One of the hardest parts of building a business is hiring the right people. This becomes even more challenging when you’re looking to hire a second in command. You need someone you can trust on a deep level and someone who has the right skill set for the job. If you make the wrong hire in this area, it can be catastrophic for your business and ruin years of hard work. Today’s episode is a rebroadcast of an episode of the “Journey with Christian D. Evans” podcast, where Cameron discusses, among other things, the importance of hiring the right second in command.
In This Episode You’ll Learn:
- Why so many business owners make it so hard for themselves.
- Why the first 30 days are vital when hiring a new CFO.
- The importance of integrating your culture into a company following an acquisition.
Resources:
Connect with Cameron: Website | LinkedIn
Get Cameron’s latest book “Second in Command: Unleash the Power of your COO”
Subscribe to our YouTube channel – Second in Command Podcast on YouTube
Get Cameron’s online course: Invest In Your Leaders
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We have an incredible guest on. We are so excited about having him on. At the age of 35, he helped build his first $200 million company. By the age of 42, he engineered 1-800-GOT-JUNK? spectacular growth from $2 million to $106 million in revenue and 3,100 employees. He did that in six years. Are you going to read this blog? You bet your ass you’re going to. You’re probably going to share this with all your friends, family, and top leaders as well.
He has bestselling books Double Double and The Second in Command, coming out in January 2024, which we’re going to be diving in here shortly. Also, Meetings Suck, Vivid Vision, Free PR, and The Miracle Morning for Entrepreneurs. You probably already know who my next guest is, and I’m excited. He has been featured in nervous different places. He is the CEO and Founder of COO Alliance and Host of the Second in Command show. Please welcome my next guest, Cameron Herold. How you do, Cameron?
Good, Christian. Thanks for having me. I appreciate it. I’m looking forward to this.
I’m looking forward to it because we were vibing. Let’s start this show because we got to run with this. Let’s dive into it because you were saying some good things right before. You were saying how most leaders when we’re building these businesses, are not trained on certain things, and we do this 1,000 times a week. I’d love for you to unpack that. You mentioned certain twelve skills that people are not dialed in.
I’ll give you a bunch off the top of my head that almost every single person reading is probably struggling with, and they don’t realize they’re struggling with it. Every business owner, every manager runs meetings. We either attend meetings, hold Zoom meetings, hold in-person meetings, or do two-person or group phone calls, but we probably are in a meeting or running a meeting multiple times a day, and most of us have never been trained in running highly effective meetings.
Most managers, leaders, and owners have hired someone. Otherwise, we don’t even have a business. We’ve all hired someone and we’ve all done interviews, but have we ever been trained on how to do an interview, how to use open questions, close questions, the pregnant pause, torque, how to do reference checks, how to set up the room, how to reverse the sales process in the interview? Most of us know.
Most of us have to manage our time, but we’ve never had any training in time management or project management. Most of us have to get results through people, but we’ve had no training in coaching, delegation, or situational leadership. There are all these core skills that if we would grow our people, could grow our company.
I call it almost the Two-Ladders Approach to Business. I visualize every employee climbing up two ladders 40-foot ladders right beside each other. Their left hand and left foot are climbing up the skills ladder, and their right hand and right foot are climbing up the confidence ladder. You got to raise their skills and confidence, but if at any point in time, their confidence is shaking that ladder, they’re not going to grow any more skills. If at any time their skills are shaky, they lose confidence. Our job as leaders is to grow them. Most of us have no idea how to grow people.
Let’s dive into this a little bit further because you mentioned a few there like delegation, time management, coaching, and interview. You were telling me how you were asking some companies and like, “Where did you learn how to interview?” “From my boss.” “How did he learn how to interview?” “From figuring it out.” The reality is nobody figured the structure of it. There is a proper structure. There’s a wrong way of doing it and a right way of doing it. Please unpack that a little bit for us.
There’s a proper way to do everything. There’s a more efficient way to do everything. There’s an efficient way to walk, cut a chicken, blow a balloon up, and interview someone. I visualize most entrepreneurs like flies banging their heads on the window, “We’re going to try hard,” but all the flies end up dead on the windowsill. If you step back and look, there’s a door 6 feet to the right that’s wide open. Why don’t you turn and go out the door?
I’ve always looked for shortcuts. I’ve always looked for the cheat sheets. I’ve always looked for an easier path. For me, those shortcuts and easier paths tend to be the systems. I look for an easy-to-implement system. When we built 1-800-GOT-JUNK? as an example, we had to give every franchisee a very easy-to-implement system so they could scale their business with predictability. We simplified every system. What I try to do with entrepreneurs to teach them these skills or how to grow their employees and give their employees the skills.
Most of our audience is at mid-seven figures, $2 million, $3 million, $4 million, $5 million run rates, and they want to scale to that 8 or 9-figure, and they understand that. You mentioned a few things. Which ones should they focus on? Are there certain key focus points and say, “We got to focus on these, establish that, build that foundation, and then add the next layer and add the next?” Is it more of, “We’re going to put a percentage of our time and focus on each one of those?” What does that look like?
