YPO President & COO Sean Magennis | The CEO–COO GRAY AREA That Creates Conflict (Podcast 608)

The world right now is littered with mastermind groups for entrepreneurs. There's just dozens and dozens of these groups of entrepreneurs, and YPO is clearly the highest level.

You and I both know, as CEOs, as presidents of organizations, we not only bring our business responsibilities and accountabilities to the table, we bring our personal lives to the table. We bring our own desires. We know that a lot of our members, once they've achieved a certain amount of success, they want to give back or they want to impact their community. They want to do something that's socially good. We're really good with our defined constituent group, and we really help them and provide opportunities for access to learning, to each other, to great thought leadership, to great institutional relationships with universities and thought leadership around the world. We can collaborate, you know, across a variety of different ecosystems to really help make the world a better place at the end of the day. Business makes the world go round. We all know that. All comes down to business hiring, whether it's in the for-profit business stack or the non-for-profit Sean Maginnis is the president and chief operating officer of YPO, the Young Presidents Organization.

YPO is a global community of chief executives dedicated to becoming better leaders through lifelong learning and idea exchange. He began his business career in management in South Africa with Farmag Limited and Dow Limited, now one of the country's largest producers of agricultural chemicals. After moving to Canada in 1990, he founded an organizational development consulting and human resources business. As well as an executive search business, which grew to encompass operations in Canada, the USA, and Mexico, serving thousands of clients. Sean is the past international chairman of the Entrepreneurs Organization, EO, and he played a key role in EO's North American and global expansion for over 16 years. He's also been a Goodwill Ambassador in discussions with various government agencies, including the State Department. He's also an active member and past chair of the YPO Dallas Chapter. And Sean and I were on a global committee, gosh, a long time ago, probably 20 years ago now for EO on a forum. So Sean, welcome to the Second in Command podcast.

Thanks very much, Cameron. Great to be here with you.

You were chairing this forum committee for EO and we were sitting down and debating. I remember at the time, I think we were talking about spousal forums as being this new initiative and everyone was really wondering whether it was going to be a good initiative or not. Lots of good debate, but you've been playing this kind of role where you've been largely involved in running nonprofits or businesses other than yourselves for a long time. How did you, I guess, balance that with running your own companies? And also maybe just give us a little primer on what YPO is as well.

Absolutely. Well, you know, it has been a fascinating journey. And I came to the volunteer world and the nonprofit world very early. I was very fortunate. And I know you have been too. Very early in my career, I just qualified my company for EO, just reached the million-dollar sales mark. And it had taken me about 3 and a half years to get there. Bootstrapped it all on my own. No debt, no borrowings, literally sale by sale at night, generating invoices, borrowing. You know, in those days we didn't have laptops. I had a big clunky IBM desktop computer that you virtually needed a freight train to bring into the office. But one of the things I learned in that journey, and I was introduced to EO through a group of YPO members.

Yeah.

Was, and immediately got told that I was gonna volunteer to help run, and on an unpaid basis, a group, a peer group of young entrepreneurs that were building their businesses, grinding it out, you know, with the same struggles. I got so much, Cameron, out of that experience because being in a group of individuals who were going through almost the identical pains, whether it was—

Mm-hmm.

Factoring your payroll or collections, your marketing, hiring your first employee, your second, your third, moving into a new market, you know, moving into a new country. All of those things, having never done them before, you can read them all. Business school teaches all of these various things to you from a more of an academic perspective. Living through it is a different matter. And so having the alignment with this group of volunteers. Really, I became addicted to volunteering. And so once my business had qualified for YPO, at the time YPO's qualifications were about $10 million in annual sales, and I'd run through 16 years of EO, it was a natural progression for me. And for over 23 years now, volunteering for the nonprofit peer group has just been a central pivotal contributor to my own personal success, personal learnings. I met my wife, Falia, through EO, and she was the daughter of a YPO, the single greatest benefit that I received. But, you know, to put it back in the context of YPO, for the last 5 years, I've been a YPO member since 2007. For the last 5 years, I've been on the management team of YPO.

