainstorm with at the time when the CEO is likely crying out for strategic advice. That also frees up other leaders to stay relatively focused on their business areas and get tactical. And the COO can periodically drop into the day to day execution of different business areas areas without becoming consumed or losing sight of the strategic level. If that makes a COO sound like something of a bipolar role, that's because it is strategy on one hand, day to day operations on the other. It's the COO's job to toggle between head up and head down. They need to make sure they're on the same page with your vivid vision. Then check how that strategy is being translated into the operational level. Then check back with the high level to see if anything has changed. It's like a whale coming up for air and then diving back down to feed. As a coo, make sure that you continuously recalibrate your role, your responsibilities and your area of focus with Your CEO. Just because your CEO told you here's what you should do, it doesn't mean he or she hasn't changed their mind. As CEO, it's key to allow the COO to move between those levels. They shouldn't be put into silos or used to put out fires in particular business areas. That's only going to harm strategy. Remember Greg Johnson's story of the broken Starbucks sign? Why something is broken is a tactical concern. The strategic concern is about what malfunctioning or missing system allowed the sign to become broken. If the CEO doesn't allow the COO to occupy the same strategic level, they'll end up pushing them down to the tactical level. And that will destroy the leverage that comes from two in a box. As CEO, you look outward, work with VCs, raise money and so on. You climb the mountain to see where the organization is going and the COO makes sure you get there. But they can't do that unless you take them up the mountain with you and let them share the view. Self Awareness and Personality One of the most powerful roles a COO can play in any company is a source of energy. Their energy creates more energy, but they have to appreciate their own power. If they bring excitement and optimism, those qualities will spread. If they come into a company with stressed out energy, they'll stress everyone else out. A demanding hard ass will get a response in kind. They shouldn't need to agonize over every word they say. If they do, the CEO has probably hired the wrong person. But they should be thoughtful and have a keen awareness that what they say impacts the whole organization more than anyone except the CEO and sometimes even more than them. Every action of the COO creates a butterfly effect throughout the whole business. One of my biggest mistakes as COO was an incident when I got upset with the entire team for wasting time in meetings. My point wasn't wrong. Shit, we were wasting hour after hour. But I blew up about it and the effects were even worse than the time wasting. It spread negative energy throughout the whole company for a month. It would have been better not saying anything. Best of all would have been to explain it in a different way that achieved a better result. And frankly, any result would have been better than what I achieved. That's a lesson that stuck with me. Emotional Maturity Whatever qualities a CEO needs from a COO and whatever role they want them to play in the business, one of the key requirements is emotional maturity. That doesn't emerge overnight, which is why the best fits for the second in command role tend to be more seasoned executives who have had time to gain wisdom and experience. That said, I've met some incredibly impressive younger coos who have an understanding beyond their years. Combining people and technology skills, for example. Experience can be overrated and not all experience is created equal. Some people who say they have 30 years experience actually have five years experience six times in a row. There's no reason a 27 year old with five years of experience and more technical knowledge couldn't be a better hire. The key to experience is nothing to do with years. It's to do with the maturity and wisdom that come from having seen situations before, from having hired and fired, built teams, been to board meetings and whatever else. Everything we've done before makes us better. But some people gain maturity and wisdom quicker I'm pretty relaxed when my son sets out to travel across the world on his own at the age of 18 because it had already flown a lot. At that age I would have found it impossible to do the same. But I trust him far more than I would have trusted my younger self because he's done it all before. That's the same trust. A CEO needs to be able to put in a COO that they've seen and done enough not to mistake a problem for a disaster or to see success as the same thing as perfection. There's no fixed age for being able to do that. Shaping Culture the culture of an organization emerges from the core values, core purpose, the vivid vision, the big hairy audacious goal, the people and the leadership skills you cultivate in your managers. The CEO decides on the culture of the company based on their vivid vision and the COO helps to make it a reality. The COO can positively steer and cultivate the culture because the best culture is created by design rather than default. The COO helps change the culture as needed based on the knowledge of what you want to build. They could fire five negative toxic people and change the culture overnight. They could build a culture of praise based on core values, implement awards and incorporate