I launched a course called Invest in Your Leaders, which is all the core skills managers need to excel in their jobs. I put all the modules of the course in the order of impact. The first area that people need to be good at is what’s called Situational Leadership. It’s how to adapt your leadership style on a situation-by-situation basis for each of the people that report to you so you can coach them, manage them, problem solve, or delegate to them in the highest impact way in giving them what they need in terms of how to be led.
For example, when you were one year old, and you started walking, your parents cheered you on, and they were high-fiving you, and they called grandma and said, “Grandma, he walked. Christian walked.” That cheering you on gave you a lot of extra confidence to keep taking more steps, but does your mom cheer you on when she sees you walking? You’d be like, “Mom, this is weird.” They don’t cheer us on when we don’t need the cheering on.
There are employees that if you praise them on things, it’s stupid to praise them on stuff because they get it. They’re already good at it, but there are lots of other areas we don’t praise them on enough. It’s a real deeper understanding of how to adapt your leadership style. That’s the first one. The book, The One Minute Manager is based on the concept of situational leadership. It’s the core skill that every executive at Starbucks gets trained in every three months. They get more training in situational leadership every three months because they see it as so core.
The second is Coaching. A leader needs to be good at coaching employees in lots of areas of the business. Coaching them on time management, interviewing, handling conflict, delegation, using Slack, on their job, creating better designs, and whatever they do, but you need to understand how to coach someone. There’re systems around coaching. Most leaders suck at that.
Most businesses, when we’re starting to scale, have to delegate projects to people. If you’re not good at delegating a project and coaching the person you’ve delegated it to get a result, you tend to get stuck in doing it all on your own. It’s easier for me to do it. That’s because you suck at delegating, you suck at coaching, and you probably hired the wrong people. If we can get the core skills, you stack the skills, and you grow them out from there.
There’s so much there because you’re writing this next book that’s coming out on January 2nd, Second in Command. In many of your books and your content, and even your show, Second in Command, you talk about the importance of this position, specifically as a COO. I want to ask a bit about specifically interviewing that but also making sure you are identifying. Are they going to delegate? When you’re a CEO, and you have certain attributes, are you looking for someone that has different attributes so that there’s a synergy? Is it saying, “I want to delegate this 100%?” What does that look like?
The starting point is for the CEO to start to delegate everything except genius. Start getting all this stuff off your plate that drains you of energy and that you suck at. By the way, everyone who’s reading, before you hire a second in command, whether it’s an operations manager, a VP Ops, a GM, a president, or a COO, before you go out and hire that more seasoned senior person, make sure that you have an executive assistant first. If you don’t have an executive assistant, you are one. Get all the admin work off your plate first. Get all the lower-paid jobs off your plate first. Get all the $ 20-an-hour or $ 15-an-hour tasks off your plate to free up your time to be more strategic, lead people, and grow people.
Once you have to hire a second in command, it’s because you have a basket of things that need to get done. Those baskets of things start to point in the direction of an operational person. It’s all the stuff that you suck at but is going to leverage and scale the company. It’s then, “How do I look for somebody who matches my energy, who matches my core values, who matches my behavioral traits, but who approaches and sees business from a different perspective?” You don’t need someone who’s like you. You need someone who’s more of the yin and yang to you. Someone who’s the counterbalance to everything you’re good at, they don’t want to work on.
Finding The Right COO: You don’t need someone who’s like you. You need someone who’s more of the yin and yang to you, someone who’s the counterbalance to everything you’re good at.
What’s hard is that every entrepreneur is different. Some entrepreneurs are amazing at IT and finance. Some suck at it. Some entrepreneurs are amazing in sales and marketing. Some suck at it. Some entrepreneurs are very good at operations. Some suck at it. What you need to do is decide what you are good at. What do you love doing? How do you hire someone who can take all the stuff you suck at and drains you of energy, and that’s the stuff they love to do. There is that component, but there’s so much to unpack. That’s why I wrote the book finally called The Second in Command.
I’m trying to give people the tools to understand what you are looking for. How do you know what to look for? How do you interview and hire that person so that you’ve got the right person? Once you have them, how do you build that strong relationship, that true yin-and-yang partnership, so you can scale them and scale the company? How do you know when it’s time to replace them and bring in the next one? How do you know when the company has gotten to a point where it’s so big?
As for me, I was perfect from the $1 million to $100 million at 1-800-GOT-JUNK? but I would’ve been terrible to go from $100 million to $1 billion. Now, they brought in a former friend of mine four years after I left. He was the third COO. They hired someone. She was the wrong person. They brought the former President of Starbucks in. She was gone a year later.
Eric comes in. Eric has been amazing to go from $100 million to $400 million, but he would’ve been terrible in the $1 million to $100 million phase because I understood how to franchise and build culture and teams. He would’ve been horrible at that. It’s about how you find the right COO at the right time in your organization too.
There’s so much that goes into it and we’re hitting the tip of the iceberg. Let me ask you, when you find that there’s so much that goes into the hiring process, as a COO second in command. As you mentioned, EA, you need to have that Executive Assistant, and you want to make sure that this is an elongated process. I’ve been in the same situation where in many of our entrepreneurs, there’s this pain, and you’re like, “I can’t do this by myself,” so we hire in a rush.