Yeah.

2 YPOs that run it. We have a CEO. He's a 26, 27-year YPO member, and myself as his number 2. We have a very active volunteer board of 17 highly successful CEOs. And then we have a governance structure in the organization of about 150 members from around the world. YPO today, we're over 27,600 members in 135 countries, 460 chapters. We have over 17 million employees across the membership companies.

It's incredible.

And yeah, and we're closing on $9 trillion in, in member company sales. So it's become a significant business. And even though it's a nonprofit with a strong focus on providing learning and a platform for members to interact with each other within this, what we call our safe haven, when you put members together, it's a highly personalized highly confidential environment that we create for them. And so it's become a fairly complex, but extremely, extremely exciting organization to be a part of from the inside. You know, so I have the benefit of having been the recipient of member value and services now, you know, having the privilege of at an inflection point, 68-year-old organization where we now have to be relevant in the 21st century. With all of the things that your CEOs and your audience are facing, massive disruption, tech disruption, digitalization, 4th industrial revolution going on, continuous globalization. I mean, how do you create a culture where you've got the underpinnings both on process efficiency, all of your back office, and yet you're not leaving your customer behind because the customer is the most important Well, and you guys are not, as you just pointed out with some of the numbers, you're not running a small organization, like 27,600 members worldwide, 135 countries.

The world right now is littered with mastermind groups for entrepreneurs. There's just dozens and dozens of these groups of entrepreneurs. And YPO is clearly the highest level. And you're not just the entrepreneur, you also do the hired gun president or CEO. You're kind of the top person in organizations. How do you get these people, the men and women who are members of YPO globally? And I have a client who's in YPO in Thailand, and he said his chapter accounts for 37% of the GDP of the country.

Yes.

Like you're dealing with the real player, real company CEOs. How do you get them to come and join an organization like this and be vulnerable? How do you teach CEOs at this level to be vulnerable and open and willing to learn?

The key for us is we do it through member-to-member interaction or member-to-prospect interaction. The key for us is it built into the DNA of the organization is the spirit of volunteering and the spirit of openness and humility. A lot of it stems from the work that comes out of the forum product that you were speaking about when we first started speaking. Forum was something that YPO introduced 46 years ago now, which is really a very intimate gathering of 10 to 12 members from non-competing companies who get together once a month for 4 or 5 hours. And it's a highly scripted, moderated experience where you have one of the members actually leads and moderates the group. You get trained to do that. And the purpose of Forum is so that you can bring your entire self into the Forum. Nothing that gets discussed in the Forum is allowed to be disclosed to anybody outside the Forum. If you disclose that, you're invited invited to lead the forum. And that's very rigidly maintained. What happens is after a period of time, you as an individual forum participant bring all of your issues to the table. It starts out business and you get business issues solved. You're not allowed to give advice in forum. You need, you speak from experience. And that's one of the key drivers that I'll anchor in on a moment is that YPO members get trained to speak from experience, which is very different to advice giving. So somebody that's been through Let's just say a business failure, a massive business failure where there was a bankruptcy or there was a massive turnaround, or the individual had to put the, a month's payroll on their credit card or mortgage their property. And then how they got out of that, how they solved that business problem. All of those things get disclosed very personally, very truthfully within Forum because there's a guarantee that what gets said in that room stays in the room. So that authenticity, that sort of humility, that egoless ability to safely share what's happening in your life, that starts to permeate through the whole organization. You will hear members say, I'd like you to hold this conversation that we are having under the guidelines of forum confidentiality. Those on the inside is, I'm telling it like it is, and I expect you to hold that, that that in confidence. And so it's not a legally binding framework, but it's part of the DNA of the organization. So when we go out and attract members, prospective members, we very often lead with the concept of what would it be like if you were to meet with another group of very successful CEOs, the same age as you, younger than you, older than you? And what if you were able to learn all the lessons that, that individual had learned in their business career and in their personal lives in a manner that's truly authentic, that's based on trust, that's factual, and that's real, and you're getting it from the person that lived through that. Would that be a useful experience for you or an opportunity for you? I have very seldom had a qualifying prospect say no to that invitation.

