Our guest today is Entrepreneur’s Organization’s Chief Operating Officer, Deborah Rainey.
Deborah has over 15 years of experience in non-profits. She has held leadership positions at Conservation International, transforming the grants and contracts function, focusing on centralizing management of US programs, and providing support to field programs in 30 countries.
Deborah also held a leadership position at the Red Cross, providing oversight and leadership to the grants management and donor strategy programs where she was responsible for the overall performance of the programs. She joined EO in 2021 and, since then, has worked closely with the CEO in several areas of the organization to offer more than 16,000 entrepreneurs the best membership experience.
In This Conversation We Discuss:
- What the experience is like at the EO Network
- How to socialize new EO members with the community’s culture without scaring them with culty
- The Chair’s role vs the CEO’s role
- How Deborah learned from the organization as a new COO and her approach to the staff
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Deborah Rainey is the Chief Operating Officer at the Entrepreneurs’ Organization with over fifteen years of experience in nonprofits. She held leadership positions at Conservation International transforming the grants and contracts function, focusing on centralizing management of US programs and providing support to field programs in 30 countries.
She also held leadership at the Red Cross providing oversight and leadership to the grants management and donor strategy program where she is responsible for the overall performance of the programs. She joined EO in 2021 and since then, has worked closely with the CEO in several areas of the organization to offer more than 16,000 entrepreneurs the best membership experience. Deborah, welcome to the show.
Thank you, Cameron. It’s good to be here.
I am looking forward to getting to know you and learning more about you and your role. The Entrepreneurs’ Organization has been huge for me in my career. I was a member back from ’95 to 2000. I met Brian who is the CEO of 1-800-GOT-JUNK?. We were in a forum together and because of that, it springboard my career because that is where I became the first true COO and from there, I’ve built the foundation with everything I’ve done. It was an important organization for me. I’m curious about what it was for you that got you involved in EO. What got you to leave the traditional nonprofit world for something that’s almost not even a nonprofit? It’s so business-y.
That was one of the attractions to me. It didn’t sound like any of the nonprofits that I worked with or for. I could immediately see that there was a lot for me to learn and grow in the organization. I was up for the challenge. After a number of years in a very traditional nonprofit setting, you start to itch for something a little bit more challenging.
The draw for EO is when I thought about that side of its membership, I think about all the people who are sitting all around who are budding entrepreneurs who are already successful entrepreneurs and what they can contribute to the world. That was a massive thing to think about. I thought, “That’s pretty cool. I might want to get into that.”
It’s interesting because often the entrepreneurial world is on a different side of the line or different side of the street from the nonprofit world. I like that you saw the impact of the Entrepreneurs’. We often feel it because we’re writing checks and hiring people. I always have felt this massive sense of obligation to my employees and their families. I am like, “I have to grow this business because I got to pay them. They quit their jobs to come and work for me.” I look at what we are doing with our customers. It’s cool that you saw that. Is there more of a global reach in this role for you or were you involved in other organizations that were truly global? Did your scope entail that as well?
I was already in very global organizations. This wasn’t a bigger global route per se. It’s a different audience. The traditional nonprofit world has evolved such that they see the importance of bringing the private sector to the table to solve some of the problems they’re confronting but not understanding what that might or could look like.
I like the way you put it on the other side of it. That was part of what was interesting to me but I also wanted to stay global. It wasn’t necessarily that this was more global or less than what I had previously been doing. I understand that to fully think about the potential in the world, you have to think on a global scale. I wanted to continue to do that.
You joined in the middle of COVID. I would imagine that the EO Global office was a remote office at that time or were they coming into the office?
They are still largely remote. It was an interesting time to join, for sure but I certainly met everybody remotely over Zoom for a long time.
How do you get to know people that way? Are there a series of questions? What did you do? It’s an organization that has so much history and people that have been there for years and so much deep-rooted culture and values. How did you get to know everybody?
I had to go to member events. My staff, I could talk to you frequently and we could do relationships over time. It’s not at all the same in person but I understood pretty quickly that for me to start to understand the organization, I had to go to some events. Within the first two months, I went to NERVE, a big member event on the East Coast. I then thought that there is a lot for me to learn. If you come to the organization and are new to EO, the only way to understand it is to get to a member event.
By member events, you mean the big regional events like the NERVE, the Alchemy, the Texas Round Up, the Canada Conference and all of that.
It’s anything where you’re going to be able to meet members like if you’re in a smaller dinner and you have a chance to talk to them or you’re immediately surrounded by a diversity of people who all do something different for a living and some of it you might not even understand. You could also be at a table of eight people and have that conversation.
I remember when I first joined EO. My forum trainer was a woman named Joan Mara. She came in and said, “The way that you’re going to get the most out of the organization is to jump in headfirst and be as vulnerable as you’ve ever been in your life. It’s because the more that you share, the more that you open up and they’re going to open up with you.” Was that a learning for you as well within EO? Does that permeate up through the organization that kind of culture?
Absolutely. It took me a little while to get comfortable with it. The first event I went into was NERVE, the US East event. There was a Women of EO luncheon that I was able to go to. They had table work. They had some deep questions for the people to work on. I was sitting next to a member who turned to me and said, “Have you ever done something like this before in a work setting?” I’m like, “I have not but let’s do it.” The same thing permeates the execution of how you deal with your teams or interact with your team. There’s this expectation that you get to a level of connectedness that doesn’t necessarily surface in other organizations I’ve worked with.