Naturally, that’s one big red flag. You don’t need to do that. How do you make sure what the anticipation, the proper expectation regarding like the proper homework, maybe a 2 or 3-week process or maybe talking about having the COO talk to other leaders in your organization to ensure this person? You don’t want to be three months into this hire and all of a sudden, you start realizing you’re at square one. Everybody hates that experience.
The reason that most people take 90 days to know if they made the right hire is they suck at interviewing. If you understood how to do job interviews, understood how to profile a resume, understood how to put a couple of hoops in place for the process, understood how to use group interviews and the resume, and video interviews, if you understood that process, you’d have a higher prediction on who you were going to be hiring. It’s the same thing. It’s the blind leading the bang that I’m going to work harder. I’m going to learn from my mistakes.
Learn from everybody else’s mistakes. People have gone before you have already done all this stuff and figured it out. Instead of being that radically self-reliant and rugged individual that you can do it on your own and try and learn from failure, forget that. Learn from everybody else’s failures. Fast forward to your growth.
I learned that because the very first company I got involved in was called College Pro Painters. I was the franchisee of College Pro when I was 20 years old. College Pro went on to become the world’s largest residential house painting company, but every year, they had to train 800 franchisees. I was so terrified of failing that I memorized the 330-page operating manual and did everything it told me to do. I was so scared of failure that I did shortcuts. There’s almost a shortcut or a system for everything out there. Rather than trying to figure it out, I’ll do what the smart people are telling me.
I love that analogy by the way of the fly hitting the window. You see those flies and were like, “We’re smarter than that,” but the reality is we’re not. We keep doing that and we’re like, “There’s a door or window over here that’s wide open. Why don’t you do that?” I love that analogy, by the way.
There’s a family guy episode of this fly trying to get out the window, and they’re sitting on the couch going, “It’s over there.” They’re like trying to tell the fly where the window is. Business owners make it so hard for themselves, and I feel bad for them. I’m on this rant about growing your people and they’ll grow your business. It’s why I finally had to launch the course. My books don’t give enough of the content and ideas.
People can’t afford me as a coach, so it’s how do I give something out that’s priced so affordably. It’s irresponsible. I priced it at $750 a person, and they get lifetime access. If you’re not going to pay $750 to grow one of your employees, you should probably fire that employee, for real. If you’ve got an $80,000 person, that’s less than 1% of their salary. Pay 1% to grow them.
That makes perfect sense because you don’t know what you don’t know as the CEO, as those that are reading. To have someone come in like Cameron that has done extremely well, that is laying this out at a very micro level. My next question here is when you do hire, because, in your Second in Command book, you’re going to be talking a lot about the hiring process, but also that training system. When you do hire that person, what is the proper expectation? I’ve done this where I’ve hired someone, and I’m like, “Go figure it out.” I expected them to already know what I wanted, but I didn’t have that clear communication.
I learned from that obvious experience, and a lot of people do this. We still do that and make sure that there’s a plan of action, a process, and a system in place. For the next 90 days, we’re going to be meeting one-on-one. We’re going to be talking about this. We’re going to give you access to this. This is what you’re focused on. Reverse engineering that, and then, 90 days from here, you’re 100% rock-and-rolling. What does that look like?
First, it’s longer than 90 days. It usually takes 6 to 9 months for a senior executive to get up to speed enough that they feel grounded in the organization and that they’re true. Even the year mark where they feel like they feel comfortable. It’s like starting at a new school. You don’t feel like you fit in at a new school until you’re there for your 2nd or 3rd year. It’s very similar when you come into a bigger company because you don’t know all the people, the teams, the idiosyncrasies, the history, the culture, the core values, the customers, the language, and the TLAs, all the three-letter acronyms. You don’t have any of this IP.
The proper onboarding process of a senior executive is very different from an entry-level person. A senior executive that’s coming into a job, let’s say you’re hiring your COO. The first 30 days are for them to sit in and observe in as many meetings as they can. Watch the board meeting. Watch for leadership team meetings. Watch some call center meetings. Sit in on the marketing meetings. Sit in on some job interviews. Have a notebook, scribble down notes, and keep writing down notes of everything you see, concerns, and opportunities, almost like a 30-day SWOT analysis being done and say nothing.
Meet with every director and manager. Do skip level meetings, get to know people, who they are, what turns them on, what excites them, and what their passions are. Have coffees, lunches, and breakfasts with as many people as you can. The next 30 days, you’re taking all the areas you’ve observed, all the notes you wrote down in your notebook, and start stress testing all of those based on the highest order of impact. Take the projects you think could make the most impact on the company and go and ask people about what you see. “I saw this. I want to pick your brain. I was thinking of that. What do you think?”
Month two is all about stress testing, digging in, and learning more about some of your ideas and assumptions. In month three, you start pressing play on the execution side of things. You never make a recommendation on hiring anyone or firing anyone until month three because you don’t have enough industry IP yet. You don’t understand the company yet. You’re tending to rely on your biases or wanting to run and do something. You have to resist the urge as a senior person to make any of those decisions until the third month.