Yeah, that invitation is huge.

Powerful, isn't it?

Yeah. It's funny. I'm sitting here listening to him going, wow. Yeah, of course. Like, just sign you up, right?

Yeah. And then it's also about the whole person. So we know, you and I both know as CEOs, as presidents of organizations, that we not only bring our business responsibilities and accountabilities to the table, we bring our personal lives to the table. We bring our own desires. One of the things that we've migrated to IPO over the years is we know that a lot of our members, once they've achieved a certain amount of success, they want to give back or they want to impact their community. They want to do something that's socially good. They want to change the world in some positive way. And so we also now provide a platform for those of our members who want to have a significant impact outside of the pure sort of profit generation desires when you first get into a business. More and more of our members, Cameron, are playing multiple roles. whether it's giving back in their community, leading in politics, impacting through some technology or through philanthropic giving, and really starting to have an impact on the world. And so I'll talk a little bit about the strategy and the evolution of where the organization is going and how we need to provide in an ecosystem. And I use the word ecosystem because we don't feel we need to own the peer-to-peer space.

Yeah.

We're really good with our defined constituent group, and we really help them and provide opportunities for access to learning, to each other, to great thought leadership, to great institutional relationships with universities and thought leadership around the world, create a place for young children and spouses to work within this and collaborate together. We can collaborate, you know, across a variety of different ecosystems to really help make the world a better place at the end of the day.

For sure.

And business makes the world go round. We all know that, right? It all comes down to business hiring. You know, whether it's in the for-profit business sector or the, or the nonprofit business sector.

Well, I'm curious how you're taking some of the skills and lessons that YPO has really ingrained in building the forum experience and the chapter experiences. What tools do you take from the forum kind of experience or the YPO membership experience and bring into your business? You know, do you take that confidentiality in? Do you take the bringing your whole self in? What do you bring in and how do you bring those in?

In fact, we have a product in YPO called Forum in business, and you know part of that is taking some of the key tenets of forum: transparency, honesty, authenticity, parking your ego, equality. Part of forum is the process of forum because you're talking from experience, not from advice giving, is suspending judgment. And even if you just follow the basic principles of listen before responding, really assess your own. You know, how are you feeling? Is the hair going back? You know, you're sitting in a business meeting. It's been a tough quarter. You're looking to blame or you're expecting somebody to blame things on you. Forum, the forum principles teach you to kind of sit back, breathe, listen, evaluate utilizing data and fact, not jump in with a defensive comment or a critical comment. It really helps you suspend some of those basic things that are By the way, natural human reactions.

Yeah.

These are just physiological reactions, but the discipline of the forum techniques helps you identify what those are and then helps you as an individual. And I'll use my experience. It's helped me tremendously partition the physiological reaction from the, what is the reality? What am I hearing? How does that play, you know, to the data that I have at hand? So building those structures and those disciplines, Very powerful in an organization.

So do you take those tools and those structures and teach them to your employees? And if you do teach them to your employees, how do you teach them so they understand that same experience? Because I think that's where it can be really powerful, can't it?

Yeah. So it's done in different ways. At YPO or iEmployee Group, every single employee as part of the orientation gets trained in how to participate in a forum.

Okay.

So they go through the full training that a member would go through and they experience that in a small group. Now, They're not a YPO forum. So, you know, it's because the YPO forum is a true peer-to-peer forum.

Yeah.

In an organization, what you want to do is tease out those applicable principles because you're not in a peer group. You may have a supervisor with a subordinate within a matrix organization with another member of a different team. But as long as the principal foundations are adhered to in terms of how you structure a meeting, what you discuss in a meeting, how you discuss, the timekeeping, the record keeping, the speak from experience, the use of data and fact. Suspending critique and judgment. Those foundational things work perfectly within the constructs of managing a business.

