From Vision to Reality: Building Your Dream Team with a COO with Cameron Herold and Joe Polish - I Love Marketing Episode #463

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 often. I had an entrepreneur recently, hundred million dollar company. He's hired, interviewed and hired hundreds of people and he's 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.

If you'd like to join world renowned entrepreneurs at the next Genius Network event or want to learn more about Genius network, go to www.gienstruitnetwork.com. i'm here with Cameron Herold. He is a good friend, author of many books. I'm not going to give you a serious introduction. I'm going to ask you to explain who you are. So good beer. You too. All right, so I'm holding in my hands the second in command, all right? Unleash the power of your COO with the most important, probably endorsement of it, which is me on the very back cover.

Did that give you top placement? Yeah, of course. There we go.

Yeah, I mean, I would like to think I'm sort of a big deal. I'm totally kidding. So we're going to go through the book and anything that's not in the book, obviously people need to read the book. They need to get the book. But this will be sort of a setup for anyone that's already read it, it's a great book. Or why should they look into this? What does that even mean? So the second in command is obviously the coo. So I'm going to ask you to define what a COO even is. But first, who is Cameron Herold?

I'm Cameron Herold. I was the founder of the COO alliance, founder of the Second In Command podcast, lifelong entrepreneur. I've also played the second in command role a few different times for a few different companies. And one of the reasons I even called the book the second in command is sometimes it's a coo, sometimes it's a VP of operations, sometimes it's a Director of operations, sometimes it might even just be your executive assistant. But it's who is really the yin and yang to you as the entrepreneur. So I wrote the book as a way to help companies understand how to Recruit one, how to onboard them and how to build a really strong relationship with one. Because there's a lot of times kind of people screw that one up as well.

At what point does someone determine they need a coo? Because usually it's when it's so messy that oh, now we're trying to fix it versus let's look at the preventative aspects of it and let's approach it for someone who their business is kind of chaotic and they don't have any. So how do you approach both sides?

Okay, so at the end of the day, we only start a company for one of three reasons. Either to give us money, to give us free time, or to put a stake in the ground and say we accomplish something right after we've got our business up and running. We've pretty much accomplished something at some point we have enough cash, but often we don't have the proper life. So sometimes our business is draining us. You like to talk about elf, right? Easy, lucrative and fun. And if an entrepreneur is working on stuff that is draining them of energy, is frustrating them on a day to day basis, their business is destined to flatline. So you can bring on a second in command as a way to actually get all the stuff off your plate that drains you of energy that you're not good at, that usually will really accelerate the growth of your business. So that's number one. Secondly is if you're just not able to spend the time on the areas that you could be. Right? If you're so busy managing the day to day and you have no time for strategy, no time for culture, no time for networking, no time for growth, and no time to really grow your direct reports if you're merely managing them and overseeing them, but you have no time to remove their obstacles, grow their competence, grow their confidence, you're really kind of dead in the water there as well. So that's really the other part is to give you that time to actually scale it properly.

Have you found that with the differences between like an operational person and a visionary entrepreneur that most of them clash in terms of how they do things? And the reason I bring this up is that it's real easy to resonate and be chummy with people that think like we do, that kind of feed off of our energy. But oftentimes the very best person that you may be a visionary entrepreneur brainstorming with is not the person who's going to be executing and doing the operational aspects of the business. So how do you. What's the. I don't Know if mindset is the right word, but how does one go into this prepared to not either hire the wrong person or look for the wrong person or the wrong talent and behavior to match what it is that actually needs to get done?

I'm going to use an example that if we're trying to find a partner, right, we want to find a woman who matches us. We're not hairy versions of women. We see the world differently. We approach the world differently, we perceive things very differently. And for us, we have to try to learn how to talk with women, and they have to learn how to talk with men. And when we do, to understand each other and communicate better, we. We have a really strong relationship. Very similar for the CEO and the coo. We have very different personality profiles. Most. You're familiar with the Colby profile. Most entrepreneurial CEOs are very high on the third number, which is quick start. They like to start now, plan later. They initiate very quickly. Momentum creates momentum. They're shooting from the hip. They're the perpetual motion machine, and they need to be. Most COOs are very high in the first two numbers. They're either a very high fact finder. So they like to ask a lot of questions before they start something, which often drives entrepreneurs crazy, because we just want to get started. They're actually just trying to understand us. The second number is called follow through. I believe it's kind of misnamed. I think it should be more like the systemer, because they put systems or playbooks or processes in place before they initiate a project. Most COOs are high in those first two numbers. When we learn how to speak COO, we learn how to say, do you have any more questions for me? What else would you like to know about my idea that I'm dumping on your plate right now? Do you want to show me the system that you've got and see if I can poke holes in it so you truly understand my idea so then I can really release myself of it. The biggest gift that COOs can give us is to talk faster, to speak in bullet points, to give us the executive summary of the executive summary. Like three bullets is all we need. We don't want the pages of information that they have. We don't want all the. We don't have room for it. But if we ever ask them a question, they better have that for us. So we have to learn how to communicate with each other. That's part of the interviewing process as well, is understanding yourself. When you really understand yourself, then you know what you're looking for in that yin and yang partner of the coo.