That right there is so important. What you’re saying is do not give them the driver’s seat until the third month because they are not in their head. Even though they may be skilled in that or whatever it may be, and they’ve been previous COO, the reality is they are not familiar with your ecosystem, culture, systems, process, etc. That’s a solid point. I appreciate you saying that.
They also haven’t built up enough trust. They haven’t done enough deposits into the relationship bank with all the people they need to have relationships with so that when they make the tough decision, they’re not the asshole. It’s the classic step monster idea. When a guy and a woman get remarried and all of a sudden, the woman becomes the step monster, it’s because she tends to over-parent too quickly, and the kids don’t have a good relationship of trust with her. She’s probably parenting correctly. She’s probably making all the right decisions in parenting, but there’s not enough of a relationship there to respect her. You need to work on the relationship and understand stuff first to understand the full picture. After you’ve built the relationship and trust, can you start to be the one who’s making decisions?
You’re killing me with these analogies. These are some solid analogies. I don’t know where you come up with them, but they’re spot on.
This is my whole world. That’s all I think about.
You’re very good at culture and I’m always intrigued because you mentioned skills and confidence and growing throughout your business. When you are scaling to 8 and 9, and you have 3,100 employees, you’re unable to build that dialed into each individual and know them at a very micro level. You have to rely on your 1st-tier, 2nd-tier, and 3rd-tier leaders a little. I’m curious, how do you integrate this culturally into the DNA of the company?
The core is to make sure you first craft a vivid vision that describes your company three years in the future. What does your company look, act, and feel like three years from now? It becomes a 4- or 5-page written description of what your company looks, acts, and feels like in the future. That becomes the starting point that you start to align people with, and you only hire people that are excited about that.
Second, you hire people and fire people based on core values. If people are breaking the core values, you get rid of them. When you’ve got people aligned with your core purpose, BHAG, core values, and vivid vision, it’s very easy to start having that cultural pull. Culture is not about the perks. It’s not about the free massages and the free lunch. It’s about that deep obsession with core purpose and goals, holding people accountable, praising the core values, and exhibiting that stuff. That’s what it’s based on. That’s the first part.
Finding The Right COO: Culture is not about the perks, the free massages and the free lunch. It’s about that deep obsession with core purpose and goals, holding people accountable, praising the core values, and exhibiting that stuff.
The second part is when you start firing people who are inside of your company because they’re not getting results and they break the core values. When you’re willing to make those tough decisions, it raises the bar. It raises the game where people are like, “I only want to work with A-players anyway.” If you let the C-players stay in your company, the A-players feel like they’re second-class citizens. Your A-players are racehorses, B-players are workhorses, C-players should go to the glue factory, and you have to look at getting rid of those seeds. That’s where culture starts to permeate from there.
With your experience being able to raise and scale many companies, how fast can you identify an A player? Can you identify that? In the interview process, you’re like, “This is not going to be a fit for cultural and value within the company?” Does it take a little bit, like 30 days or so? I’m curious about your experience.
If it takes 30 days, you suck at interviewing. It’s too important what we’re building to make a job offer and then waste 30 more days and start the process again after telling everybody else no. What I do is cast a big net. I bring in all the potential resumes that I can. I don’t look at a single resume. I email everybody back who sends a resume, and I say, “Thanks for your resume. I’m not going to read it yet. Please send me a 2 to 3-minute video of why you want to work here and how you can make the attached vivid vision come true.”
They’ll read the vivid vision, and they’re either going to love it or hate it, then they’re going to reply about that vivid vision. If I like the cultural fit of their video, then I’ll look at their resume to see if they have the skills to match some of the cultural fit. I’ll bring them into a group interview, and I’ll interview 4 to 7 of them at the same time over Zoom or in person to see who I vibe with and who the right cultural DNA is. Usually, 2 people rise to the top, and you don’t even interview the other 5.
You bring the two people in for the very in-depth SIDS interview, the skills interview, and then you can proceed from there. Most companies aren’t willing to do the work, so they say it’s hard to hire people. The other part is great employees are never going to go work for an average company. Let that sink in. If your company is only average, then at best, you’re looking at Bs and Cs. You’re not even close to looking at As.
By doing all these steps right there, almost 80% or 85% of people will weed themselves out. They will not do the video. They will not respond to your email. They will not do this stuff. It’s like, “Cool. Wonderful.” They didn’t take your time. You didn’t have to interview them. You didn’t take any of your energy. You didn’t have to look at their resumes either because you’re like, “It wasn’t a good fit.” They self-selected, which is cool.
Here’s an example. Years ago, I was recruiting an executive assistant. I wrote in the job posting, “Working for a very manic, slightly ADD executive assistant. I need a slightly less ADD, very process-focused EA.” 7 or 8 sentences later, it said, “At times, I’m fucking overwhelmed with whatever.” I go, “There it is, my first F-bomb,” but at least I get it out of the way. I had people replying going, “I can’t believe you swore in a job posting. I’d never worked for you.” Delete. “I can’t believe you swore. Why would you do that?” Delete. “I fucking love that you swore. You’d probably be an amazing boss to work with.” Who are you? Let me read more about you.