Yeah, it's funny. I just started listening to some of what you're saying and I thinking to the book that I wrote, Meetings Suck, and how much of what I pulled from Forum I actually pulled into the meeting structures almost by osmosis. I was thinking about the moderator, the timekeeper in the parking lot, and those are right out of the Forum experience.

Right out of the Forum experience. And really at the outset, So much of business today, you know, the best CEOs that I've met, and I've met like you thousands and thousands and thousands over the last 24 years, the best CEOs are the ones that can clearly articulate their values, their own personal values, you know, show up as authentic human beings, human first, business second, you know, operative second. And within Forum, That foundational principle of sharing your values, your hopes, your dreams, some of your frailties. And even for CEOs, obviously there's a boundary and there's a line, and you're not going to share with your employees that you've got terminal cancer when you're leading a publicly traded company without informing your shareholders first and having all the risk mitigation strategies involved. But if you can clearly commit to sharing your values in a way that says, Here's who I am, and I care for you at the human level. Step 1.

Massive.

Massive, right? You know, because that, I mean, we spend so much time together in an organization that has to be a core first step.

I led a session at the COO Alliance event. I run kind of the only network of its kind in the world for the second in command. And I had a session that was very impromptu about a year ago where I was, I was going through a really tough day, Frank. I was looking at the group and I thought to myself, you know what, I'll bet you every single person in the room is struggling with something right now as well. So I had everybody write down one thing they were deeply struggling with on a Post-it note. And we all passed around the Post-it notes and shuffled them up and read them out loud. And man, it was powerful to see 30 different people in tears when they realized how much everybody else was struggling. And this just, I think that's just part of the human condition that every employee is showing up with the same shit we are, right?

Yes. And, you know, Cameron, in today's world, we have employees whose families are employees here in the United States. Whose families are living in emerging market countries where there's civil war. So they're carrying their accountability load within the organization and obviously expectations, et cetera. But we all have lives in the background. And so those Forum constructs enable you to understand that first and foremost, you're dealing with a human being. The second aspect of Forum, which is so profound and so pertinent to business, is 100% commitment 100% commitment to your obligations that you sign up for in joining a forum. Now, my forum, I'm allowed to miss 2 meetings a year. We're an older group. You know, people have travel, they have homes around different parts of the world. And so in the business context, when you're working in teams, the commitment is 100% commitment to show up to each other. Foundational, right?

Interesting.

Then you've got the protocols. So then you've got the speaking protocols. You know, when you speak, it's gotta be from A factual data-based foundation. How many businesses do you and I know where it's a lot of knee-jerk, shiny new balls? You sweep the reality under the carpet. The best businesses define process, utilization of data. Obviously, you don't want that to kill creativity. You still want creativity and innovation. You want to fail fast, but you want to have this culture of, come on, let's go for it. Let's transform. And let's do that continuously. You still need the underpinnings.

I was talking yesterday to somebody about the underpinnings of a business changing. And I was saying that we've evolved like in a business, a business evolves like a human evolves. So when you were 4 years old and when you were 14 and when you were 24 and 34 and 44, you were still Sean Maginnis, but you were a very different version of yourself.

Of course.

How do you think a company has to evolve and how have you worked to evolve companies as they grow and as they kind of go through the The teenage adolescent adult phases. What needs to change?

You take an organization that's 68 years old that started out really more of as an association model, and as it grew, so it started. So the demographics got older. The average age of our total membership today is 50 years old, but in order to get into YPO, you have to be under 45. We recruit most of our members in the age of about 35 to 42. So the average age of a new recruit is closer to 40, but because we have a whole group of individuals that's over 50 years old and growing because we have a very high retention rate industry, we have a 94, 95 plus percent retention rate, which is every business would give their right arm.

Die for that.

