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In today’s episode of the Second in Command podcast, we will be listening in on several people who joined a call to ask Cameron Herold questions about being a second in command, leadership, team management, finances and much more! This episode is packed full of value, so pay close attention and enjoy!
In This Conversation We Discuss:
- How and when to roll out your Vivid Vision® to your company
- When it is necessary to look for a COO
- How to identify and conduct the right meeting for your team
- Thoughts on the Great Resignation and its benefits
- Thoughts on giving equity to your employees
Resources:
Connect with Cameron: Website | LinkedIn
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
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The whole format is for anyone to be able to ask me questions about anything but leadership, operations, execution, and culture. I’m working on a new book about the CEO and COO relationship. If you want to ask about the course content I have in my Invest in Your Leaders course, which modules are most applicable, or get some of the nuggets from those modules, I’m happy to share. Any questions of any of you have, I will take them up. That will be the format. Hello from Estonia. I’m over in Estonia. I’m speaking at a conference called Mindvalley. Who got some questions to start us off?
My name is David Maxwell from Belfast, Northern Ireland. It is great to see everyone. I finished my Vivid Vision there on the 31st of May, 2022. I presented it to my team. We are a few weeks after Vivid Vision Day. My question is, outside of the norm, how have you shared Vivid Vision in the past outside the normal marketing channels?
The idea with sharing the Vivid Vision is that you want to get it socialized with your leadership and your management team first, share it with all of your employees second, roll it out to all of your suppliers and business partners third, roll it out to all of your customers forth, and sharing it to the wider audience of potential customers and potential employees fifth.
Every quarter, go back up to the top again and make sure the leadership team, managers, and frontline staff read the Vivid Vision again on a quarterly basis. That is the way I like to do it. I don’t want to put it on my website or email it to the list right away until I know that my team, employees, partners, lawyer, accountant, and everybody understands Vivid Vision. I will be able to roll it out on a much wider basis later.
Thank you very much.
I love Belfast. I was over there a couple of years ago. My kids did a whole bunch of Game of Thrones tours. I went in and met them. We flipped from Belfast down into the South and did another nice tour. I got family in Sligo, which is up near the North. Thomas, do you got a question?
In most businesses, when they start out, the owner, founders, and CEO are everybody else too. How do you know when you need to engage or get a COO?
Where are you calling in from?
I’m in New York.
It comes down to are you, as a leader, starting to get overwhelmed in a lot of the higher-impact areas of the business, the higher decision-making areas, and the areas that might need a more seasoned strategic or senior person to be able to execute on is one question. The second one is, do you have enough stuff on your plate that you need a second in command, or could you get an executive assistant first?
I have always said, “If you don’t have an executive assistant, you are one.” You need to first get all the administrative work off your plate that might buy you 6 to 12 months before you need a true second in command. The next part is, do you need a COO, a VP of operations, a director of operations, a general manager, or an operations manager? You might need a person as a second command to help you with stuff, but it might not necessarily require the COO title or the COO compensation pay. The bigger the title we give can lead people towards higher expectations and higher comp packages.
Your head of finance could be a director of finance, a VP of finance, a finance manager, or a CFO, the same with each of the functional areas. Be very careful with giving out titles too senior early. If you give out the COO title soon, the VP of operations doesn’t have a role they can jump into. It’s always nice to give them something to chase. Make sure that the compensation expectations are clear. If you only want to pay $140,000 a year, that is not a COO. That is more like a director of operations or, at best, a lower-paid VP of operations. Be careful with the title creep. Eric, do you got a question?
When do you bring in a fractional CFO?
In all companies, when you get north of $1 million or $2 million, you can’t afford a $200,000 CFO. You need to have someone other than your accountant looking at your business and financials to ask you some questions to give you some advice, but often to ask you questions to help you figure out the business or look at the business in a different way to help you optimize for more gross margin or net profit.
If you can pay that fractional CFO to look at your books and financials on a monthly basis and spend a couple of hours to give you some strategic questions, they might not even be able to give you advice, that can be powerful. You might be able to get somebody to bounce ideas around with to get them to ask some questions as well.
You say dollar value. What if it is the number of accountants you are managing? We are dealing with accountants in three different countries.
You got a team of accountants working for you.
We got separate outsourced accountants. One in the US, Israel, and India. We are trying to manage three different sets of taxes, sets of end-of-years, and sets of annual reports. Israel reporting is two years after the year is done. India is done from April through March, due September. US is January through December, due April. It is driving me nuts.
You are at the stage where you need a fractional CFO to help oversee that, or you need to simplify the business to get away from the complexity. If getting away from the complexity isn’t an option, you need to start bringing in that fractional CFO to oversee that. You can often get your accountant or your accounting firm to help you find and hire a fractional CFO.
