ATTN: CEOs doing > 5-50mil/year: Are you looking for the Yin to your Yang (or the Yang to your Yin)?
Your ideal COO is an extension of you – it’s the ONE relationship that most determines the fate of your business.
So if you know exactly what the different types of COOs are.
And you add Cameron Herold’s blueprint for attracting & retaining world-class talent…
Then you can find the perfect match to your visionary style & blow your market out of the water!
That’s exactly what Cameron Herold has boiled down to a consistent & repeatable science since literally 10x-ing 1-800-GOT-JUNK’s revenue beyond 100 million in annual recurring revenue – in less than 6 years.
Cameron delivers the entire framework to you in his trademark off-the-cuff style – but don’t blink with your ears – this episode gives away some major keys.
In This Conversation We Discuss:
- The core role of the COO/Second-in-Command and other related titles
- The ying-yang relationship between the CEO and COO
- Steps to hiring an ideal high-level COO
- KOLBE profiles and the importance of defining your results to knowing your work chemistry with your CEO and the employees around you
- The hiring and onboarding process and what traits to look out for
Get Cameron’s latest book: The 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
I would riff a little bit on the role of the COO and how to go out, recruit, hire, retain and onboard a great COO. I’ve been asked a lot over the years to help people with that. First off, a COO is the second in command to the CEO. It can have different titles. You could have a Director of Operations or a general manager, maybe a VP of Operations or perhaps a COO. The Chief Operations Officer tends to be the second in command to the CEO. Often you’ll have the second in command and they may play the CFO role or CMO role.
The reality is the COO takes on all of the roles that the CEO does not like or is not good at and they try to become almost that yin and yang partnership with the CEO. For definitions purposes on the show, let’s talk about the COO as the second in command. It’s title agnostic so you want to be careful with the titles that you give out in your organization. The higher the title is, the more the expectations that the person has of what their role is and also the compensation demands they start having as well. Be careful with giving around titles that are too big too soon.
You want your second in command to be able to earn some of those titles. If you’re a smaller company with $1 million or $2 million in revenue, give them a Director of Operations title first. If you get yourself to the $5 to $10 million range, you give them a VP of Operations and then they can earn the COO by hitting certain objectives or metrics or taking on more responsibilities.
That’s what we’re talking about. Be careful with the title that you give out. Remember, years ago to have a C-level title, you had to be a major player at a major corporation. Nowadays, we’ve gotten a lot of inflation where you might have a fifteen-person company and you’re starting to be about C-level titles. You often are giving them out way too early.
That’s the history of the COO roles that tend to be back in the day when you were with a major company and you had to earn those titles. Now we tend to give those out a bit too soon. Years ago, I was speaking at a Verne Harnish event and this was a Gazelle’s event that was being hosted in Atlanta, Georgia.
I came off stage and Kevin Lawrence came walking up to me and said, “You’re Cameron.” I said, “Yes.” He said, “I didn’t realize that a Cameron wasn’t a thing.” I said, “What are you talking about?” He said, “I thought a Cameron was like a BHAG or a vivid vision. I didn’t realize that it was a person.” I said, “What are you talking about?” He goes, “Everybody at this conference has been walking around saying, ‘I need a Cameron.’ I realized they were talking about you.”
What had happened was over the years when Brian, who is the Founder of 1-800-GOT-JUNK? and myself as the COO had taken the company from 12 employees up to 3,000 employees, we’d gained quite the reputation as that two in a box, the CEO and COO person. I had been that second in command and people wanted to have someone like me in the organization. I left there several years ago. My compensation, for the year that I left, was around $310,000.
That’s the role of what a COO is usually getting paid. I was plus $300,000 and that was years ago. Be careful with giving out titles that are a little bit too big and make sure that they tie in with the roles and responsibilities. When I was the COO at 1-800-GOT-JUNK?, at the time when I was leaving the organization, I ran everything in the company except IT and finance. The call center, sales, franchise sales, PR departments, national account sales, franchising operations and corporate operations in all of our US, Canadian, Australian and UK franchises were all reporting to me. There were a lot of operational scopes. Brian ran IT and finance and I reported to Brian as his COO.
Before you hire a COO, remember that often what you’re doing as an entrepreneur is you’re trying to get a lot of the tasks and administrivia off your plate. If you don’t have a true second in command yet, the first thing you want to make sure you hire is an executive assistant. If you don’t have an EA or an executive assistant, you are one. Think about making sure that you hire an executive assistant first. After you get all the administrative work off your plate, then you can try to get some of the higher-level projects and higher-level roles and responsibilities into a true second in command.