I don’t love that I swear, but if I try to hide who I am, they’re going to find out 90 days later too. I want them to know everything about me from day one, so I push half of them away and attract the other people like a magnet. As Steve Jobs used to say, when he would show the wooden prototype of the Mac, if he didn’t see the twinkle in their eyes, he didn’t bring them in to see if they had the skills because he didn’t care if they had the skills. I need people vibrating in their seats, and then those people, I’ll see if they have the skills. That’s where culture comes from.
That’s how we built 1-800-GOT-JUNK? We ranked as the number two company in all of Canada to work for. It’s because we obsess about scaling culture and hiring the right people who have the skills because they’ve done it before. I also don’t want to hire a bunch of MBAs that know how to do something. I want to hire someone who has done it before. I’m not looking for book theory. I’m not looking for, “I can do this.” Have you done it before? “No, but I can do it.” I need somebody who’s done it before, and most of those people are working somewhere. Most good employees already have a job. You need to go poach them.
Poach them, go out there, and hunt them. I like it because that’s what it comes down to. A-players want to attract other A-players. That’s awesome. I had this situation where I was talking to a friend of mine. He was running at about a $6 million run rate. He hired a COO. They were rocking and rolling. They were hitting. They were going to scale to mid-eight figures. I was like, “This is exciting. That’s awesome.” All of a sudden, the COO decided to find another position and another place. All of us and the CEO had to position very quickly and say, “What’s the system? What’s the process? I don’t even know her role. How’s this operating?” He had to take on that responsibility.
I want to ask because there are certain circumstances where you cannot control that. The COO, the second in command, does have a lot of operation systems. They’re pushing everything. I’m curious, how do you build systems around that? Whether documenting it, SOPs to ensure that when that does happen, when the unexpected happens to ensure that the ship is consistently moving forward.
You need to have the playbooks or SOPs in place for the critical few things but not for the important many. Everybody needs to have their top 5 or so things systemized, but I don’t need their other 80. The reality is when most new executives come in, they are going to do it their way anyway. They’re going to bring in new ideas, change, and SOPs. You need to have your critical few SOPs documented, but not the important many.
The second thing is you need to make sure that the leader is always growing their people. If the leader is in command and control, that’s when you have risk. If the leader is more servant and they’re trying to grow their people all the time, and the leader leaves, that’s okay because they’ve built a group of skilled people anyway. It’s more of a leadership role to make sure that they’re growing people and not in a command-and-control situation.
In that circumstance, the COO or CEO was were not preparing that second leadership because there was nobody there to fulfill. They didn’t know all the systems. They didn’t know all that stuff. That’s what happened there, and they should have realized that. You’re talking about the top five. What are those top five, would you say? Are those like SOPs or baseline things that they need?
It’s for you in your role. What are the top five? God forbid, if you quit your job or died tomorrow, we needed your show to keep going. What are the top five things that we need to make sure happen? You need to know that about every person. By the way, if the CEO doesn’t know what his direct reports are, the top five are, why did you hire them? You’re probably hiring them to do those top five things anyway. Do they have a system in place for those five things?
It’s very contextual and that’s why people should be consuming your content because that’s how they’re able to unpack that and say, “These are the top five things if I’m moving out now.” I met you in regard to you doing a cool interview with someone, and they were talking about M&A where you’re growing, you’re scaling through M&A, and there are other companies.
In this circumstance, I want to ask more of that conversation about when you’re acquiring a company underneath the mother company. There are other top leaders in that and sometimes the COO and the COO, there are SOPs and all this stuff, and there’s a lot of that integration that has to happen. I want to ask in regards to what that looks like, maybe integrating it properly? Do you recommend having a COO for each micro-organism for each company within a portfolio company? What does that look like?
Let’s say you’re talking about if you’re an entrepreneur and you’ve got five portfolio companies working for you. Each of those portfolio companies needs its own vivid vision. Each needs its own goals for the year. Each needs its own team in place, either fractional or full-time, running the system. There’s an old saying that if you try to sit on more than one toilet, it gets messy. Think of each business as a toilet. Sorry for the analogy, but it’s true. You need to have somebody running the team. Otherwise, nobody’s running anything.
Would you say that you need a CEO in each one of those or just an operator would be good?
You need a managing director, an operating director, or a VP Op, somebody who is in charge of that business but understands the vision of the company. They understand the core purpose of the company. They know the goals of the company. They know the budget they’ve been given, and then they can figure out how to make that happen.
It’s no different from a home builder who’s building 1 house or 5 houses on the same street or a whole subdivision. You don’t need a CEO for every house, but you need to have whatever moving parts you need for the size of the company and the scale that you’re growing to. You need to know what you’re building, why you’re building it, and what your budget is. Otherwise, if you’re building 1, 5, or 100 homes, the whole thing will go to shit.