Looking For A COO: You need to simplify the business to get away from the complexity. If getting away from the complexity isn’t an option, you need to start bringing in that fractional CFO to oversee things.
You may not have the bandwidth internally or the deep understanding of that business area to make a decision on whom to hire as a fractional CFO, but that is how I would approach it. If you need some fractional CFOs, I got a couple of good firms that have some great fractional CFOs. If you want to drop me an email, I will put my email. I’m happy to introduce you. I have been introduced to firms for years.
Thank you.
Basley, do you got a question?
I have a general question. I’m a new entrepreneur. I’m a young businessperson. I like to ask through your years of experience, what are the essential things to keep in mind as a COO? What would you tell yourself back when you were in your mid-twenties?
Basley, where are you calling in from?
I’m calling in from Toronto, Ontario.
I lived in Toronto before. I grew up in Sudbury. I know the market well. I will drop one of the chapters from my first book into the chat for you. It is called the Leadership Lessons to My Younger Self. These are all the lessons I wish I’d known when I was in my early-twenties that I now know now. These are lessons after building the companies I helped build. I journaled for a few months, twenty minutes a day, and I wrote down about 60 different lessons I wish I had known at a younger age. I shared that with you to read later.
Some of the advice I would try to give you is to make sure that you are always on the same page with the strategy and the vision of the CEO or the entrepreneur. Whomever you are working with, always get on the same page and make sure you have ways to stay on the same page so that you are aligned with their vision and strategy. Secondly is to remember that we all have stuff to work on. None of us have this figured out. A quick show of hands, physically put your hand up. If you are reading this and you somehow feel overwhelmed in your day-to-day, or you feel like an imposter day-to-day in your role, we all do.
Just because you are young doesn’t give you the ability to say, “I feel a cop-out because I’m young.” No, you feel like you are an imposter because we all feel like we are imposters at times in these roles. Every single day, everybody wakes up feeling like this is the biggest thing I have ever done. The third would be to always work on continually growing your skills and confidence as a leader. Our job as leaders is to grow our people’s skills and confidence. Our job with ourselves is to continue working on our confidence and skills. Keep that in mind.
How do you build this confidence? Do you practice habits? What are some things you would recommend for me to do to build this habit of confidence?
Some of it is practicing habits. If you set three goals for yourself, write down three things you accomplished. If you set three big projects for yourself that you are going to be working on, write down three projects you got accomplished, and you will feel good about those. If we are always driving toward the horizon, we are never going to be happy. If you drive towards the horizon and keep looking in the rearview mirror, you will often start to be happier and build some of that confidence. That is how I would be solving it or working on it.
The other one is to get yourself involved in mastermind groups. We got an organization called the COO Alliance. We have COOs, directors of operations, and VP of operations from seventeen countries that are members of the COO Alliance. They have calls with each other every single month. They have a Slack group where they share information every month. They have accountability groups where they meet with each other every month. The way they keep their confidence level up is with that peer group. Some members of the COO Alliance are on this call. It is good for them to have that peer group availability.
Thank you very much. All of you are awesome. Keep doing what you are doing.
Devin, do you got a question?
My name is Devin. I’m the CEO of a lighting manufacturing company. I started off with the president. It was him and me. After a few years of him transitioning from having a third party represent his product to now representing himself. My role has grown dramatically in the last couple of years. My goal is to help build him a foundation of operations so that he can scale his business.
He is also a founder and a president that likes to operate in the black or green. I’m struggling between my energies being pulled away from operations and focused on sales and marketing, but I’m trying to help him see the vision and the value in building a sound structure and foundation operationally. How do you navigate that with a founder who only sees numbers as being valuable, and helping them see the value and maybe pulling back a little bit so you can build the operation and when you scale, you can scale more quickly?
When they look at numbers, is it revenue and profit? Do they look at numbers like employee engagement and customer satisfaction?
Numbers in revenue.
They are focused on revenue. How many employees do you have now?
Six, and we are around $2 million a year.
When you go from 1 employee to 3, from 3 to 10, from 10 to 30, and from 30 to 100, those are the different inflection points. How old is the owner of the business?
55 in 2022.
When he was five years old, he was Bob. When he was fifteen, he was Bob. When he was 25, he was Bob. He is a different version of this human, but he would have been a horrible manager as a 15-year-old and a 25-year-old. He has had to evolve as himself. The company needs to start to evolve to continue to scale. If you are only focused on those numbers, you are missing the opportunity for leverage and operational efficiency. You are missing the opportunity to get more margin and revenue for the employee, and more customer engagement. It’s all about showing him that. Does he like to read?