Do they slow them down perceptually, but really so they can speed them up? Yeah, I mean, that's what I was going to get at because I think the perception is, well, oh, all these questions I'm going to ask them in a prepare, I'm going to pause, I'm going to think. But in the long run, I think that'll get you going to where you want to go faster with less zigzags. But I think in the beginning, perceptually, it's going to be like, well, this is like slowing me down.

Correct. So what we try to teach all of our members of the CEO alliance, when an entrepreneur comes to you with an idea, we say, I love that idea. Let's go for a two minute walk so I can ask you some quick questions so I understand it more Entrepreneurs love to walk and talk. They love to pace while they're thinking out loud. The fact that we've already said I love your idea gives it a safe place to ask questions. I'm not debating you, I'm trying to understand it. They're like, great, let me tell you more about my cool idea. They want to do that and you give them a small container of two minutes. It might take 10 or 15, but they're fully committed on the two minutes. And if you keep asking questions, they want to keep telling you about their project. So that's exactly what it is. You're kind of slowing down to speed up.

Okay, so.

What are the warning signs or the indicators that you need a COO.

In a company? I mean, I want to get to compensation, I want to get to different ideas. And part of it too is at what stage do you outgrow talent? I'm going to share some of the table of content. So part one is COO is a user's guide. So the first one is what is a coo? The second is what's the point of a coo? Why hire a coo and do I need a coo? Right. So we're kind of covering those things. So you have this need. How do we know we need it? When do we do it?

Sometimes it's a need and sometimes it's an opportunity. Right. Like the opportunity is what would happen if I had a coo? Could that accelerate the growth of my business? Could that free up time? So I'm working in my unique ability as Dan Sullivan talks about. Right. If we look at our activity inventory as an entrepreneur, we're often working on 80% of the time on stuff that drains us of energy and we're really not that great at. So maybe we don't need one, but if we had one and we paid 250,000, 350,000 for a really good seasoned COO, they could relieve all that stuff off our plate to free up our time to truly just be in our unique ability. That's massive. You're going to get a 5, 10x return off that investment very quickly. So you might not need one, but it's like, what would happen if I had one? How do you know if you need one? If you just don't have any time to spend with your team, if you're literally running from day to day, if the projects that are related to you, that fall on your shoulders are so backed up that you've got like a three month Runway of projects, you're just getting in your own way. Right. And it's your business so you're not hurting anyone else but yourself.

Yeah. So when you say, you know, five to 10 times return, then let me just take that number because the big elephant in the room is like, well, I would have all of these things if A, I had the money to do it and B, the money I was spending was not an expense, it was an investment. Right. So I try to look at everyone on my team as an investment, not as an expense. And I have made bad investments and some of the bad investments have been because I've made wrong decisions, they weren't trained well or I just picked the wrong person. Right. So there's all, all kinds of reasons. So what would the return? I mean, is there a sort of way that you look at CEOs is like they're going to do money making activities, they're not just going to do operations. But like, let's talk about how do you self liquidate and finance not just COOs, but team in general because you help people build companies.

So let's say that you're an entrepreneur of a 30 person company and you're managing a team of five or six people that are running the whole business for you and you're deep in the day to day of operating the business, running the business, taking care of people, but you're also an amazing rainmaker. Like every time you go to an event, you show up at a mastermind, you do a speaking event, you do a podcast interview, you're this big rainmaker for the company, but you have no time to do it. If you just hired a COO to take 80% of your schedule off your plate. To free you up to spend two more hours a day, 10 more hours a week on rain making activities, your business goes through the roof. And because you can actually show up, even if you only did two more hours a week on that stuff, but, but you showed up with the right energy because you're not drained working on all the areas that suck up your time and energy, you're gonna actually show up and perform better. Or if you can actually take care of your body and take care of your mind and take care of your health and take care of your relationships, you're gonna show up better as an entrepreneur. And we're the CEO is the Chief Energizing Officer. Right. We have to show up and infuse energy. And then it's the opportunity, is it good energy or is it draining energy? So if you can remove it, that's one way that you'll actually get the 5 to 10x return.

How does in this may sound premature, but I want to ask this first. 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 CEO?

Well, 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 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 like proverbially. Right. That was one mistake is he just didn't kind of. 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 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.

Yeah. Yeah. So let's talk about Brian for a minute though, because last time I interviewed Brian, it was pre pandemic. He, 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.

Wow.

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. Right. So 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 six and a half 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 has a culture 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, the things that could come from numerous consultants or team meetings, but something's really off. The people are not aligned. So how important is that as it relates to Bringing in a coo. 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 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?

Like I think it's two, two to five employees.

Okay. You're not talking single person operators because when then 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 seven and a half million worse. Seven and a half 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 value. An 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.

So 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.

So there's a reason for that.

How explain.

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 the bat, without teaching him how to 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 often. I had an entrepreneur recently, $100 million company. He's hired, interviewed and hired hundreds of people, and he's 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, shit. Like, it just dawned on me. He's like, you're right. Like, I actually don't know if I'm doing it right.