Sure. Right. You know, so it's meant that during certain phases of the business's growth and development that you'd have to really take a very close look. Firstly, you've got to position yourself and you've got to really understand your business comparatively to the market. And obviously there are a number of key drivers there. You know, are you getting year-on-year growth? Has your growth stagnated? What is your demographic? You know, is there any price sensitivity to the pricing points for your product or your service? There's a whole series of business metrics. And then obviously you've got competitors or comparatives that you can go in and compare to. In our sphere, we follow About 110 companies, not necessarily just strictly core competitors, but more and more we're following online communities. We're following virtual communities.

Wow.

We have a whole team, Cameron, that's looking at, you know, and really listening to our membership, right? So we've, in the last year and a half, we spent a lot of time listening to, holding focus groups with the millennial population. And then the next group that's coming up, part of it is how do you remain relevant? We know from the older demographic, what's important to them. And we know that there's a lot of stickiness there because people that have come through our ranks and who've had a great experience with us, our fees are relatively low. They know how to extract value from the products and services that we put together. The other part of the question is what changes in the fundamentals? I don't think the fundamentals change that much. I think what changes is the environment in which your business is operating. Whether it's the economic environment, the global environment, the different things that are happening, the stresses that are out there, the fundamentals. If you look at any business, and I'll say this with a high degree of confidence because I've seen a lot of businesses, I've seen turnarounds, I've seen, I spend a lot of time with a variety of different company CEOs, as you know.

Yeah.

And, you know, the foundation elements of getting process right, communication right, Transparency, clearly understanding and setting a vision and a purpose and a mission and aligning your whole team towards those, those constructs.

They stay.

I think they stay.

Yeah.

It's just the nuances. And then the most critical thing, which doesn't change, which will never change in a business, is that every business is heavily reliant on every single person in a business.

Do those foundational pieces that you, you listed off, do they stay consistent in all of those 135 countries as well, or most of? Or does it change in any, are there any countries that you're doing business in where those things just don't work or there's something different?

I think that there are absolutely cultural nuances, right? I mean, every country has slightly different cultural nuances, but the foundational business practices, if you look at what we learned from Japan, when Japan taught us the quality parameters after the Second World War. You know, we went in and there was the Marshall Plan and we did all this rebuilding. They'd say we were giving all our IP, but look at what's coming. Look at what came back to us from Japan.

Yeah.

Look at what's coming back to us from China now.

It's incredible.

Even though, you know, there seems to be this prejudicial conversation or very highly loaded conversation, and I'm not going to take sides in this one because that could take us 3 years to decipher. Right. But once the foundation is set and people expect quality, people expect on time. People want what they want and they'll, particularly in an environment that's not socialist or communist, they vote with their pocketbook.

So one thing I noticed, I was talking to a YPOer in Kenya and he was talking about what's important to employees and what a company needs to focus on is different in North America or in Kenya and that region of Africa versus North America. And I said, well, in what way? He said, our employees are going home and we're not ever sure if they're able to feed their family.

Yeah, that's a big one.

And he said, North Americans don't really think about that. They're all trying to give their employees a better workplace and a foosball table and free massages and alignment, alignment with core purpose. And he goes, if I'm not sure that my families are being fed, and then he said, we started to realize that if we paid the men more money, the assumption was the money was going home to the families and it wasn't. So what we started to do is at the end of the day, we gave them the male who was working food. To bring physical food home to the family because we knew they couldn't spend the food at a bar. And it was just interesting to see that kind of a cultural shift. Do you pick up any of those things culturally or have you picked up any cultural things that are happening globally and brought them back into your business or?

We do. We have 360 full-time employees spread around the world. 75% of our employees are women, by the way, and 50% of my C-suite are women. And very diverse, diverse cultures. So, you know, in certain parts of the world in which we operate, we need to make sure that our employees can actually get safely from their home to the workplace and back again.

Yeah.

We don't think about that in North America. We all jump in our cars here in Dallas and we head home and we operate in certain cultures where they are still very male-dominated society and where we stand for equality and we stand for full diversity across all the diversity spectrums. not just gender, and we plant a stake and we say we're going to have members that are representative of every community in the world.

Yeah.