The second in command is also a real yin and yang partnership where you want to make sure that it’s a true partnership. There’s a lot of trust between the two people. There’s a lot of strong communication happening between those two roles and it’s the most critical role inside the organization.
The COO’s job is to make the CEO iconic and the CEO’s job is to make sure that all the employees like the COO when the COO is having to roll out all the tough decisions and the bad decisions. Harvard wrote an article years ago called the Misunderstood Role of the COO. It’s a great article if you want to Google it and they talk about the seven distinct types of Chief Operating Officers.
If I try to remember more, there was the air apparent so that’s the person who will eventually be taking over the CEO role or there was the MVP, the Most Valuable Player on the team pushed into that role or there was a change agent, somebody who had to change the entire organization. Sometimes it is the partner. Sometimes it’s the executor, the person who can make sure they get stuff done. That’s what’s different about the COO. It’s very different in each company as to what the real roles are of that COO.
You are truly the yin and yang partnership with the CEO but the role can also be different. In any organization, sometimes the COO is very inward-facing. They’re looking at operations, execution and all the SOPs and playbooks. They’re keeping an eye on metrics and dashboards. Sometimes it’s very outward facing where maybe they’re focusing more on the sales, marketing, PR, branding, reach and culture of the organization.
Sometimes it’s very employee-focused and sometimes engineering or technology focused. The COO has IT reporting to it and in some cases, they don’t. Sometimes the COO has finance reporting to it and sometimes they don’t. Sometimes it has sales and marketing to it. It’s because of that yin and yang partnership but the role begins to get so different in each of the organizations.
A friend of mine, Harley Finkelstein, is the COO for Shopify. Harley’s very outward-facing. He’s very sales, marketing and business development. In other cases, they’re COOs who don’t do any sales and marketing whatsoever. They’re very inward. Facing Erik Church at 1-800-GOT-JUNK would be a very inward-facing COO who’s all about operations and execution and the corporate ops of the company whereas Brian would still lead a lot of the sales, marketing and outreach of the organization.
COO Job Postings
That’s how the role starts to set itself up. When you’re going out to recruit your second in command, you need to think about what role are they playing. I encourage you to read that Harvard article, Misunderstood Role of the COO and think about how would you describe your COO in terms of the fit with you. What are the core roles and responsibilities that they’re going to be responsible for? Put in the actual job posting and what areas they are not responsible for and the areas that will report to you. There’s a lot of clarity around jobs, roles and responsibilities so the COO candidates know what they’re signing up for.
You also want to make sure that you have very measurable, tangible outputs that they’re responsible for so they can see what it is they’re signing up for, what it is that they’re going to be responsible for and how they’re going to be measured in their success. I also believe that you need to engage an executive search firm to help you poach COOs.
In no case is a COO out there looking for a job. Most COOs are already running a company. They’re already actively engaged and happy with what they’re doing in their job. You need to get an executive search firm to go out there and help you poach the actual people and bring them in for the job. I also like getting the job posting rewritten by a copywriting firm. Get a great copywriter to take your job posting and make it pop off the page so that it polarizes.
It should pull the right candidates into your organization and also push some of the wrong candidates away from the job as well. You want to make sure that the candidates see themselves in the job or they go, “There’s no way I would want to have anything to do with that organization.” That’s why you want to get a copywriter to help you with that. The real idea here is to polarize that you only attract the right candidates and you’re pushing the wrong ones away.
You also want to make sure in your interviewing stages that you’re looking for a few things. The first thing you’re looking for is a strong culture fit with the CEO, the leadership team and the rest of the organization. Make sure that this person is not going to cause any major ripples when they come into the organization.
Any major new team member that you bring into your company, they’ll get the job done but they’re also going to cause some negative ripple effects and good ripple effects. It’s like the butterfly effect. You want to make sure that the culture fit is strong before you bring that person into the organization so that they don’t upset the culture that you’re building.
You want to make sure that they have the right personality profile to sync with the CEO. One of the personality profiles that I’m a big fan of is the Kolbe A profile, which shows you the way that the person likes to start projects or initiate things. We have all of our members of the COO Alliance fill out a Kolbe profile and we also have their CEO complete the Kolbe A profile.
What’s interesting about most entrepreneurial CEOs is they have a very high third number and they’re called a quick start. Kolbe is a series of four numbers. Mine happens to be 4393. I’m very entrepreneurial and very much a quick start. Even though I was very operational in my time at 1-800-GOT-JUNK, I’m a bit of an anomaly. I wouldn’t be a great COO for most companies. I’m very good in the early stage but I was exceptional at 1-800-GOT-JUNK because it was the third franchise company that I’d built.