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 is the why, the how and the what. The why is again, the core purpose, core values. Your bhag, your vivid vision, your corp, 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 how to build it.

What do you think is the theme between all your books? Because you've written many books. I look back at meanings suck, right? Well, most people hate meetings. Why? Because you don't know how to do meanings. So you write a whole book on how to be more effective at doing meanings. So same thing here, right? Like, everyone would love a second in command. Everybody watching this would like someone to run their company. And if people already have someone running their company, they would like to have more people to help them better run the areas of their company so that they can continue to be their best version of, you know, again, to Dan Sullivan's unique ability. Right. So, yeah. What is the theme between all of the. Because I think you're. You write books about obvious missing or done wrong problems and you show people better ways of doing it or how to solve it.

So I was the stupid kid in school. I got mid-60s in high school. I went to the only university that accepted me. I got a 2.3 or 2.4 GPA. I was running my own company, president of a fraternity on the ski team. But I couldn't study, I couldn't learn the way I was being taught. And then I got early stage involved into a franchise company called College Pro Painters. And I was trained at a very young age how to run a business. And I was so scared of failing that I did everything that was in the manual. Basically it was the cheat sheets. And I realized that I was handed the cheat sheets to run a company. And those cheat sheets are how I've built every company since. I also.

Was not smart enough to be able to learn everything that was out there. So my dad told me that my R and D should stand for ripoff and duplicate. I just find the companies that are doing the best thing with interviewing. I do what they're doing. So if Brad Smart and Jeff Smart. Right. Top grading and who. I'm just going to do who, but I'm going to get a condensed version of who I can get like the five pager. I'll just do that. Is it perfect? I don't know, but it's way better than I could do on my own. Right. Meetings, like I write down the basic things that really work well for meetings on a post it note that literally could be the book meeting suck. Right. So I just try to take the cheat sheets. What I've been so frustrated with for entrepreneurs is, is I see them trying harder and often they're way smarter than I am, way more talented, have way more money. And I just watch them trying so hard when I'm like, there's an easier way. Just train your people on this. So I'm trying to give them those systems as a way just to help them. I don't make any money off a book. I make like eight bucks. I don't care if everybody buys a book, but if I can actually change the way that businesses operate, that means they're showing up better for their employees, they're building better cultures, Their employees are going home happier. They're. That's sending Off a butterfly effect with families. Like, it's just a good ripple effect. That's the reason. Okay.

So the hiring process.

And then the other part is I'm also not smart enough to write complicated books. So my books are actually technical. They're like a little franchise manual. It's like, here's how to do it. That's the only way I've ever known how to write.

And thank God, because. Yeah. You're not very bright. I mean, I'm totally kidding. Totally kidding. No. So. Well, yeah. And I think that's why people resonate with your books, because most people that. That are in the Cameron sort of funnel, they read all your books. Yeah.

And so I never wanted to be an author. I had zero, zero desire to ever be an author again. I struggled in school, I struggled in English. It's just the first book was written because speakers bureaus said if I had a book, they could charge more for me for speaking. So I did it. And then that actually happened. The other books were more. There was a couple of content areas they wanted more information on, so that was Free PR and Meeting Suck and Vivid Vision were just. There was more there for those. And then the Miracle Morning for Entrepreneurs happened because I was in your office just outside this door. I was walking to the bathroom. Hal Elrod was walking away from the bathroom, and Hal El asked me to co author the Miracle Morning for Entrepreneurs. I was like, okay, like, he asked you to do Miracle Morning for Addiction. Right, Right. The only book that was ever truly like me and my content, other than my first double double, was this one. The second in command. This isn't covered anywhere else. This is just as much as I've got on the area.

Yeah, yeah. No. So you're in a very unique niche of much needed part of the marketplace. So.

Were you, Are you a better teacher or a better CEO?

I was a very, very good CEO for a couple of companies because I came in at the entrepreneurial stage where it needed to scale, and I was able to put in place good basic systems to get it to scale. But I would be horrible at a bigger company, like a medium enterprise level company where I needed to slow down and be strategic. So I was a very good CEO or CEO of entrepreneurial organizations that had to scale fast. You know, hypergrowth.

Well, the reason I ask is that a lot of people will hire people that will say, we can do this, we can do this, we can do this. And I think in an area like you mentioned, if you've never been trained in anything but you bring someone in, you hire someone that actually knows how to do it. They can impress you with their knowledge of what needs to be done, which is completely different than actually, actually doing for it. Right?

Yeah.

Or doing it.

So I think When I was 20 years old, I already had 12 full time employees in my company. Like my business up and running at 20 with 12 employees. I had hired 120 people, 140 people by the time I was 27 years old. So I'd already interviewed and hired and trained and 120of them were entrepreneurs. They were all franchisees for College Pro. So now I'm like hiring and training and coaching 120 entrepreneurs by 1993. International Federation of Coaching and Coach U started in 1993. I'd already coached 120 real businesses by that point. So I'd just been doing it for a long time. And then College Pro, I was very lucky to be in the very senior leadership team in that. And they were hiring so many amazing consultants to come in and teach us. And we went through like I went through six or seven sessions on situational leadership. Dozens and dozens of hours of training on that one skill. The same with interviewing, the same with effective meetings, the same with coaching. So like my base level training was like a real world mba.