mantras like people don't fail, systems fail and create a positive no blame environment. They could apply accountability and goals. With Brian, I had room to exercise my entrepreneurial mindset in the COO role because the company was very new. I joined as the 14th employee. They didn't have all the answers and systems yet, so we had to wing it. There was no franchise training system, coaching system, sales system, marketing plan, marketing budget or metrics. There was nothing in place. We had to create it all. I had to be entrepreneurial enough to make IT up. Coos in early stage companies or entrepreneurial businesses often face a similar blank canvas. If systems don't exist, you'll need a COO who can create them and that's very different from being able to put them into place. Someone who can run a 200 person company isn't necessarily the best COO. To build a company from 10 to 200 people. Running a company of a thousand people needs different skills than growing a company from 100 to 1,000 people. In an entrepreneurial company, make sure to hire a COO with entrepreneurial chops. Working with the board and customers. The COO also has a role in communicating with the board. They bring operational clarity, a connection between the vision and the tactical discipline that the board appreciates, and often data based answers that an entrepreneurial CEO doesn't have. They can fill in the rest of the story the CEO leaves out. They also bring the board's questions and concerns back to the leadership team to get the work done. And they hold the business areas to a higher standard by ensuring details don't fall through the cracks. It's not the role of the COO to reach out to the board between board meetings. As CEO, on the other hand, you can reach out to the board whenever and however you want. The COO should not go directly to the board or any board member because it will cause triangulation with the CEO, which is dangerous. The COO is a participant, not an initiator. As coo, I helped craft board meeting agendas and steer the discussion topics. My teams prepared information for the board received in advance, but I never called meetings. I formed a bridge between the board and the execution while ensuring proper preparation so the CEO didn't gloss over any important areas. The COO's job is to make sure the CEO shows up at the meeting with information that is accurate without being scary. It goes without saying that the CEO and COO have to be united in front of the board. If you have differences, sort them out before you walk into the boardroom. It's also great for COOs to be involved directly with the customers to get a fuller picture of the business. They should talk to customers, suppliers and all stakeholders to understand what you're building and what the concerns are. Michael Dell used to call it reading the tea leaves. He got a fuller picture by reading all the customer comments. Sadly, too few leaders are truly connected to their customers or suppliers. Desirable qualities Identifying the right second in command can be a challenge as there are so few people who fit a role perfectly. There are, however some common qualities that you should expect any COO to be able to contribute toward an organization. Adaptability the first, not surprisingly, is adaptability. The COO needs to tailor their approach based on the culture of the organization rather than trying to adapt the culture to suit them. They need to absorb, project and become the guardian of that culture. They're the keeper of the flame. Time Management There will always be too much for a COO to do, so they need the ability to multitask and exercise. Excellent time management. Drive the COO is the motor that drives the whole business forward. They can't afford to rest on their achievements. When 1-800-got-JUNK, won an award and was on Oprah, I was less interested in the short term excitement than how we could use our appearance to get more coverage and ensure the call center was equipped to feel the greater influx of inquiries. But while Brian and the team understandably reveled in the success for a couple weeks, I made sure to leverage the excitement throughout the company in a way that would make a long term difference. Likability no one wants to work with people they don't like, and that's more true of a COO than virtually anyone else. A COO has to be likable as a person because that will give them a platform to facilitate the whole leadership team and steer the culture of the organization. They need to build consensus within the business as well as deal with suppliers, customers and the board. Likability was one of my core strengths. I stuck to my small town values from growing up in Northern Ontario, Canada, which made it easier to build relationships with all sorts of people. Honesty Honesty was another of my strengths because I've always been open and frank. Part of the COO's role, as I saw it, was to say what everybody else was thinking but didn't have the confidence to say. A COO with a filter is of limited help. They should be respectful and discreet, of course, but they shouldn't have to censor their communication. The more guarded they are, the less others will trust them. Say what you mean and mean what you say. It's not rocket science. Communication. We've all worked with leaders who make us roll our eyes or want to duck out of sight when the COO walks by. People should feel excited to spend time with them rather than trying to avoid them. That's a key part of the COO bringing drive to the business. And it all comes down to