Most COOs have very high first two numbers. 1) The first number is what they call a fact finder. That’s a person who likes to ask a lot of questions before they start or initiate a project. They are into finding out all the facts. An entrepreneurial CEO might say, “We should do this.” True fact-finding, the COO will come in with 7, 8 or 9 questions to uncover more insights and get inside the why and what the CEOs looking for so that when they start the project, they don’t need to come back and ask more.
2) The second number is what’s called follow-through. It’s a bit misnamed. It should be called a systems person. That second high number is someone who likes to put a system in place, a playbook in place or even a checklist before they’ll start the project. That’s critical in the COO’s role. 3) You want people who think in terms of understanding the full project that they understand how everything syncs together and how they’re going to be able to put the systems in place or the company can so that things can scale for automation and optimization.
4) The high fourth number is someone who likes to have all of the models or the tools in place before they start a project. I like doing a Kolbe A profile as part of the interview process for COOs to make sure that they have very high first two numbers and then sometimes even get Kolbe to do a match between the CEO and COO to see how they feel that fit is. That’s one of the ways I try to assess the personality fit with each other.
You’re looking for a COO who isn’t exactly like the CEO, that you get along with, you want to hang out with and you’ve got similar hobbies. You certainly would like to hang out and have beers or lunch together. You’re not looking for someone who’s exactly like you. In terms of hiring, when you’re bringing a COO into the organization, you’re going to want to get several people from different business areas to interview the candidates or the final candidates as well because you’re looking for that culture fit, the skillset and the person has done what you need them to do.
When you’re hiring a COO, be very weary of hiring a bunch of MBAs who might have the theory of doing things but haven’t done it. I like to err in the favor of people who have done it before. If I have a list of the core projects that we need to get done in the first year, the CEO candidates that I’m bringing in have done that work before, are good at doing it and you can predict pretty carefully that they’re going to be able to do that again. I make sure that we screen for that in the interviewing and the hiring process as well.
In the onboarding, what you want to make sure you’re doing when you’re bringing that COO candidate into the organization is keeping your eye on the ripple effects. Keep your eye very carefully on every project that they put in place and any of the good ripples or the bad ripples that they cause. Keep an eye open for any of the discussions that they’re having with other team members and any of the good or negative ripple effects that they’re causing.
Don’t focus exclusively on making sure that they get up to speed. They will. They’re a great hire. You’ve hired somebody solid. You’ve hired someone who’s a good culture fit and has the skills to do what you need them to do. They’re going to get up to speed. Your job is to also take a look at some of the ripple effects that they will cause throughout the organization as well.
I remember a COO that I interviewed on our show, Matt, who is the COO of a company called Rippling. He was the COO of a company and he wrote a three-page Word document that was the user manual to him and it taught all of his direct reports about the good sides and the bad sides of Matt. It taught them how he worked with each other, things that he demanded, what would drive him crazy, what would piss him off, how to communicate with him and how to gain insights from him.
It was a great insight that if you’re bringing on a COO into your organization, imagine if they wrote a user manual for themselves and they distributed that out to the company and out to their direct reports to get everyone up to speed earlier so they knew more about that COO and how to work with them, instead of having to learn that over the next six months.
The next part you want to make sure of is having clear roles and responsibilities and clear reporting everyone knows who’s reporting to the COO and CEO, what key metrics they’re responsible for and any of the responsibilities that they have in their day-to-day lives as well. The way that you’re going to best leverage a COO is to be gaining their insights and comments along the way to allow them to save the CEO from themselves.
CEOs by nature are perpetual motion machines. They have tons of ideas. They’re always creating these new ideas. The CEO’s job is to ask questions and put the systems in place to decide when to put those ideas in place, start those new projects, how to best put those new projects in place and how to get the projects up to speed without taking up a ton of resources or distracting the team and the company from all of the other competing priorities.
You want to leverage the COO by allowing them to help slow things down so that all of the projects are built in the right order. If you think about building a home, for example, everyone wants to put in the beautiful wolf stove and the sub-zero fridge and put up the beautiful cabinets in the kitchen. The reality is you have to put the foundation in first and then the walls. After you put in the walls, you put in the electrical and the plumbing. If we’re focused on getting that new sub-zero fridge put in, you might put it in six months before it’s supposed to be there.
Often what the role of the COO is to figure out which projects to put in place first and which projects to get done and out the door. I call it minimum viable everything so that the momentum creates more momentum. You don’t take up a lot of time, people and money to get a lot of these projects up to speed and out the door. The role of that COO is to help figure that out, recruit people and grow people inside the organization and make sure that you get more done with fewer people faster than the role of that COO.
As the COO and CEO, we make sure that we have meetings to stay in sync, almost like a date night idea. I remember years ago when I was cofounding a franchising group for an autobody chain. We are building out a chain called Boyd Autobody in Canada and Coast to Coast Collision Centers in Canada. It’s now called Gerber Auto Collision in the US. At the time, Terry was the CEO.