Yeah.

And they had it dumbed down so much because we didn't have time to make it perfect. Right.

Yep, yep. Okay, so, so, so how does one hire a CEO?

First is understanding yourself. Right. You really have to understand your strengths, your weaknesses, what really gets you excited, like your unique ability. You have to truly understand your activity inventory and all the areas you can get off your plate. You have to understand the seasonality and stage that your company's in to know what the person's going to be responsible for so that you can have a strong kind of top grading scorecard for the role so you really know what you're looking for. And then I like actually getting an executive recruiter in place who can actually recruit someone who matches your company culture first and skill set additionally. But they have to match both. Most companies will hire the skills and they mismatch on the culture and they end up with the alien who just doesn't quite fit. But they're trying so hard to make it work because they like the person's skills, but they've missed on Culture Fit.

So working with a coo. So we got onboarding, working together. What do I do now when the party's over? So let's kind of go through that.

Working with A COO is almost like having a spouse. You have to have date night. You have to have time to disconnect from the day to day chores of running the business or running the house, to time to get away from the kids, time to get away from the rest of the leadership team. Time to connect with each other so that you can build trust, build communication, have fun like each other because it's stressful. The CEO's job or COO's job is to make the CEO look good. The CEO's job is to make the COO look good. So you need time to reconnect out of the office. So Brian and I, as an example, would go for runs every Tuesday and Thursday morning at 6:30 in the morning. Tuesdays I met him at his house, Thursday he would meet me at my house and we'd get up and go for our runs.

How long are you running?

We were like 30 to an hour, 30 minutes to an hour.

Were you talking during this time?

Yeah, we'd be talking and sometimes we'd just be talking about life, kids. He was my best friend. Brian was my best man at my wedding, three months before I started working with him.

Oh, wow.

We had a very unfair advantage because he knew everything about me. We'd been in a forum group in EO for four years. He'd watched me build two other companies. The trust was already implicit. So it's like, here's my passcodes, here's my bank account information, take care of my kid when I'm off running the meeting. Like it was very, very high trust. Now you can interview for that. But we did have an unfair advantage. We also spent Thursday midday from about 8 o' clock in the morning when we did our leadership team meeting till 10. We would then spend a couple of hours off site together over lunch where we could disconnect and talk strategy and talk about the rest of the leadership team. And then on Friday, for about four hours, we'd either go to his tennis club or my tennis club with our laptops and just sit and work beside each other. Sometimes we'd be telling stupid jokes, sometimes we'd be bugging each other, sometimes it was like doing nothing. But it was the mere presence of being around the other person that I think kept us grounded and connected.

Yeah, that's okay. No, you know that that's actually pretty, pretty good. So people that.

Sorry, one other thing on that, how similar it is to a couple. We worked a few times with marriage counselors like Dr. Patty Ann Tublin. I've introduced her to a number of CEO COOs to really work on their communication. Brian and I had worked with a couple of other ones 25 years ago as well. Joan Mara comes to mind in the very early days where she came in and helped us to understand the way the other person communicated, what our different personality profiles were, how to not get frustrated when the other person was frustrated. Like, how do we. Because we knew we wanted to build it together, but we had to learn how to communicate.

You know, what would you say to you spend as much time or maybe more time with your COO or whatever than you will with your spouse?

Brian and I were business spouses. People used to call us like the married couple. It was hilarious. We would finish each other's sentences, sentences. We were so in sync with what was happening.

I don't know if I like hearing any of this. That's funny. Okay, okay, so.

Let'S talk about compensation then. I mean, because clearly, even if you lay everything out, there's going to be this fear of like, well, what do I pay someone? How do I evaluate my return? What do I first direct them to do?

And.

So compensation is based on five things. The roles and responsibilities that the person is up for. Okay, so we're not worrying about the title yet. We're trying to figure out what am I going to pay this second in command? So what are they doing? How much strategic insight can they bring to the business? How much autonomy can they bring to the business? Like, can they do the job without me having to manage them day to day? What kind of P and L responsibility are they going to have? And then how many people and systems can they bring into my company from the outside based on that? That tends to say what their title is going to be and what their compensation is going to be. I did some. I've got a spreadsheet that we can share with hundreds and hundreds of second in commands based on their title, their roles and responsibilities, the size of their company, how many employees, where they're based, male or female. The compensation is all over the board. What I found is that too many companies give away the C level title too early when they're really hiring a Director of operations or a Director of finance or a Director of marketing. Don't call them a CMO if they're really a Director of marketing. Don't call them a CFO if they're really a VP of Finance or a controller or a Director of finance. So match the title to those five things and then match the compensation to what you have to pay what if you've already.

And I'm speaking for people that have already given those titles to people and they're hearing this and they're like, you know, they're really. They haven't earned that title or their role, and what they do does not live up to it, even though their compensation may. Are you kind of in a. You're sort of in a pickle?