Looking For A COO: If you are only focused on the numbers, you are missing the opportunity for leverage and operational efficiency.
Yes, if it is written in Hebrew. He is reading a book by Karl Marx.
There are some great books to read on where culture will drive an organization. If you can get videos, he can watch and listen to, that might be helpful. I would try to get him some exposure to some of that stuff so that he can see the bigger picture as well. My obsession has always been that if my employees are happy first and my customers are happy second, that is where the profit and revenue come from. The number one metric I measure over all other metrics is how happy my employees are. The number two metric that I measure is how happy are all my customers. He needs to flip that a little bit. If he is only focusing on the profit, the bottom line is he is missing the point.
Above everything, we value our service. Everything we do is always, how can we respond to people as quickly as possible? How can we provide them with the experience and service that goes above and beyond? My role and goal are trying to optimize our operations. We are being more efficient. Maybe not coming ahead with an issue and having to deal with it at the moment, but taking the time to think about it. We have considered the issue before it even occurs. When it comes up, we are prepared.
If you can put the systems in place that are easy to put in place that are going to help you with that, you win. I would also lean towards making sure your employees are happy before you provide better customer service. If your employees start getting overworked, they start feeling like, “Why is the customer important? What about me?” If they feel like all you care about is them, they are going to care about the customer. They are going to give you better customer service. You end up with that result.
Thank you.
Alok?
I’m Alok Mehta, Co-founder and COO of Brelyon. We are going down in an ambitious direction, where we are reinventing the VR headset experience without having to wear a headset. You talked about inflection points. We finished our seed around and closed our Series A. We are at a distinct inflection point. I was curious to understand more about the COO Alliance and the composition there. Does it span the early stage to Series B-type of companies? Some of the questions I had are different from a Series B-funded company. If you could speak to that, that would be great.
The purpose of the COO Alliance is to give the second in command a place for them to meet with each other because there are a bazillion groups for entrepreneurs. You got Techstars, YPO, Vistage, EO, Genius Network, Maverick, Baby Bathwater, and all these amazing groups for entrepreneurs. There are groups for lawyers, accountants, engineers, and doctors, but there was never a mastermind group or community exclusively for the second in command.
I recognized when I was the COO for 1-800-GOT-JUNK? that I needed a place to be with other COOs as I was scaling 1-800-GOT-JUNK? instead of being in more of these entrepreneurial communities. The makeup of it is you need to do at least $5 million in revenue or have raised $5 million in funding to qualify. If you have done a Series A or Series B and raised at least $5 million, or you are on the revenue number, you are on track to be large enough to join. Our biggest member is about a little over $1 billion in revenue, but the average size member is around $40 million in revenue.
Our youngest member is now 21. It used to be 26, but we have a 21-year-old COO of three different companies. Our oldest member is 62. We got about 40% women and 60% men. We have members from seventeen countries. We have a three-hour event online every month that is live online, where we have different themes and formats. We have guest speakers and breakout groups. You also are placed into an accountability group with 5 or 6 other members. You get to meet with them on a monthly basis. That small group of 5 or 6. That gives you the ability to exchange problems and work in that smaller group format with them.
We also have the Slack group where you get to share information and problems with each other to be able to help each other grow and share those resources. In addition, we also have two in-person events a year. We have one in September and April. Those are held in Arizona. That is where you can fly in and spend two and a half days in person with all the others COOs, but those are optional to the program.
Thank you so much for that. A quick follow-up to that, if you can maybe speak to the composition of hardware versus software, companies in that ecosystem were hardware companies initially.
About 25% are pure-played digital. 30% to 40% are pure offline businesses. We got a chain of restaurants and nursing homes. The rest are a hybrid, in which most companies now use some digital stuff. They are using apps and tech stocks. About 20 or 30 are pure-play digital companies. We got some digital agencies and brands. You know the name of. 15Five is a member of the COO Alliance. Redirect Health and College HUNKS Hauling Junk are members.
We got brands that people have seen and know. We have brands that you have never heard like Sunbrella Fabric. If we sit down on any outdoor furniture, and that Sunbrella brand is the fabric, their COO is a member. The largest Pizza Hut franchisor in the world is a member, their second in command. We got members from all over the world, from the Philippines, China, Fiji, and Barbados.
Thank you for that. I appreciate it.
Rica?
On my continual learning mission, what three podcasts or books would you recommend that every COO should read in addition to the COO Alliance Podcast that we should all be listening to?