We have to take into consideration and be patient and work through without sacrificing our stand and being in integrity with our stand. We have to work with the rules that we give them. And I don't think there's a culture or a business that we can't learn something from. If we stop learning, And experimenting, then I think this grand, incredible societal world that we live in grinds to a halt.

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What do you think your biggest skills are as a COO or as a leader?

You know, it's changed over time. A good executive is constantly learning. I think as a COO, I think the important thing that I've learned is one, particularly also in an organization like YPO, you've got to learn to park your ego at the Yeah. What doesn't work in a peer group or in a relationship between a CEO and a COO is having either both of you or one of you allow your ego to get in the way. So ego management, so difficult to do. And that's something, you know, that, that certainly I've tried to work on a lot better at coaching coordination, I think, are fundamental 21st century skill sets for A CEO today and a COO, you've got to be able to direct and coach and influence without direct accountability. Particularly as your organization gets bigger, right? When you're a sole practitioner or you've got 5 or 10 employees and you're still sort of able to roll up your sleeves and do most of it, it's more hands-on. You've got to be able to think more strategically and become a dot connector and then problem solving, you know, and that comes with experience.

Yeah.

I am way more capable, Cameron, today at 54 years old in solving problems because I've seen so many problems. One thing to apply intellect and when you're dealing with human nature, when you're dealing with problems that are not necessarily financial or technical, but are more nuanced, that require patience, that require negotiation, that require, you know, bringing disparate group of stakeholders together. Vendor negotiations today require a huge degree of skillset. All of those nuances require CEOs to upskill on a consistent basis.

It's interesting.

You're talking about all the soft skills that in some ways I used to take for granted. I was really exposed to a lot of this stuff at College Pro Painters years ago when I was with College Pro and opening up the West Coast of College Pro. And we really worked hard at growing our people. I remember Greg Clark, the founder, and Greg used to say that the leader's job is to grow people. And, uh, and he obsessed about how can we grow our people? How can we grow our people? What you're talking about now, I think is even infinitely more important than it used to be because the speed of business is faster. Business is so fast now that I think the soft skills leadership is probably more important than it's ever been. How are you growing your team at YPO and how have you grown it in past companies you've run?

The key thing obviously is to have a very defined talent and career path. When a person comes in, obviously they come in with a baseline. They come in with the experiences that they have. The skill sets, the resumes, and they're in a particular role with a particular set of objectives. From a developmental standpoint, it's very important to understand what they come in with. And then also to understand very early on what their desires are for future contribution, because everybody comes in knowing that they have to do X, Y, and Z, and they get their 2-year plan, they get their team. But it's very important to transparently understand, to collect and gather where an individual is, what they personally want to do in the construct of your organization, and then even further, and then to create the conditions for that. One of the struggles that I've had in this business and in previous businesses is when you have relatively flat organization where there's not a lot of room to move.

Yeah.

How do you keep a person stimulated, rewarded, and growing where, you know, they may hit the ceiling? And there may not be a role for them elsewhere in the organization within a 3 to 4 year timeframe. And so the key is to maximize that time that they're with you.

Okay. So you're touching on something that I've been trying to wrap my head around recently, and it's the second half of the Gen Y cohort. So really we're talking about the, um, the 23 to 30 year olds currently today. So how do you get this next, the second half of Gen Y, the 22 to 30 year old-ish group? How do you keep them loyal to an organization? YPO seems to have done a pretty good job with that, where your team doesn't transition as fast, or is that a legacy feeling?

No, no, no. I think that's still fairly accurate. I think our turnover is in the sort of 20, 25. Listen, I think turnover is healthy too. Part of my dilemma in the early days of my business is I came from the old school. I watched my father. I understand. I've tried to build my businesses around that. So I take a person. In a junior role, I'd look after them. I'd accept weaknesses. I'd mitigate for it. And you end up building almost what I would call a bloated structure. I did that twice. I built this loyalty. And what I found was, while I thought I was helping the individual, I was actually harming the individual. I wasn't really giving that individual the opportunity to be the best that they could be for me and be totally fulfilled and maximize their potential. In one particular example, I overpromoted an individual, got to the point where this person was getting paid more than a junior-level contributor that was doing 3 times what the individual was doing.