Finding The Right COO: You don’t need a CEO for every house, but you need to have whatever moving parts you need for the size of the company and the scale that you’re growing to.
I love that you stay with your other books there and your other content at the baseline, the foundation, and building that and each incremental micro level because it’s so important. Let’s talk a bit about there’s another company. They’ve acquired a smaller company. That smaller company is doing eight figures. They have a CEO and a COO. The CEO sold the company, but the rest of the leadership wants to go with the mother company. The mother company has a COO, and the company that got acquired has got a COO as well.
That conversation, that dialogue, that integration of team, talking about culture and making sure that everything’s aligned, values, and vivid vision, I want to ask a bit about integrating that properly for the COO’s roles. Some people that have read this grow through M&A, and that is one of their conversations. How to make sure they structure that when they’re looking at a deal? That conversation needs to be had, “œIf we do go through this, how does that look like?”
I’ve got a number of clients that I’ve coached on this. A lot of our members of the COO Alliance have done M&A stuff. We’ve got our event in January, which is all about the M&A process and how to integrate your new acquisitions. The first thing that you need to focus on is not the systems. It’s not making sure they’re using the same software. It’s not the same accounting system. It’s not them showing up to the meetings. The first thing you need to integrate them into is your culture. It’s why you do what you do. It’s the history of how you got here. It’s your core purpose. It’s your BHAG. It’s your vivid vision.
It’s the obsession around core values. If they’re not aligned with all that, one by one, you have to get rid of them so that you have two groups that are completely aligned at the core. After you have that core, then you can work on the rebranding. Often, if I do an acquisition, it’ll be a tuck under acquisition. When we were building out Boyd Autobody in Canada and Gerber Auto Collision in the US, it became the largest collision repair chain in the world. Every time that Gerber acquired a chain of autobody shops, it would be Gerber Auto Collision the small and Master’s Autobody at Gerber Company. A year later, it would be Master Autobody at Gerber Company would be 50/50. A year later, it would be all Gerber.
You phase in the new brand over two years. The second thing is in months 6 to month 12, you fire half of the finance team. You get rid of some of the marketing managers. You get rid of some of the overlap in the businesses so you can go cashflow positive quite quickly on the acquisitions. It’s less about what software we got them and what systems we are using, and more about whether we can culturally align people. Can we get rid of the people that aren’t the right fit? Can we get rid of the waste?
Finding The Right COO: It’s less about what software we got them and what systems we are using, and more about whether we can culturally align people.
Is it a compromise of culture? We like these people’s culture. Let’s compromise on what that looks like, or is it more of like, this is the mother company, this is the culture, and we have to align. If you don’t align, we are getting rid. What does that look like? Is there a compromise or not?
I don’t think it’s a compromise. It’s an evolution. You evolve. I’m remarried, and my new wife is very different from my prior wife. It’s not like I compromised to be with her, but I eat healthier. I exercise more. I did breathwork this morning. Maybe I’m living healthier. Is that a compromise? No, I’m probably evolving. Have I given up some stuff that I used to do? Yeah, but I don’t see it as a compromise.
You don’t do the acquisition to compromise. You learn from them, and they learn from you, but there needs to be one clear core purpose, vivid vision, and org chart. There needs to be one clear set of core values. If you don’t buy into those, then you should leave. I’m not going to compromise my core values to keep Fred or to keep a new company. They’re either going to fit in, we’re going to get rid of them, or we’re going to get people who do fit in. You should never acquire a company that’s that socially different.
That leads to my next question because I have talked to some people. They love the finances of the company, the IP, their ecosystem, or whatever it may be that they’re buying. They see all the check marks, but I’ve also understood the culture is so important because you are investing a lot in that team, bringing those in, and you got to make sure that there’s that synergy. I’m curious about your experience advising so many companies doing that. How much emphasis do you put on finances versus the culture? Is it a 50/50 or 80% culture and 20% finances when you look at the whole acquisition?
When you’re looking at companies that are the $1 million to $10 million size, first and foremost, I can probably make all those acquisitions go cashflow positive within the first two years. I can flip it very quickly and walk you through how that’s done. That whole acquisition can go cashflow positive. What I’m trying to do is get rid of the dead rate and the cultural people that don’t fit in so I can then integrate so that we can get the real leverage. You’re never going to compromise on the core value side.
This is excellent. We talked a lot about this stuff, and this is very exciting. Is there anything that we should be saying or mentioning to our audience that we have not covered? We could dive deep into each one of these things. They need to reach out to you, invest, in your course and be part of what you got going on, but is there anything that we have not touched that we need to mention in here for our audience?
It’s the reality that our job is to get results through other people. Our job is to grow their skills to delegate more. It’s to inspire them more. I don’t think I’ve seen many leaders that praise people or thank their people enough. I don’t think I’ve found many leaders who raise their company like they would grow their children. If you only tell your employees once a month or once a quarter that you love them and appreciate them, how would that go with your spouse? Are you going to tell your wife once a year that you’re happy or once a quarter that you’re happy? Of course not.