Rica is a member of the COO Alliance. I love the Seconding Command show because it is our show, and we have interviewed amazing COOs from all over the world from some great brands. Subscribe and listen to the Second in Command show. I like the My First Million Podcast with Sam Parr and Shaan Puri. I love their thoughts on business, optimization, and growth. I love seeing they are forward-thinking and strategic. I get a lot of value out of their stuff. I pick and choose through some of Tim Ferriss’s episodes. He had done a good job with a lot of his stuff.
Operationally, I love some of Lewis Howes’ content. He does a great job with stuff around leadership and stuff that we can bring back into our teams. I love some of Jordan Harbinger‘s business guests. There is not a lot that is around the COO and operational depth. I do like the Second in Command show. We have 215 episodes of brands that you know, like Bumble, Shopify, the Cleveland Indians, and some cool brands and blockchains. Absorb that one.
Thank you.
Andy, do you got a question?
My question would be, in my role today as a COO. I have two founders that are hands-off in the business. I run a lot of the operations. My question is, what analytics or visualization techniques have you used successfully to show the founders what is happening and what is going on in the business? The business is successful, and we are doing well, but I wanted to make sure they have full visibility into my day-to-day in a strategic way. Do you have any advice there?
I’m going to ask the group about this one because I believe in the wisdom of the crowds. We got 50 people out there that are running businesses. Amber, you got some good thoughts about this. Matthew, I know you probably do as well. What are you using for dashboard software and business analytics software? Let’s see what everybody is using. Domo and Power BI are certainly going to come up a lot. Is anybody using any dashboard software?
The question is, what software do we need to represent the data that we have, and do we understand how to know what data to be reported inside of our businesses? Think about what car we drive around the city every day. Let’s say you drive a BMW 5 Series. You got a dashboard in front of you. If BMW’s computer put all of the data that it measured up on the dashboard, you would be overwhelmed because there would be too much data.
In the middle of the dashboard is this huge dial for speed. You look at that constantly as you are driving. In the bottom right-hand corner, slightly in your view, is this tiny little gas gauge that lights up orange or red. When you are below a quarter tank, it goes, “You are almost out of gas.” There is some other dashboard stuff there that you might need. It might light up if you need to know. What you need to know about your business is the same.
At your leadership team level, you don’t need all 300 data points to be represented for everybody. You need to have 2 or 3 from sales, operations, finance, marketing, and customer. You need your leadership team dashboard that rolls up. You need to have that dashboard displayed in such a way that you can see how you are doing against your goal and historicals. Are you green, yellow, or red against your goal or historicals? Who is responsible for that metric?
Let’s say that marketing is three metrics on the dashboard all show up as yellow in one week. You are going to sit down with marketing. You are going to open up the hood and look at all 30 metrics that marketing looks at. You don’t want to have all 30 of marketings, all 20 of ops, and all 17 to say. That is where most businesses go wrong. It doesn’t matter if you are using Power BI or Domo. If you are representing too much data, the wrong data, or all of the data is the same size and color, you are completely missing the point.
Thank you.
The other thing to think about with data is you are looking at predictive, lagging, or leading indicators. There are different kinds of data points you want to be looking at in your business. Gerard, do you got a question? Where are you calling in from?
I’m calling in from New York but I’m from Ireland. I am the COO at WayLeadr.com. The world’s leading parking management software. I have a question about structuring meetings. In your take, what is the best way to structure meetings and ensure that everyone sticks to that structure?
I did a call with a bunch of our COOs from the COO Alliance. We were talking about one of my books called Meeting Suck. I highly recommend that you have all of your leaders and managers read that book. I’m going to reference my course called Invest in Your Leaders. 1 of the 12 modules in Invest in Your Leaders is on how to run highly effective meetings and how to get people engaged in those meetings.
Meetings Suck: Turning One of the Most Loathed Elements of Business into One of the Most Valuable
When it comes to meetings, every meeting has a different purpose and outcome. You have your daily huddles, weekly leadership team meeting, one-on-one coaching meetings, financial review meeting, strategy meetings, quarterly meetings, and annual planning meetings. You have different kinds of meetings. It is hard to say, “How do you organize a meeting?” They are different. It is like saying, “How do I plan food? Is it dinner for four? Is it Thanksgiving dinner? Is it lunch for two kids before we scramble off to soccer practice?”
We need to understand what meeting we are talking about. What is the size of our organization? Who is coming to the meeting? What is the purpose of the meeting? It goes out from there. In the Invest in Your Leaders course and my book Meeting Suck, I give you the tools to run all of those types of meetings and how to get your employees engaged in meetings. I talk about the overall themes for meetings.