Nope. You're between the rock and a hard place. And then, as Jim Collins said in Good to Great, you confront the brutal facts. So the brutal facts are we have some people in the company that have the wrong title for all of those things that they should have. So I'm going to rip off the Band Aid. And I helped a client do this. I'd coached them from 40 people up to 600 over four years. When we got to about 600 employees, we retitled every single person in the company. On one day, we took all 600 people. Some of the C levels became VPs, some of the directors became C levels, some of the VPs stayed as VPs, but everybody's title was retitled. And we told everybody why we were doing it. And it hurt and it was painful. And about three days later, nobody cared.

Did anyone quit?

Probably a couple, but it was 10 years ago. But it doesn't matter if they quit, because you still have to do those tough decisions. This is where the COO tends to do those tough decisions, because the CEO, you still want them to look good. So the CEO gets to sit back watching it happen. The CEO then has to internally make sure they tell everybody, look, the coo. I needed them to do that. I needed them to make the tough decision. So our job is to make the COO look good. The CEO's job is to make the CEO look good. So the CEO gets to roll out the good stuff.

Okay, so titles. So, you know, there are so many ridiculous titles that people are coming up with and stuff. And I mean, I. I don't know if this is good or bad, but the whole thing about titles. Equal entitlement for some people, not all. And titles are important. They're very important for people to distinguish who the hell this person is, what they do.

Especially if you're going to externally and internally.

Yeah, yeah. So give me some parameters on titles.

So the title has to be understood internally very clearly and from the external world very clearly. What it means. Remember that people, as soon as you give them a title, within the first six months, they're going to be on. Indeed. And Glassdoor and Google to find out what people of that title should be getting paid. So if you give out a title that's too big for their roles and responsibilities, they're going to think that they should be getting paid more. The reality is they're not doing what the COO is doing. When I was the COO at 1-800-got junk and I left there 16 years ago, almost 17 years ago, my total comp was $306,000. That was 17 years ago. If you've got a COO in your company making 140 grand a year, they're not a COO, they're a director of operations. So companies have to actually give out the proper titles and not think that they don't matter. Because they do matter. We started giving them away in lieu of compensation, in lieu of equity, but we got sloppy. And Gen Y got very bad at saying no. And Gen Y also got very good at asking for what they necessarily didn't really deserve.

Yeah. And that they don't even have the skills and talents to fulfill, which is.

Yeah, but we told them to do it like as parents. We went and said, ask for a bigger title, ask for more compensation, don't talk to your boss, go right into the CEO's office. We taught them that.

Yeah. So in terms.

Reactivity versus.

Being prepared. So you're going to make certain decisions if you're just overwhelmed as an entrepreneur, you got a lot going on and you're like, man, you know, I really need someone in here to avoid the Brian situation of abdicating versus delegating.

At what point, what sort of place do you need to be in mentally in order to give yourself the highest possibility of success with hiring? And how much time does one devote to this person once you brought them in?

Great question. Yeah. So the, the real onboarding of the COO is like a 90 day cycle. So in the first 30 days, the COO should do nothing. They should attend every meeting they can attend. They should listen in on every phone call they can listen in on. They should be blind cc'd on internal and external communication to read as much as they can. They should read every manual, attend every training. They should go for lunch or dinner in person or over zoom with everyone that manages people. And during that one month, they should be keeping a notebook and writing down all the things they want to change, and change none of them. In the second month, they go back with their list of 80 things they want to change and they spend one month testing their hypotheses on all 80. Hey, I was thinking about firing Bob, talk to seven people and go, nope, need to handcuff Bob, need to fire Kelly. But once they actually spend the second month testing their hypotheses on all those ideas, they'll know what their ideas are that they should put in place. In month three, pick some core projects that are easy to put in place, that have a low PETA factor, low pain in the ass factor, kind of the easy wins, the low hanging fruit, and do those projects first so that all the employees go, wow, they put a project in place, it was easy. We got a quick win. There wasn't a whole lot of work that builds the trust, it builds the communication, it builds the fact that they're ready to take on some of the bigger projects. In the second quarter, you can start firing people, bringing in your own people, working on the big integrations, because you built the trust in the team, and by that point you actually. So you're starting to really understand the company.

So then the other parts of working with a COO is what do I do now? And the party's over. So explain that.