Right. Yeah.

And, you know, I think we all make those mistakes. So one is clearly understanding the current role requirements, having a really good, simple, simple and continuous feedback loops because The last thing you want to do with a 22 or 23-year-old is not give them regular weekly or monthly or regular feedback because they're very into their personal development. The old way of every 6 months sitting down, doing a review, how are you? Managers today need to be talking to their employees, their subordinates almost weekly in terms of making sure that they're effectively supported, doing what they're expected to do, and that they're fulfilled in their role. Purpose is another big one. I find that a lot of younger people today, Cameron, will not work for an organization unless they clearly align their value set with the purpose and values of the organization. That sounds like a truism, or it may sound trite, but I can tell you that in our organization, in others that I closely work with, I sit on the board, the boards of a number of companies. That's a very big attractor. And, and so often. We think that, you know, you've got to pay top dollar if you don't get your values right. In fact, if your values are right, the conditions of employment are right, you care for your people, you give them upside. And by the way, if they do leave because there isn't a role for them in the organization, when they leave, you've prepared them so well, you've given them the tools, you've given them the right sort of examples, they'll go on and be your advocate.

That's right.

Way longer past their employment with you than you will believe. And there's statistics behind it.

That's such a huge point for entrepreneurs and for leaders to actually understand is that our job isn't to try to keep people forever. Our job is to get, like, to grow them and keep them for as long as they're useful and they're having fun and we're having fun and then set them free almost like we're growing our children, right? Our job's not to keep our kids at home forever either.

100%. And then there's the classic, right? You've got to measure what you're looking for. So we do engagement surveys and we look very carefully. We do it by department. We slice and dice it in a number of different ways and we'll see You know, this department's not doing great. Well, what are the ratings on the manager? Boy, the impact of a manager's behavior is so profound on their, on the people that are reporting to them. It's a direct correlation to success. You look at the work that Michael Bush is doing in, um, in the best companies to work for.

Mm-hmm.

You know, he's the CEO there and you look at the statistics, you look at Fortune's list of best places to work. You look at the, you know, at their, at their research on leadership, it all boils down to, particularly for the younger individual, the person leading them, mentoring them, guiding them. And that's where we spend a lot of our time with our managers, teaching them, training them. I spend a lot of time, and as do our C-suite individuals, coaching a level down or 2 levels down, mentoring.

Right.

Another one. It's huge. How do you learn? Right.

It's interesting.

You keep going back to the data a lot as well and how data making decisions. Is that something that is a new skill for you?

I was in businesses that were very data heavy, building low-income housing. You need to, an engineered product. You have to be on top of all the detail, but in business, professional services business, which really YPO is, and how we're modeling ourselves, data is the lifeblood of our business. Understanding what your member needs are, understanding, you know, where the markets are, the cultural differences, the nuances in different chapters and regions, what's working and what isn't, the effectiveness and the outcome of certain events that we run. You know, we're putting on a mergers and acquisitions seminar and we are getting a net promoter score of, you know, 10 as opposed to 90. We are doing something wrong.

Wow. Yeah, very much. Yeah. And I love that you're using it. Do you ever allow your gut to overrule the data or do you just trust the data?

I have learned that if I go to data first and I sleep on my gut reaction, it's more of 50/50 or 60/40 in favor of the data today.

Yeah.

And what I'm finding is if my gut's trying to overrule the data, I go look for more data and the data will sometimes will play out and either change to prove my gut or the data will just start to really slide in the favor that my gut was just wrong.

And also, I've learned that the leadership journey doesn't need to be a lonely journey.

Yeah.