I said to Terry that I wanted to have a weekly meeting with him for a half hour. He said, “I don’t need one.” I said “No, I need one. I need time with you to talk about any of my frustrations, our growth and any problems that I’m having to brainstorm and even to stay in sync.” The role of that meeting between the CEO and COO is to allow you to stay in sync. During the week, you don’t keep sending each other stream after stream of messages or slack messages, emails or voicemail messages. You are spending time on a weekly basis to go through all of your ideas and problems and work through them together and have that regular pulse.
I always like to have time to get out of the office together. As the CEO and COO, you get out of the office and spend a little time together building that relationship and more trust and staying in sync. It is all about having that clear communication and trust between the two. One of the core roles of the COO is to also tell the CEO when they’re not doing the right thing and the CEO is making mistakes.
One of the COO’s roles is to show the CEO the blind spots that they may have but to do it in a way that doesn’t destroy trust in the organization. The key is to be able to do it behind the scenes, either at your weekly meeting or when you’re offsite working together but do it in a way that you are doing it one-on-one with the CEO so they know that you’re almost the person that’s saying, ” The emperor has no close.”
You might be the only person in the organization who’s ever going to tell them what’s going wrong but they need to hear that. They just don’t want you doing that in front of the board or the rest of the members of the leadership team but they do want to trust that you’re also going to tell them the bad stuff as much as the good stuff as well.
COO Career And Professional Development
I believe that one of the core roles of the COO is to grow people. I launched a course called Invest in Your Leaders. As a COO, the more I invest in growing my manager’s and leadership team’s skills, the more they’ll grow the company. The COO needs to constantly be thinking about what skills the people need over the next twelve months to get all these projects completed. What skills are we going to need to develop as the company grows? As you go from 30 people to 100 or from 100 to 300, what new skills are they going to need throughout the organization?
Making sure that you’re building those skillsets and capacities across your teams is critical for the COO to think about. The COO’s job is to shine the spotlight on the CEO to make them look good. I used to say that my job at 1-800-GOT-JUNK was to make Brian iconic. My job was to take the bad decisions and roll them out, to be the one rolling out the tough decisions, be the hard ass and the person saying no when Brian was able to say yes and be the iconic person inside the organization.
Brian’s job, our CEO, is to shine the spotlight on the COO to make them look good when we are doing that tough stuff and rolling out the harder decisions. When you need to think about your growth, at some point, everybody has to be replaced. Unless the person continually raises their skills, at some point, the company might be bigger than they’ve ever been able to manage.
This is usually true in a hyper-growth company. If you’re only growing by 5% or 7% a year, people can pretty much stay in their jobs forever because their skills will increase at the same rate that the company is growing. As we were at 1-800-GOT-JUNK, it was 6 consecutive times of 100% revenue growth. We had 100% growth year after year for 6 consecutive years. At some point, the company had outgrown my skills and that was six and a half-year mark.
Brian had to pull me aside and say, “You were the right guy to get us from $2 million to $100 million but you’re not the right guy to go from $100 million to the billion.” It was the right decision to look to bring on the next COO into the organization. They ended up replacing me with the former president of Starbucks. She came in and said, “What a cute little company.” Meanwhile, I was pulling my hair out thinking that it was a massive company that I was trying to run.
It turns out she was the wrong fit. She was not the right culture fit for the organization, which I go back to at the beginning. That is critical that you bring somebody in who’s the right culture fit and the right skillset. Now, they have found somebody whom I’ve known for many years as their new COO. He is been there for several years and has taken them from about $100 million up to about $400 million. His name’s Erik Church, the COO. He would’ve been terrible from the $2 million mark to the $100 million where I was but he was the right person to go from the $100 million to the $400 million.
It’s all about having the right skillset, trust, communication and culture fit in the organization and knowing when you need to top grade and bring on the next person into the organization. Those are some thoughts for you. I thought I would riff a little bit on some of my thoughts on the COO, how to recruit one and how to bring them into your organization.
If you have questions or comments about this stuff, you can ping me on Facebook or LinkedIn or email me at Cameron@CameronHerold.com. Hopefully, you like this show. If you want to like, subscribe and share it with your friends on iTunes, that would be great. Check out the Invest in Your Leaders Course. It’s at InvestInYourLeaders.com. Also, check out the COO Alliance and the CameronHerold.com websites as well. Thanks very much. I hope that was valuable for all of you. If you want to like, subscribe and share the show, that would be great. Hopefully, we’ll see you inside the Invest in Your Leaders Course or the CEO Alliance soon.