What do I do now? So the what do I do now component is how do you really get the roles and responsibilities shifted to get the true leverage? How do you keep examining, almost like on a rolling quarter basis, what else can I be delegating? What else should I pull off their plates? Where do we need to get in sync? And then how do you really build the strong relationship between the COO and the rest of the executive leadership team? Because they have to start building out that team, building out the communication, building out the plans, and really kind of working through that forming, storming, norming, performing model. That's what's really starting to happen in that next phase. The party's over component comes to. At some point, every relationship starts to die, right? Whether the company outgrows someone. Like a marriage. Sometimes a marriage has a season. Maybe it's seven years, maybe it's 27 years when the marriage dies. You still have to honor what was there for the component when it was all really good. But maybe you just outgrew the other person. Maybe the company outgrew you. In my situation with Brian, we sat down one Thursday morning before our leadership team meeting. We were off site at the Vancouver Club where our team was meeting that day. And I ordered my traditional breakfast. Back then, when I was 40 pounds heavier, it was eggs Benedict with extra bacon. And Brian ordered grapefruit. And I was like, grapefruit? You've never ordered grapefruit in your life. I'VE known you for 10 years with grapefruit. What the hell are you thinking? And he started to cry and then I started to cry. And the night before I told his assistant, I said, brian's firing me tomorrow. She goes, shut up. Go home, hang out with your kids. But I just knew that the party was over. I knew that my skills had taken me as far as I could go. And for about the last eight to 12 months I was pulling my hair out. It was big, it was stressful. We'd gone from 14 employees to 3,100. From 12 cities to 330 cities, 4 countries, 13 operating p. Ls 248 people at the head office, 3,100 system wide. It was just fucking big. And I was way out of my depth. We'd hired a head of finance who was just smarter and more seasoned and more strategic and more mid sized company than I was. We hired a head of people. Helen Sheridan was the same. This head of our new call center was unbelievably strong. He'd been the head of the, the big banking call center and our head of it was fantastically strong. And I was just like, I'm that entrepreneurial guy. I'm not, I'm at the wrong party. And Brian was right. It took me years to get through it, to get over it, but he was right.

Okay, let's, let's talk about that for a minute. So.

Looking back with you and Brian, would there have been a knowing what you know now where you would have prepared for that because that moment's going to inevitably happen? I mean, has this happened with most companies where everyone's going to get to a shelf life or.

No, it was done in the wrong way. Brian was misadvised by the board and we've talked about it since and he has told me as much. The board said do it now, make it instant. He was my best man. We were going through brick walls for each other. We'd cried together. We'd helped each other through all of our really hard points in our lives. I'm not going to get into. But there was no fear of me doing anything wrong had Brian sat down with me privately and said, I think the party's over. Let's work through a transition. How do we get you out gracefully? We would have done what could have happened Anyway, I ended up going into the company a week later and doing my goodbye speech and I wrote a letter that Brian signed off on that we sent out system wide. But we could have done it that way instead of me having to go into the office the next morning and pack up my desk and wheel it out on top of my Herman Miller Aeron chair when this was the company that I'd bled for for six and a half years. Right. It was too painful of a way to say goodbye, and it took me a long time to get through that and him as well. You're friends with Rick Sapio? A week later, I was speaking to Austin, Dallas, and the Houston EO chapters. I'd just spoken to Austin, and I saw that Simon Sinek was going to be speaking in Dallas. And I sent him an article. Hey, looks like you're speaking to Dallas eo And he goes, yeah. I said, I'll see you there. He goes, no, they canceled you. I'm like, what do you mean? I'm just like. I'm flying there this morning. I'm speaking to three. He goes, no, Rick Sapio canceled you. I'm like, what? So I called Rick and he goes, why? Didn't think you'd be coming if you're not at Got Junk anymore. I'm like, no. Like, we're still friends. I'm just not the right guy. But there was a miscommunication on the way that it was handled. That was the painful part, but it was absolutely the right decision.

So to all the people, you know, the future CEOs, current ones, people watching this, what. What should they do to prepare for that?

So that it's like a divorce with your spouse. Remember that you're going to be talking to and around your kids for the next 20 years together, even though you're not married to the person anymore, Remember that you can do it in a nice way and still honor the relationship and the other human. Because there's humans and feelings, and then none of this shit actually matters. We all die anyway. So I think when you stay true to that, you can kind of work through it. Right? Brian knew me well enough to know that I wasn't going to damage the company. And a week later, he has me out speaking on behalf of the company anyway. There was no need to cut it as severely. Right? But he took the advice of the people who didn't know me, who didn't really understand all that we'd done to get there. And their advice was worthy, was worth listening to. But I think you also have to trust your gut.

Yeah. This is so much about just human relationships in general. I mean, everyone has an opinion on how you should. I mean, hell, that's what my book is about in A lot of ways. How do you actually do these relationships? So you can, you know, when there, when, when the. You can still have alignment in terms of goals and objectives and stuff, but just not have the, the talent and the skills to do it. Or you could have the talent and the skills, but just not the alignment. You know, there's a lot to be said on that.

So I think the big one is to remember that it's okay to make those cuts. Right. We had five members of our leadership team. The head of the call center got replaced. The head of franchise sales got replaced. The head of finance got replaced. The head of IT got replaced. I was the last one of that group of five to get replaced. It has to happen. You can't take a company from 2 million to 106 million and think that you still have the skills to keep scaling that. It's just a different beast. Right. I think Clayton Mask from infusionsoft says that a good senior level employee can only double the size of the company twice before. The third double is too hard. So you go from 2 million to 4, from 4 to 8, it's tough to get to 16. I got to 106. That was two additional doubles.