I'm blessed with an incredible group of individuals that I can go to for advice from their experience, right? I can pick up the phone and talk to a CEO who's running a $300 million business, roughly the size of our business today, and say, how have you dealt with this issue? How have you worked with a board? What are your compliance things? What sort of experience have you had? In this different area, and I can get an instant answer or 2 or 3 different answers, calibrate, and then make my decision.

Yeah.

Well, I've never been smart enough to figure it out on my own anyway. So I like to rip off and duplicate. Why would I try to figure it out when I'm sitting with a forum group of 10 people who have already figured it out?

Honor where you've been, where you've been helped, right? I mean, part of the integrity of leadership is also not necessarily taking the credit, even though you're the deciding force and the buck stops with you, or in my case, The buck stops with Scott. He backs me up, by the way, 100% in my decisions. That's the other important part which we didn't discuss is how 2 people who are running an organization support each other and what sort of rules should be in place and commitments.

How do you stay in sync with the CEO and how does the CEO stay in sync with you and how do you decide roles and responsibilities between the 2 of you? Because it is kind of a 2 in the box.

Communication, agreement. An agreement. I mean, we sit down, we do days away together, which are just spectacular. We do a lot of forum stuff, start with a softer interpersonal, how you doing? What's happening? You know, really get connected as people. We look at authority matrices. We're very open in terms of discussing what's working and what isn't. We have a format that we follow, kind of a baseline agenda. We share our views openly without critique. We agree to disagree, but when we leave that room, we're 100% aligned. We're very clear on our roles. Once a year we sit down and we say, okay, how's, how are we doing on our roles? You know, my commitment to my CEO is I'm a vision amplifier. I'm an executor. I'm not in the limelight. I am not the ultimate accountability individual. And I had to get real clear with that because for 25 years of my life, I was.

You were, sure.

It's gotta be openly discussed and agreed to. The definition of decision-making rights, what's appropriate and what is appropriate. You've got to get clear on that. If there's any gray in that area, you're going to butt heads.

Yeah.

And on the flip side, I need support. I don't need to have anybody utilizing a backdoor to countermand a decision. If there's a backdoor, I've got to be told about it. If somebody— and this isn't about restricting people from meeting. We have a very clear, open authority that anybody can talk to, me or the CEO. If you create the culture of we're going to be very openly open and transparent. Um, but that's very, very key. And then any changes that come up, we have a commitment to each other that if we for one minute suspect that there, or feel that something isn't right, we pick up the phone.

Yeah.

It sounds communication, right?

Communication, communication, agreement, and then telegraphing it to the rest of the company. When we go out and we do this consistently, we'll sit in our senior team leadership, hey, You haven't been CCing Scott. You haven't been CCing Sean. I just want to remind you, you know, we're a partnership. Here's how we expect to be communicated with. And it's reinforcement.

Huge.

Once you get into that rhythm, it takes time and it takes the right combination of people. It's not easy, but if you get it right, and I feel we've got it 99%.

If we were to rewind back to the early days of your career as a CEO or really early days of your career as a COO. What's something that you've really, really learned that you've really gotten good at that you wish you'd known earlier on? What's a lesson that you wish someone had told you or you could tell yourself as a, you know, 20-something entrepreneur?

I would not rush any type of communication interaction with key employees. I've learned to take time. In the old days, you know, it was ready, fire, aim, ready, fire, aim, one thing to the next, to the next. What happens with that is you lose connectivity and you don't establish relationships. The more you put into individuals, the more that you'll be able to have them respect, trust, forgive you, give you a little bit of leeway and slack, because we know that the world is messy and you know that business is messy. Business is never a straight line. I know that old adage of the hockey stick going up. It's a whole bunch of little wrinkles and swivels and ups and downs. And hopefully the trajectory is in the right direction because you You know, we all aspire to improve. The mantra that I adopted, which I never had before, was operate as a leader with a servant heart and a business mind.

That's great. Servant leadership is huge. Sean Maginnis, President and COO of YPO. Really great learning from you and sitting and listening to you again. And wonderful that we'd met 20-odd years ago. And thank you so much for being on the Second in Command podcast.

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