Joe Polish and Cameron Herold discuss why a former Starbucks USA president failed as COO during the 2008 financial crisis, when the company's revenue dropped from $106M to $75M. They contrast this with a successful 12-year COO hire, Eric Church, and explain why most entrepreneurs lack basic training in hiring and delegation.
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So all these ripple effects started happening, but because he gave her so much rope, she hung herself.
What's a way to set up a COO to fail and make sure that you are really sort of disappointed and sort of jaded about the whole concept of hiring a COO?
Yeah, I'll talk. So when I left 1-800-got junk. Brian took 12 months to find my replacement. He brought in the former president of Starbucks USA to replace me. We both thought she'd be an incredible hire, but he abdicated instead of delegated. So he literally said, I need you to run this. Now. Be mindful that it was also in the 0809 financial crisis. He was stressed the company had gone from 106 million when I left down to 75 million. He would. He just wanted someone to run it. And he kind of walked away for a year. She was very corporate, very bureaucratic, didn't like franchising, didn't embrace the culture. So all these ripple effects started happening. But because he gave her so much rope, she hung herself. Proverbially. Right. And he also didn't onboard her and integrate her like he would have if he had the mindset and wasn't so burned out at the time. Right. So I think you can often hire the absolute best person, but if you don't integrate them into the core of your company, like the. The why, your history, your culture, your core values, your core purpose, your bhag, your vivid vision. If they don't truly understand how you got from where you are to where you are today, they're never going to be as successful as they could be. And we often are so glad that we have this person. We just let them start after a week instead of starting after three months.
So let's talk about Brian for a minute, though, because last time I interviewed Brian, it was pre pandemic, I think it was at 450 million a year in revenue. I interviewed Chip Wilson, the founder of Lululemon, the day before while I was up in Vancouver. And so after that bad hire or bad abdication of the hire, how did he regroup? I mean, what did he do in order to. Because he went from you doing it, then you left.
Yeah. And then he hired Eric. So Eric Church has been the COO now for 12 years. Strange that Eric and I actually have known each other since 1987. Eric and I started the very first fraternity in Ottawa, Canada, together. I was president year one, Eric was president year two. I'm a much more entrepreneurial coo. Eric is a very not Corporate, but a bigger business coo. He would have been horrible in the first six and a half years even though it's the same CEO, Brian, even though it's the same company, even though it's the same core values and culture. He was the right person from the 100ish million to the 450 million, but would have been horrible from the 2 million to 106 million as I would have been horrible from the 100 to the billion. You have to match the season that the company is in as well as the company culture, as well as the CEO themselves, as well as the projects and initiatives. Kind of the scorecard of the role. But Eric has been fantastic for the time that he was in. Likewise, even though he's been an unbelievable CEO for that company and I was for my sixnhap years. We would be horrible CEOs for 95% of my CEO alliance member companies because we don't match the CEO, we don't match the needs, we don't match the size, we don't match the industry. So it's a really tough role to play.
How often do you see companies that really have no clue what their culture is, but they do have a culture because everyone knows everyone and it seems to work. And I've also been in companies where, man, if you read the stuff, if you look at the values, you know, the things that could come from numerous consultants or team meetings, but something's really off.
The people are not aligned.
How important is that as it relates to bringing in a CEO? Because if you're going to have someone come in to be operations, it seems that there's a lot underneath the hood that needs to kind of be in place.
So if you think of in the United States, there's 15 million companies.
So if you, you mean companies in general?
Companies in general? 15 million. There's 1.5 million in Canada and there's 15 million in the U.S. and when.
You say company, what size are you referring to?
2 to 5 employees? Okay.
You're not talking single person operators because when that we're talking over 30 million.
Correct?
Yeah.
Okay. So. And if you're in that, in that zone that you're running a business, average means that there's 15 million companies worse than you or 7 1/2 million worse. 7 1/2 million better than you. So to be an average company, you can do none of this, right? Average. You just kind of show up to be in the top quartile of the top 25%. You're starting to live core Values, you're starting to live core purpose, you're starting to work in this stuff, but you're still not best of breed. When you're in the top five, top 2% of companies, that's when you're obsessed about things like the scaling up methodologies of Earn Harnish or the EOS traction methodologies, or the little obsession with core values and obsession with core purpose. An obsession with hiring the right people and growing people. But you're totally best of breed. But there's lots of companies out there that are just kind of in that average. The opportunity is for them is to again hire the right people, plug the right people in. But sometimes they have to trip and fall and learn from their failures that then they could do it better, right? They often won't learn by watching someone else until they have that need again.
This is my perspective because I can only see the world through my views and what I like and what I don't like. And also hang around a lot of crazy ass entrepreneurs and Genius Network, as you know, and some very, very successful entrepreneurs. And most of them, they not only dislike the whole thing of hiring people, they abhor it, they hate it.
Explained, most of them have never had any training in it. So imagine sending a 10 year old kid off to play little league baseball for the first time without teaching them how to hold a bat, without teaching them how to hold a catch a ball and toss the ball. The kid would come home from the best little league practice with the best little league coach with the best little league team and he'd say, dad, baseball sucks. No Johnny, you suck at baseball. Most entrepreneurs have never had the base level skills on how to actually run a business. You're amazingly world class at marketing. But have you had a lot of training on interviewing, A lot of training on onboarding, a lot of training on leadership development, a lot of training on running effective meetings, on situational leadership, on coaching, on delegation, on project management, on time management, on managing conflict. Like we stumble through that omden. I had an entrepreneur, recently, $100 million company, he's hired, interviewed and hired hundreds of people. And he was complaining about his people. I said, how much training have you ever had on interviewing? He goes, none, but I've hired hundreds of people. I said, maybe you've done it wrong every time. And he went, oh, like it just dawned on me. He's like, you're right. Like I actually don't know if I'm doing it right. And I think that's where so many businesses struggle is they're going to try hard. They're like the fly trying to get out the window. I'll keep trying till I get out the window. There's a door, turn, go out the door. But they don't even know that there's a door, right? No one's ever shown them that. And we tend to get very stuck in our functional niche. Like, if we're an engineer, we get good at engineering. If we're an accountant, we get good at accounting. I call it the golden circle of Simon Sinek's is the why, the how and the what. The why is again, the core purpose, core values, your bhag, your vivid vision, your core, like the history of how you got there. I obsess about the middle ring, which is the how we run companies. And then most companies are good at what we do, right? They're good at the what we do, but they really are horribly adept at the how, how to build it. So don't stop now. Click here. There's more great videos that you can keep learning from and together we're unlocking amazing leadership lessons together.