It’s like a daily ongoing, and it’s specific. “Thank you for doing that. I appreciate this. I’m grateful for that.” Leaders need to do way more of that. Your to-do list shouldn’t be your to-do list. It should be my list of crap that needs to get done by somebody else list. It needs to get done, but not by you. The last part is none of these matters. We’re all going to die, and this is just what we do to make money. We got to have some fun along the way. This is just what we do to make money.
You talk a lot about intentionality, and we hear about culture, the hiring process, all this stuff, and it becomes almost that big elephant in the room. It’s like, how do we eat that? In your content, you’ll be able to micro-level it down for those individuals while being intentional. I love what you said in regard to the leadership. I wanted to step into this a bit because you bought in an amazing amount of culture to be able to scale these companies.
You have to develop the skills and the confidence. I’m curious, what did you do, Cameron, on a consistent basis in your leadership? I’m talking about your leadership with your people and building strong relationships with those people so they add that buy-in. They take ownership of their role and their position. They’re like, “I want to do this because I feel a good confidence with Cameron.”
One, I was the same person day in and day out at home and work. I was very consistent. There was no game face. There was no fake it until you make it. There was no business Cameron and at-home Cameron. I was just Cameron. When social media came around, I had my first Facebook account at 1-800-GOT-JUNK? in May 2007 because I was comfortable being open with who I was, “Here’s me.” There was a connection because I was approachable.
The second is to get to know your employees. Not where they went to school and what their skills are, but who are they? What are they scared of? What are they struggling with? At the end of the day, every single person is struggling with something. Do you know what that is? Do you empathize? Do you care? More often than not, the reason that they’re showing up late, they’re missing a project, or they’re not getting the work done is something’s overwhelming or hurting them. Do you give a crap? If you care, you’ll connect.
The last one is I always try to take something and make it a bit more than a business, a little bit less than a religion. I like to get into the zone of a cult. If I can focus on building that strong culture, it’s like a magnet. The last one is I fire my C-players so that I can spend time with my A-players. If I spend all my time with my underperforming low-culture people, it means I’m ignoring supposedly my best people.
When you’re talking about your leadership, building that relationship, being authentic, and being vulnerable with them, what were some moments where you were authentic and vulnerable with your people that you didn’t want to, but you knew that you needed to because it was a tough time? Maybe it was financial, in the business, it was like, “We may not get this,” or maybe someone got your best A-player to quit. In those tough situations, you had to be authentic and vulnerable, and you got more buy-in and saw incredible synergy with your people.
I’ve told my employees that I’m scared about specific things. I’ve told them I’m frustrated about specific things. I’ve told them that I was having issues where my mom passed away, my dad passed away, my kid was mucked up, or case after case where I’ve just been human. We’re all human. We’re all going through our crap. At work, if I’m supposed to know everything, then what am I hiring them for? I’m supposed to hire smart people. I don’t know how to do this stuff. I know how to align you and get out of your way, and they like that.
Do you have discernment, though? Are there certain things that are offline like, “I’m not going to talk about this?” or is it more of, “I’m just going to be Cameron Herold? This is who I am, 100%, regardless.
I don’t care. I paint my toenails. I have green toenails. Do I give a crap? Everything about me is transparent. I don’t need discernment. What I need is the human connection and to connect with them as people and realize, I don’t know how to do this, or I’ve blown this up. I try to create this no-blame environment. If something happens and goes wrong, no one’s at fault. No one’s to blame. I want us to find the system that’s missing or the system that’s broken. It’s okay for me to go, “I don’t know how to do this.” They go, “I do. I can help you find somebody. Do you want to brainstorm around that?” If I go, “I’m frustrated with this. What do you guys think?” they like being included in that.
That’s how you build that culture, that empowerment and cult structure. You mentioned empathy. I want to ask you, Cameron, throughout your journey, what was one skill that you had to work on tremendously that you did not like? It didn’t come naturally to you, but you are very proud of it now.
The thing that I’ve had to work on is that I think out loud. I don’t have quiet thoughts. I don’t have thoughts in my head. I communicate my thoughts, feelings, actions, and ideas. For my employees, that can be bewildering and overwhelming. I’ve had to learn that I need to sometimes slow down. I need to communicate to them, “I’m thinking out loud here. I’m making this up as I go. Let me go off the top of my head for a couple of minutes.” I’ve also had to realize and be very in tune with when I frustrate people because I can be, not as bad as Steve Jobs, but like, “Why did we do that? That sucks. I don’t like this.”
I realize there’s a person attached to that. I’ve worked hard at making sure that I confront the issue, not the person, “I like you, but I don’t like that project. I like you, but I don’t like the result. I like you, but this system sucks. I like you, but this is too wordy.” It’s by constantly praising, thanking, and making sure that they understand I like them, but there are things that they’re doing we need to work on. There are results that we’re getting that we need to change. I’ve got a Loom video that I’m going to be doing in about 5 minutes or 25 minutes to one of my team, and it’s to show him something that he got wrong. I’m going to use the video the way to illustrate the point.