The overall themes for meetings are meetings have to start on time. Meetings have to stop five minutes prior to the scheduled ending time, which gives people time to walk down the hall, talk to their assistant, get a cup of coffee, go to the bathroom, and start the next phone call or meeting on time. I book all my meetings for half the time that I first think about booking them. If I book it for an hour, I book it for 30 minutes. Let’s get together for a day. I book it for half a day. I control the idle chatter. We have a moderator and a timekeeper in a parking lot.
I go through some of those meeting norms. I cover how to run each of those proper meetings. I also talk about how you engage the quieter, more analytical, and amiable people that often don’t say much when you got your sales guy talking over them all the time. It teaches you how to get people engaged. My rule of thumb is if you are inviting them to a meeting, they better be engaged, or you better be engaging them. Otherwise, don’t invite them to the meeting, and don’t waste their time. We talked a little bit about that in the book and also in the course too. Nathan, you are up.
First, thanks for the work you are doing, building this community, and doing the show. I appreciate it. I’m going to put you on the spot a little bit and maybe myself. I hope you will forgive me. My co-author and I are working on a book called How To Be Second. We are exploring the identity of the people who would show up on this call and the people whom you talk to all the time, and title or not, business or not, and the difference between in second in commands. I’m wondering if there is an opportunity to collaborate with you and even get an interview for our data. We already do, I’m fanboying, but we do a breakdown of the Second in Command show every other week in our newsletter and pull things from there anyway. That is my question.
Yes, there is a chance to collaborate. Ping me. I will give you my email address, Cameron@CameronHerold.com. I dropped the title for the book I’m working on. I have sent it off to the editors. It is about 200 pages. It is all around the seconding command and how to unleash the power of the COOs. I would happily be interviewed for your book.
We should also get some of our members of the COO Alliance to be there. We should even get you to content some of that. The idea of hiring a second command is one thing, but it is going to be lonely for them. How do we connect them with all the others? I’m happy to collaborate, talk to you, and be interviewed for the book.
Thank you so much.
Can you make sure that I get a copy of your newsletter? I love to be able to see the synopsis that you are doing. That would be cool.
Absolutely.
Considering you are in this space, if you want to set yourself up as an affiliate for our course, there might be an opportunity to even set you up as an affiliate to have you start marketing our course to your client list. I will send you the link to the course, but if that is of interest to you, we could talk about that offline.
It is on my list.
Next question. What are your thoughts on the Great Resignation? That was a question by Jerry Larson. It is about time that many employees quit working for crappy companies doing crappy jobs and having to drive 40 minutes there and 40 minutes back for the privilege. It is about time that they quit. It is going to be hard for average companies to survive because these employees are going to get to work for great companies based in other parts of the world.
I was talking to a company based in Ohio. He lost one of his key employees to a company based in Luxembourg. He didn’t even know where Luxembourg was. He had to look up where is this country where I lost an employee because the world is now flat, and COVID accelerated that. It is about time that we had the Great Resignation because a lot of people felt trapped working at average companies and saw no other way out.
I also think that there is a little bit of a swing back right now where employees also realize they don’t have all the cards because some of the big companies are doing some layoffs. That is healthy that we have the Great Resignation happening in times of maybe a bit of a recession coming, which at least balances out some of the equilibrium.
I heard a saying years ago that if the rate of change outside your business is greater than the rate of change inside your business, you are out of business. Think about that when it comes down to the Great Resignation. It is up to us right now to make the changes inside of our business so that we can attract and retain these great people versus having to react to it and think something is wrong. I think it is great, and it is about time. Devin, do you got a question?
Looking For A COO: If the rate of change outside your business is greater than the rate of change inside your business, you are out of business.
I’m trying to build more structure and foundation. What would your strategy be when you are constantly trying to grow new systems, and you are being met with a founder who is diverting you away from that, and in your effort to make weekly meetings or every other week meetings with the team and come to you and say, “Great idea, but throw that to the side. We are focusing on this now.” Having a culture where reprioritizing causes strategies to go to the wing side.
You are getting to the stage where the company needs to start evolving, and the company can’t be the way it was. You are moving from being a teenager to an adolescent. The company needs to evolve a little bit. Our job is to show the leader that it is time to evolve. I would caution you to be careful about systems for the sake of systems.
We need to put systems and processes in place that are easy to put in place, that allow us to make our employees and customers happier and make more money and profit. Otherwise, those systems can bog us down when we need to still be small and entrepreneurial. You are still a six-person company that can be nimble and entrepreneurial and wing it. You and he need to decide how entrepreneurial we need to be, how much bobbing and weaving we are going to do versus how much we can get more organizing systems. This is a bit of a balancing approach.