We just spent four hours together yesterday, me and Clay. Yeah, he was here, so. And yeah, I mean, I remember him also giving the Talk at my 100k group where he had this is several years ago where he's like, you know, people had told him, once you get to 100 million in revenue, every person that started with you is no longer going to be there. And he said that, you know, I could, you know, I have friends here, I have family, you know, I have just people that built the company with me from the very beginning. I can't imagine how they would not be there. And he said that was one of the hardest things for him to even wrap his head around while these seasoned experts in building very large, profitable companies were telling him that. But he's like, sure enough, when you got to that level. And it goes back to that line that Dan Sullivan says, skills to get you out of Egypt are not the same skills to get you to the promised land. And that's a tough one for me too, because I have people that have been with me for, from almost or the very beginning.

Right.

You know, my assistant Eunice has been with me like, you know, from the very beginning. But I have other team members that are, you know, been with me for 20 plus years.

And, and it's different for a team member versus someone managing parts of the business. Right. If you're managing a team of people, if you're the head of marketing for a $5 million company, it's hard for you to be the head of marketing at $100 million company. It's just different. Right?

Yeah.

The team you have is different. The skill sets are different, the budgets are bigger. That it's just different. Yeah. Ben Horowitz, who wrote the hard thing about hard things, says a mid level to senior level person can only go through one triple before the next triple is too hard. Right. So 10 million to 30, but 30 to 90 is impossible.

Right.

Or really, really hard.

I think a lot of people are not even aware that something like this exists. That if you hire a coo, you actually one of the things your company does is you train them. You train them to be less of training.

And we give them a community for them to learn from each other. Kind of shed their imposter syndrome, build the connections so they have a group of who's that they can reach out to as well, and they get skills as well. But I don't train them per se. Like we don't train or you don't train CEOs at the genius Network. You create a genius network.

Yeah, the connection network.

So, yeah, so there's just. There's so many networks for entrepreneurs, but COOs don't fit. And it's almost like if a whole bunch of women got together for a baby shower, we could go, but we don't. We don't really fit.

I think I would fit in pretty well.

I get my painted toes, I might be able to fit in a little bit, but do you know what I mean? It's just a different skill set and different need. So we just wanted to give them that community for them to learn with each other and from each other versus me sitting there and teaching them.

So what didn't we cover? Because now obviously get a copy of the second in command. This is. We'll give you a good roadmap on everything. I mean, we just touched on some of the things to think about, but the book will give you a bit of a roadmap. Other things have we not discussed that you think would be valuable?

There's a lot in the book about when you have one already, so it's not predicated on going out and finding one. There is a lot there. And I'm also finding there's a lot of COOs and operations people that are gaining value because they're seeing how the CEO counterpart thinks about this role and they're able to kind of adapt and learn that way as well, which I think is important. I don't know. We covered a lot.

Yeah. So what are the mistakes that people will make that will prevent them from leveraging themselves? Through a CEO, for one, never hiring one, never really developing and learning the skills. But the other. Any other mistakes that will sabotage this?

Yeah. Most good CEOs are already building a company somewhere. They're not out looking for a job. Like, they're not on industry job boards. They're not talking to search firms. They're not. Like, they're not out actively looking. You have to know what you're looking for and where those people hang out. And then have someone like Max's company go out and poach them is one way. You have to get a fantastic job posting written and have a copywriter polish that job posting. This is a weird one to me. Most companies. Well, all companies write job postings. It's usually the head of engineering writes an engineering job posting. The head of ops writes an ops job posting, whatever. Or they get an HR person. None of those people have been trained in copywriting. Take that job posting and give it to a copywriter. Have a copywriter polish it so it pops off. Treat it like a sales letter. Your job posting should be so polarizing that 50% of the people like, there's no way I want to work there. And the other 50% of people like, holy shit, I need this position.

Give me an example of, like, a polarizing sort of positioning.

Sure. Like in one of the job postings I did years ago, I said, this was for an executive assistant, but I said, an EA looking to work with a bipolar, you know, add, manic CEO who probably fucking swears more than he should. Oops, there's my first F bomb. Sorry about that. I'm looking for an EA who is less add, less bipolar, whatever. I had people coming back to me going, I can't believe you swore in a job posting. I'm like, delete. I had other people going like, I fucking love that you swore in a job posting. I'm like, oh, interesting. I wonder who you are. I don't like that. I swear. But at least I was so willing to put it out there. And that I'm ADD and bipolar and manic. Like, I throw it out there as, like, this is me, man. Because if I put on my best face, what are they going to learn? Like, 60 days in. Oh, shit. This guy's not who I thought he was. I want them to know exactly who I am and then them say, yeah, I fit with that. That's a good fit.

That's actually really good advice to let people know that you're an awful human being.

Okay, so how do people find out more about you and learn more if they want to.

You know, obviously read the book. But if they want to, you know, if they have a already second in command, they'd like them to. Where do they go?

So the main, the main website is the CameronHerald.com and it's H E R O L D or the c o oalliance.com and then all of my books, all six of my books are available on Amazon, Audible and itunes. And then the podcast, the second in command podcast, they should check out for sure.

Yeah. Awesome. And you're constantly coaching entrepreneurs and business owners and you've had some very successful, very large companies. What are people usually seeking you out for aside from this sort of stuff?