I’ll be like, “I want to show you something. You made a mistake on this, but I love you. I want to illustrate a point over Loom. It’s going to be easier for me to share it this way and I’ll get it wrong if I type it,” and then I’ll show him. By me delivering it to him in that way, he at least realizes it’s a safe container and that he did something wrong, but it’s not his job at risk. You just fucking change it next time.
I love what you said there. I was going to ask you this because I always found this so interesting. When you are at an 8and 9-figure, you have a C-Suite level, and we know diversification is very important, diversity in thought, and so forth. However, that means there’s a difference of opinion in that situation. Sometimes you, at the end of the day, the CEO or the managing partner, whoever may be president, has to make a decision.
They all have to align and say, “We’re all going for that vivid vision.” That whole concept. My idea wasn’t picked, dang. As you mentioned, that’s very valuable and something you had to learn. Do you feel like you’re still learning that? Do you feel like that’s something that you had to become very attentive and become very aware of?
I learned that early on. I had 12 employees when I was 20 years old. I started my first operating company many years ago. That’s an old hat to me. It’s not the autocratic dictatorial, “It’s my way or the highway.” At times, I’m like, “That’s cool. I got all your ideas. Thanks for all the input. I’m going to make this decision,” or, “I got all your ideas. What do we think will be the decision?” I let them know if this is a consensus or a one-way unilateral decision. If they know that going in, then they’re okay with making that decision.
Sometimes it doesn’t need to be my decision. Sometimes I want the group to figure stuff out. If I decide to make the call, sometimes I go, “I’m making the call on this, but I’m also willing to live and die by the sword if I’m wrong or there’s another way.” I’m never obtuse and dictatorial about it, “It’s my company. We’re doing it this way.” There’s an art behind that. You just have to learn that.
Speaking of art, I’ve had situations where I had to talk tough with my team, but they appreciated it because they’re A-players and they raised the occasion, which I appreciate. However, there were some people. They are A-players that I had to come in and approach empathetically because I knew they were downtrodden. They were beat up, life hit them, whatever.
I’m curious, Cameron. With your experience being in tough situations, probably blood boils and heads hit. What do you do to help yourself make sure that you’re levelheaded when you’re coming in? Are there certain things that you put in boundaries? Maybe some breathing techniques, maybe certain things to make sure that you’re thinking logically, and that emotion doesn’t come too much, and you destroy the morale or the culture and the synergy?
There are a couple of things. One is that I remember the first two modules for my course are situational leadership and coaching. What you’re talking about applies to both of those two things. I tend to default back to this system I know how to use. It’s become the unconscious competence. The second part, for me, is I realize that if I do anything that destroys the energy of my group, it’s going to take a month to recover from that.
Finding The Right COO: If you do anything that destroys the energy of your group, it’s going to take a month to recover from that.
My role as the Chief Energizing Officer, CEO is I need to inspire and grow their confidence and skills, not get all pissy, rant, and rave. That doesn’t do anything. I need to look at what are the things that I’m doing. Am I raising the energy? Am I raising the confidence of the group? If I’m not, then I need to work on that. It’s become the unconscious confidence. Again, I’m always trying to build that cult. What would a cult leader do? Not yell at people. You somehow align and inspire them and then get out of their way.
I love this conversation because you’re knocking out some amazing stuff there. Cameron, I appreciate you being on here and you going out there and doing what you need to do. Being able to take all this information that you’ve learned from your own trials and errors and failures, but also amazing successes and now be able to help and impact so many people. Seeing the work you’re doing, I appreciate you being on our show. Cameron, those who want to reach out, need to optimize every aspect of what you said, and consume your content, how do they reach out to you? How do they be part of what you got going on?
The shortcut for this audience, for sure, should all be signing up a few of their managers for the Invest in Your Leaders course. That’s the no-brainer starting point for the price and for the skills that are covered. When you grow your people, they’ll grow your business. That would be first. All five of my books and my sixth book will be available on Amazon, Audible, and iTunes. Those were all out there.
For the starting point book for people, I would start with Vivid Vision as number one. Probably Double Double for number two. If you’re looking to hire that second command, then read The Second in Command book. Those would be my two starting points. If your company’s at least $5 million or greater and you have a second in command, take a look at the COO Alliance.
He’s got tons of content out there. Cameron, I appreciate you making emphasis on and being at the forefront of talking about this stuff because, again, we don’t know what we don’t know. Business owners don’t know what they don’t know. You’re in a situation where you’re focused on the wrong thing at the wrong time, in the wrong sequence.
What you’re saying is, “I’ve already been there, done that. I’m laying this out. I know exactly what the path looks like. You might as well learn from me instead of going out there and being the stupid fly on the wall.” Cameron, I always love you and appreciate you being on here. I always love to ask my guest before I let you go fully. Are there any last words of wisdom you’d like to share with our audience?
Remember that none of these matters. We’re all walking each other home. Have some fun along the journey. Have some fun, and remember, this is just what we do to make a buck.
Remember, paint your toenails. I love it. That is the Founder of COO Alliance and Host of Second in Command and so many other books, my friend, Cameron Herold. That is the episode. Until next time, be uncommon if you can.