I have always said that throughout the outcome over process, at the end of the day, if I see a great employee whom I know I have to hire, F the interview process, I’m going to hire the great employee. Ray Dalio said, “If you see a snake in the grass, you don’t write an SOP, a system, or a playbook to kill the snake. You pick up a stick, and you bash it over the head.” Be careful not to be put in place.
I’m a big fan of systems. I built lots of franchise companies. I’m building 1-800-GOT-JUNK?, Gerber Auto Collision, Boyd Autobody, and College Pro Painters were all about systems, all about easy-to-execute systems, and systems allowed us to scale, but we would also short-circuit a system quickly if it allowed us to get to the outcome quickly.
I’m trying to put in place a touch base in connecting with the employees we have. It is important to make them feel valued by connecting with them on a weekly basis to say, “What is working? What is not? What can we celebrate? What are you struggling with?” I will have these on the calendar. He was like, “Clear your calendar for two weeks. You are not meeting with anybody. I need you to do this now.”
In the Invest in Your Leaders course, there are two modules that would be powerful for both you and your CEO to watch, is me teaching the content. The one is on doing coaching. It is how to coach your employees and how to do delegation. Here are the core modules that will be helpful for him, coaching, delegation, time management, project management, and one-on-one meetings. Those are 5 of the 12 modules in the course and even running effective meetings. It will be helpful for him and or you to devour that content because that is going to give you the foundational blocks to scale and keep it entrepreneurial as you do.
I appreciate that. Thanks.
Daniel, you got a question?
I’m the CEO of SnapSoft Limited which is a Hungarian software development agency of 70 people. I’m looking forward to hiring my first COO. I don’t have a COO. I’m doing the COO job now. What I would like to achieve is that hire him or her until the end of 2022. I would like to manage this from my network. That is my first point. Everybody is asking for equity, which is not a problem for me. I’m quite curious. Is this standard that you could hire a COO for equity or investing model? Would I be able to manage this for a pure salary? What would you recommend regarding that? I know that it is Hungary, and it is a different ballgame.
I have coached companies in 26 countries. I have also done paid speaking events on every single continent, including Antarctica. I’m comfortable working with clients around the world. You do not have to give out equity to get good employees. Gen Y has gotten good at asking. Gen X and Baby Boomers have got bad at saying no. We need to get better at saying, “No, I’m going to pay you fairly. I’m going to take care of you. I’m going to create a good company and culture.” You don’t have to give out equity.
Several years ago, prior to the rise of the dot-com era from the 1997 to 2000s, to get equity in a company, you had to buy it on a stock market. For most employees, there is never going to be an equity payout and transaction. There is not going to have enough that is going to be meaningful. What I try to do is pay people fairly for the work that I’m getting them to do. I try to build a company that can’t give out equity. I try to build a company that has good gross margins, good company culture and can pay people fairly. I’m more of the mindset of don’t give out equity unless you desperately need to.
When I left 1-800-GOT-JUNK? several years ago, Brian replaced me with the former President of Starbucks US. He came in for no equity for a solid remuneration package and no real long-term bonuses, but he got to build the second-best company in Canada, and he thought it was a cute little company. He was the former president of Starbucks US, and he came in for no equity. You don’t have to give out equity, but you have to build a damn good culture and an amazing place to work.
I have another question for you. This has been a dilemma. I’m always thinking about it. Sometimes, I don’t sleep. Maybe you can help me. We are working on a new auto system. It takes less than 90 seconds to steal any 2020 car. Car thefts have been over the roof because cars have become computers on wheels. We are working on automotive anti-theft. Here is the dilemma. As we offer a security product, I find it difficult when pitching it to Angels and other tech companies because of the strict confidentiality standards within our company. There is so much you can say.
I have a solid answer for this. I only give answers based on my experience of having done something or having worked with companies that have done those things. I never give an opinion. I have no experience working with early-stage pitching VCs. I’m going to respectfully say, “I don’t know. I can’t help you.” Anything I tell you would be an opinion. Opinions are like crap. We all got one, but I don’t think opinions are valid. I would go and talk to companies that have raised money in the tech space and ask them that question. You will get lots of experience, but it is dangerous to share opinions or give opinions.
Thank you.
Kiva?
You are better than all my substitute teachers growing up. They would jack up my name. Thanks.
Kiva is one of my favorite brands. I donate to a company called Kiva. It is an organization that helps entrepreneurs.
Thank you for all that you do. I consume all your resources. Meetings Suck is one of my favorite books. It has been interesting listening to everyone because I serve in more of a fractional capacity. I would say more of the DOO based on the company’s revenue sizes. It has primarily been online businesses, but it is interesting hearing some of the things that Devin has shared with others. They are the same problems. They are at smaller businesses.