communication. When I ask COOs what advice they'd give to their 22 year old selves. Matt Woll COO alliance member and president of Acceleration Partners said, listen before you talk. Always. It's number one. It's not as simple as being able to communicate well. A COO needs to be able to write messages or pass on verbal instructions that are easily accessible and that no one can misunderstand, of course. But they also have to inspire people. Every word they write or say should help raise the energy throughout the business at all times. Diplomacy Dropping a COO into an organization could potentially cause huge upheaval. So a COO needs the ability to function as a diplomat from day one, creating harmony in relationships to lay the foundation for when the inevitable healthy conflict occurs. There's a balance in getting all the relevant opinions on the table while also ensuring people like and respect each other. The COO needs to achieve that harmony while also coming into an already established organization and leading senior people who might have wanted their job or or resent no longer reporting to the CEO. The ability to build trust and cultivate personal respect is essential from day one. There will be times when the COO needs to make unpopular decisions for the greater good of the business. If they say what they mean and mean what they say, if they engage in healthy debate and stay focused on the benefit of the team, the vision, the core values, and the health of the company, it will make it easier for others to understand that they aren't arguing or pissing people off for fun, but rather to keep everyone moving forward. Steadiness I've already explained that the stereotype of the crazy visionary CEO is becoming less common, but hell, let's not kid ourselves that it doesn't exist. A COO shouldn't share that same crazy energy. They should avoid it at all times. They need to keep on an even keel. So what if it makes people think they're a little boring? In reality, they're just more focused. Entrepreneurialism hellosign COO Whitney Bock's advice to her 22 year old self would be don't try to plan too hard because you may totally miss the best ever that could have happened to you. Be opportunistic. Whitney encapsulates the entrepreneurial nature of a good coo. They need to be aligned with your vision and focused on how to get there, while also being entrepreneurial enough to bob and weave and spot opportunities that fit the vision, provided they keep in mind their overall direction. A good COO can spot something that wasn't necessarily on the plan, pick it up and run with it. If the COO is too rigid with the plan, they'll miss opportunities. On the other hand, entrepreneurs tend to jump from opportunity to opportunity and trust their intuition, which is an approach that won't scale. The COO can't become simply the enforcer of the plan because forcing people won't help them scale or bolster their cause. The COO needs discipline without sacrificing flexibility or losing sight of the mandate to grow the confidence and skills of the people. Work needs to get done while growing confidence along the way. Coaching the COO shouldn't be a go to referee just as parents should teach their kids to work out their problems rather than mandating solutions. If the COO becomes a referee in a business, they'll constantly find themselves involved in conflict, which sets them up for failure. They need instead to focus on coaching, moderating, facilitating discussions and growing skills so that people can fend for themselves. At the end of the day, the COO can't moderate discussions. They have other work to do. You catch more flies with honey. It's powerful for leaders to remember. When you tell people what to do, you hurt the energy and the organization. But if you can sell them on it, align them with it and get them excited about it, you'll get the same or better result with better energy availability. The COO needs to be available to listen to people, to help them solve their own problems, though not to serve as a rescuer or dumping ground. Having an open door means both allowing people to come to them and and also being able to go out and seek feedback from others in the company. A COO has much more interaction with the day to day than a CEO. As CEO, particularly as the company scales, you won't have all the tactical answers. You should still connect with people through the town halls and skip level meetings. A strategy I'll discuss in more detail later. But it's the COO's role to be more available to coach and assist with problem solving. The COO is a highly visible role within an organization. So you need to hire someone who can command respect within the company with Level 5 leadership style as a humble cultural cheerleader, an internal champion who will help grow people. They need to have experience but also check their ego at the door. When I came into 1-800-got- junk, people respected my experience because I'd built other companies before. They asked me what I'd done elsewhere and deferred to my deep domain expertise in franchising which no one else had. In sharing my experience, I was accessible to a fault. I had more of an open door than necessary. In fact, I had no private office my desk was out on the floor with everyone else. To maintain a connection with everyone in the company. I also spent a lot of time walking around and chatting with people. Written and narrated by Cameron Herold Text Copyright 2022 by Cameron Herald Production Copyright 2023 by Cameron Herald. All rights reserved. Thank you for listening.