A lot of it is how to leverage company culture and how to actually create a really, truly world class company. Like I've coached two that went on to become number one to work for in Australia. One that was number two in the United States on Glassdoor the same year. Another one that went on to become number 12 in the United States on Glassdoor. Number one in Florida, number one in Cincinnati, number one in British Columbia the same year the number two in British Columbia, I built the number two company in Canada. So a lot of it is around culture, like truly, truly understanding how to leverage a company culture. That's probably a big one.

What are some things that you have done to hone your skills that because you've done a ton of stuff that have been more valuable than others. Like what are some of the just best dominoes or best decisions and things you've made that have really helped you either get better in some areas or learn how to deal and handle messes and chaos and craziness. Because there's, that's, that's what we sign up for when we're running a company.

Two parts of that. One is I really worked hard at my executive functioning skills. Like the course, the things that are in my investing your leaders course. I'm actually, I wouldn't say world class, but I'm certainly if it was a bronze, silver or gold. I'm like a silver gold, right? Not necessarily platinum, but I'm really fucking good at those 12 executive functioning skills which has really helped me to scale businesses. But the second one is, and you own one, a genius network. Like I've been in Mastermind community since 1995. Right. I did five years of EO. I've done seven, eight years of Genius Network. I'm at my eighth annual Genius Network event next week. I've been five years at Baby Bathwater, five years at OR, seven years in Strategic Coach, a couple of war rooms, five Mastermind Talks events. I've been deep into these Mastermind communities because I get to meet all these amazing people that my network. I'm not smart enough to know how to do this stuff, but I just realized that who can I kind of reach out to? And then I'm also there and I get inspired. Right? Like, I get fired up when I'm around all these really cool people doing really cool stuff. So that's probably a big one.

Last thing I'll ask you.

And you know, I learned that from, by the way, was Eben Pagan. So this was the way that I met you was through Yannick Silver. Yannick also introduced me to Eben Pagan. It was 2008, and Eben and I had dinner together at the James Beach Cafe in Santa Monica, Just the two of us having dinner. And we were talking about investing. He said, where are you investing? And I gave him my core stocks, some that I still buy to this day. And, you know, I had given my principles on buying these 10 core stocks and why I keep dollar cost averaging, blah, blah. So what about you? He goes, I invest in masterminds. I don't even know what masterminds were. I'm like, what do you mean? He said, well, if you put 200 grand into the market and you get a 15% return, you now have 230 grand. If I invest $200,000 into communities and masterminds and going to events with. With successful people, I get a 10x return on that. I'm like, what do you mean? He goes, well, I show up and I get introductions, I get new systems, I get new connections, I get new business deals. He goes, I can turn my 200 into 2 million while you're turning your 200 into 230. And it was a profound lesson for me. Yeah.

And he's right.

And he's a member of your Genius Network.

Well, Eben, currently we don't allow sort of riffraff like him. Andy Lala, you know, Annie Lala, his wife, who's way smarter, just for the record, and way better than Ebony. Yeah, yeah. Much more polite. Funnier actually, even too. It certainly dresses better than of it. But no, that's. That, that's really great advice. And that is. And it's true. It's true to the degree that the mastermind group or the entrepreneurial group is useful. It is true to the degree that you do anything with the relationships and you participate. Because, you know, I mean, it's like one of my books, Life gives to the giver. I mean if people show up to a group figuring out, oh, just how can I sell versus how can I contribute? It's the word, you know, because the people that always bitch like I didn't find that valuable.

It's because you weren't valuable or you weren't paying attention.

Yeah, yeah. So, so, and, and so the last thing I'll ask you when you have gotten really overwhelmed or really stressed out, the time where you said it took you a while to recover from the thing with Brian, how have you now learned with the ADD brain, which can go very dark, you know, and.

Yeah, very good.

And most people that are watching this, they understand you can be massively enthusiastic one moment and like life is, is the worst, you know, the next. It could be a roller coaster of emotional, you know, enthusiasm to massive depression. What have you found to, to, to resource yourself?

So I don't know if you know this, but Tim Ferriss wrote about one of my concepts called the emotional roller coaster, the entrepreneurial roller coaster in 2008. It's actually chapter 12 of my book Double Double on the highs and lows of CEOs. So I went through a clinical depression and a nervous breakdown in 2000 and then in 2008, nine weighed 42 pounds heavier than I do today, was smoking a lot, drinking too much, and I had to learn from some pretty big failures how to course correct on that. So now it's exercise, it's just being mindfulness. It's. I haven't had a drink in six and a half months, which is way different for me. I don't think you ever knew me not drinking. So yeah, it's those kinds of things. Doing yoga, going for walks, eating healthier, getting better sleep. And I'm not like super good at all this stuff. But like last night I had to get to the gym, I just had to get a workout in. And we live on the road, we're full time, 41 countries in the last two and a half years. That means like every two weeks I have to find a new gym, a new trainer, new yoga studio. But it's by being very mindful about that has been huge for me.

Yeah, that's good. Okay, anything else? Any final last words?

Good.

All right. Brother.

Thank you. Appreciate it.

As always, great talk. And so, second in command, Cameron Herold, unleash the power of your coo. Enjoy. Good luck, everyone.

Thank you.

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