I’m interested to know if you have a piece of advice for someone like myself. Most of my business owners are between $1 million and $5 million. Keeping them on track because it is like a squirrel. There are many of the same problems. We are not full-time employees and not fully in the business except maybe 40 to 60 hours a month. What would be something that you would share to keep them focused but also keep us moving the needle forward?
I used to have this stuffed squirrel. I got this taxidermy squirrel. I used to sit it behind me, over my shoulder when I was doing coaching calls. When the entrepreneur got dis-focused, I would move, and he would see a squirrel. It was hysterical. Matt, did I ever have the squirrel when I was coaching you?
No, I can’t remember. We spent so much time together. There are many stories.
Send me a note later. I will find the picture of that squirrel. It will be a good one to share on LinkedIn. I got a photo of this squirrel from behind me. Kiva, what I would do is a couple of things. One, I would have the entrepreneurs read the book Vivid Vision. It is something that will completely align and inspire the entire organization. It is being used by companies all over the world. It got 700 or 800 reviews on Amazon. It is well received.
Vivid Vision: A Remarkable Tool For Aligning Your Business Around a Shared Vision of the Future
It is all about getting them to describe their company three years from now as if it is completed three years from now. It becomes a 4 or 5-page written description of what their company looks like, acts like, and feels like three years in the future. When they describe their company that way, it helps the team to figure out how we can make that come true.
I will share with you an example of one. I will put the Vivid Vision for the COO Alliance here. This is the one I wrote several years ago. I wrote this and launched it several years ago, “On December 31st, 2022, this is what the COO Alliance will look and can feel like. In September and October, I will launch the 2025 Vivid Vision.” That is one tool.
The second one is to remind them that the more that they grow their employees, the more their company will grow, there to flip the org chart upside down. The CEO is at the bottom supporting the VPs, employees, and customers, not at the top telling them what to do and holding them accountable. This is another explanation as to why my course should be used by all of them. If they can grow the skills of their employees, the leadership skills, situational leadership skills, coaching skills, classroom teaching, and effective meetings. If they can focus on growing their people, their people will go through brick walls for them, and third, if they can care about their employees as humans.
Remember that every single one of those employees is struggling with something at home. They are struggling with a parent, a kid, a spouse, a pet, debt, and the human condition. If they can care about their people more than they care about the business, their people will care about the business way more than they do. Those are all a little bit counterintuitive, but I will be focusing on that. The last one will be to get them to focus on the critical few things versus the important many. There are a few core things that, if they focus on those, we will move the needle versus all the busy work that we tend to get bogged down with.
Thank you so much.
Where are you calling in from?
I’m in South Carolina at the beach because we work from anywhere.
I’m in Estonia now. I follow you. I’m there. Let’s go with Kevin.
I run a small cybersecurity consulting company. My question for you is, how do COOs see cybersecurity within the organization, the CISO, and what did they expect from the cybersecurity arm of the company? I know what the CEO thinks, “What does the COO see?”
I don’t know there either. It is something that I haven’t been that involved with. As I left operational life several years ago, I don’t think I have a good grasp on it. I will give you an answer that is similar in a way in terms of overall risk assessment for the company. What do we care about? What we care about is stacking up all the potential cybersecurity risks that we have, thinking about them as to, like, “What is the percentage chance that any of those are going to happen? What are the easy solutions to put in place that give us the highest return on our people, time, and money so that we are mostly protected?”
Good COOs will avoid complicated solutions, expensive solutions, and solutions for threats. We were told one time by a risk assessment company that we needed to have an earthquake and vibration-proof floor in our server room. We are like, “We are in junk removal, for god’s sake. If our servers go down and the building crashes, we are in junk removal. It is not like we have planes in the air. There is no brain surgery happening.” We decided not to spend the $70,000 on the earthquake and vibration-proof floor because the threat was minimal. There were other things that we thought were bigger threats. That is how they look at it.
Looking For A COO: Good COOs will avoid complicated and expensive solutions and solutions for threats.
I’m on the right track because what I do is to determine the risk levels. It may not be the easiest to knock off, but the most doable and important. Here is what is going to get you a return on your limited resources to spend on cybersecurity.
All of our companies have the same three inputs. We all have people and employees. We all have time, like days, weeks, and months, in front of us, and we all have money. Our job is to get the highest return on investment for each of those investments. How do we get the highest return on my people? How do I get the highest return on the number of days or months in front of us? How do I get the highest return on the money?
The key is to make the easiest decisions that stack up because I believe momentum creates momentum versus perfection. Somehow, we book this call only for 50 minutes, but I’m going to go for another four. We will wrap up a few minutes prior to the top of the hour. We got time for another couple of quick questions. We got time for Brandy and Jared, and we will wrap it up.
CEOs are, by nature, creative. They are often wonderful relationship builder people, but they can have a hard time letting go, especially founders/CEOs. I work for a company with cofounders. My CEO is a wonderful visionary, but in addition, it becomes a challenge sometimes to make sure the team is more solution focused. When the team runs into a problem, they will say, “I have this problem. Here you go, CEO, fix it for me.” She does. My role is to help break that. Do you have any advice to help me accelerate that so that we can get into a better spot?
It is similar to raising kids. When you are raising young children, you do everything for them. You pour the glass of juice and make every sandwich and egg. At some point, you are like, “Pick up your own toys. Put your own toys in the toy box. Make your own bed.” I used to teach them how to brush their teeth and how to take their own shower.
Our job is to grow our children to become happy, healthy, independent adults so that they can get out of the house. Our job as leaders are to do the same with the CEO. We have to grow the CEO’s skills to be a better executive, and chief energizing officer, better at delegating and growing people. Our job is to grow our employees. They can make decisions aligned with core values and core purpose within their budgets and have confidence in their decisions and support them. It is a skill.
I would get 3 to 5 of your managers going through the Invest in Your Leaders course. Anybody who is a COO, this is the stuff we talk about all the time at the COO Alliance. You should look at getting yourself involved in that. Tell the CEO to work at growing people, growing their confidence, growing their skills, and not doing it for them.
Several years ago, he was fifteen at the time. My son came to me and said, “Dad, can you make me an egg?” I said, “Yes, I can make you an egg.” I went out to the kitchen. I said, “Grab two eggs out of the fridge.” He goes, “I only want one egg.” I said, “I’m going to make you an egg. You are going to make me an egg.” He started laughing. I said, “Grab the frying pan. Put some butter in the frying pan about this much. Swirl it around. Here is how you crack an egg. Can you crack an egg?” I did it. We sat down and ate an egg together.
The next day I came in, and he was making an omelet from scratch. I’m like, “Where did you learn how to do an omelet?” He goes, “I knew you weren’t going to do it. I looked it up on YouTube.” I’m like, “Good for you.” We need to do that with our employees. To always do it is like making lunch for them until they are 35 years old. That gets old fast.
It is a challenge getting the team to do one thing and the CEO aligning. I appreciate that very much. Thank you.
Get the team and the CEO both going through the course. They will both learn how to coach and how to be coached. They will both learn about one-on-one coaching and delegation. There are some strong skills in there for both.
Thank you so much.
Gerard, you got a question?
Whenever you were at 1-800-GOT-JUNK?, Brian came two parts of an arrow ahead as COO and CEO. Whenever you had an ideological difference in certain things, do you have any anecdotal insights or thoughts briefly on how you work things out from those in an isolated scenario, for instance?
First off, Brian and I were best friends. We had an unfair advantage. We had been in a CEO mastermind group together for several years as part of the entrepreneur’s organization. He was the best man at my wedding several months before I joined him to start working with him as a COO. We had an extraordinary amount of trust and respect for each other. We were friends. We did crap together. We leaned back on that relationship a lot. We went for runs in the morning. We went for beers together. We hung out with each other’s families. We spent time together as people because we liked each other as people. We leaned heavily on that relationship.
We had some coaches. We worked with a couple of relationship coaches who worked with us on communication and rebuilding trust. We would do a lot of walks and talks where we would disconnect from the office and go for a walk. We go for runs together and disconnect. Leaning on trust and relationships is what we did most to get us through the tough times.
One of the other modules in the Invest in Your Leaders course is Conflict Management. It talks about how to manage conflict in a healthy way. Everybody hopefully, that was helpful for all of you. I wanted you to do it and ask me anything for all the amazing second in commands out there and COOs. Subscribe to this show. Look at joining the COO Alliance if you are a $5 million or greater. Check out the Invest in Your Leaders course. Most of all, remember none of this matters. We are all going to die. This is what we do to make money. Let’s have some fun along the journey because this is what we do to make a buck. Have fun, everybody.
Important Links
- Vivid Vision
- Brelyon
- 1-800-GOT-JUNK?
- My First Million Podcast
- Tim Ferriss’s Episodes – The Tim Ferriss Show
- Lewis Howes– School of Greatness Podcast
- Jordan Harbinger – The Jordan Harbinger Show Podcast
- WayLeadr.com
- Meeting Suck
- Invest in Your Leaders
- Cameron@CameronHerold.com
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