I had never gone that deep with anyone unless it was after a fifth of tequila or a couple of good spliffs that I got high. All of a sudden, it became natural. You open up. That’s powerful in the organization. Do you carry that level of openness and vulnerability in your work setting with your peers, co-workers and teams as well? Is that part of the culture of EO inside the business?
It is. We were able to get all of our staff together for a global staff week and had a session where it was expected that a staff person tells and shares a story in a TED Talk-style. The very cool thing about that is you have people who feel safe doing that in a “professional setting.” It’s because it’s EO. I honestly can’t imagine that happening in any type of event. It’s a given that it’s safe to be vulnerable.
I was a guest on a podcast called A Little Bit Culty. I was being interviewed about when company culture goes too far and moves from a great culture into culty. I said that often the things that are so good about company culture, if you go 1% further, it’s culty. However, this vulnerability is culty but it’s good. It works and people like it. How do you socialize with somebody new? Let’s say it’s a VP that you’re bringing in from another organization that this is radically new to them. How do you socialize this for them without scaring the heck out of them?
We live with our values. EO has a great set of values and one of them is trust and respect. If you’re not comfortable sharing something with me, we have a value of trust and respect. I get to respect the boundaries you’re going to set. When we’re onboarding somebody new, we’re leading with their values. This is who EO is.
Yes, we are a learning organization and we foster connections between our members. Connecting across the staff is also very important but when it’s time to set a boundary, we have our customer set values to lean on. The values are not necessarily EO values. They resonate throughout your life. You don’t need to be familiar with the EO language necessary to understand them. It makes it very easy for onboarding new staff to be able to use their values.
I like the fact that you can say that you respect their boundaries as well. If you’re not going to push into it, you might welcome them into that area of vulnerability and encourage it but you’re going to respect their boundaries and let it happen organically as well. You’re not going to force it.
It can’t be forced. That’s when the opposite happens and they disengage.
Can you briefly let us know what the Entrepreneurs’ Organization is? There are a bunch of readers who maybe haven’t heard of it yet and don’t know what EO as an organization is.
At its core, it’s a membership association for entrepreneurs. Our purpose tells us what we’re aiming to do. We want to move the world forward by unlocking the full potential of entrepreneurs and enabling transformational growth in the lives of our members. We believe that building a connected community of entrepreneurs allowed that to happen.
I remember when I joined the organization, the core purpose back then was to build a better entrepreneur. I remember feeling that. What was so interesting was so much of the work that we did wasn’t necessarily about building a company. It was building a better human that was leading a company or building a better human that was going back into their relationships. I took so much stuff out of the EO, the forums and the membership events that had nothing to do with work. There was stuff around sexuality, relationships, communication and stuff that impacted my personal life more than I ever have on my business. Is that a core focus of EO still?
Yes. That’s what we talked about the transformational growth in the lives of its members. Transformation goes to translate into your personal life or professional life but it is the growth aspect of it that’s important.
You come into the organization in the middle of COVID. You’re meeting all of your co-workers via Zoom. There’s a little bit of vulnerability going to the member events and meeting them all. How long did it take you to feel settled in your role?
I’ve been in this role for a few years and it probably took the full year, for sure. Even after a few years, there’s still an immense amount for me to learn. There are still parts of the organization that I need to dig into. This role was new in the organization. We created the COO role. Whenever that happens in an organization, you evolve with the organization and the position evolves. Settled is a little bit of a tricky question. Settled means I think I’m okay after a year but the whole thing will continue to evolve.
We’ll see what happens tomorrow. That’s the first honest answer I’ve heard about how long it takes to get settled. People are like, “90 days.” I’m like, “There’s no way you can do an organization in 90 days feel settled and understand the history and the people.” What did you think it was that you did to get people to know you? How did you get people to understand who Deborah was and what makes you tick?
I realized that sounds a little bit over-simplistic but you have to invest the time. For my direct reports, for example, it wasn’t a matter of having half an hour conversation or traditional one-on-ones. We’re going to set up one-on-ones but you have to invest a little bit more time in that. Also, by establishing a type of communication with colleagues that is direct, you don’t have the benefit at Zoom of truly understanding people’s body language.
Committing to very direct conversations and open conversations is one of the only ways to establish that this is our space here. Yes, it’s virtual but this is our space. This is how I’m going to respect you by being open and direct with you. I’m going to expect the same back and that gives us a strong foundation on which to build a relationship.
Was EO already hybrid remote and office space?
We were. From a recruitment perspective prior to COVID, that was probably one of the great selling points that we can offer and COVID put everybody remote.
Are you going back to an office culture at all? Are you staying remote? Do they have any thoughts about that?
We are still remote. We have an office that people can come into and people do come into. They use it for meetings but we are not at a point where we’re mandating people to come back. Overall, it’s still a pretty tricky question for most organizations. Employees have gotten used to being able to work remotely. If you take that benefit off the table, how many candidates in your pipeline does that take out?
I don’t know what the term is. The cat’s out of the bag or the horses are out of the barn. It’s over. Maybe if you’re a small company but I don’t see it possible to go and recruit the best people anymore. I also don’t think it’s best for people to force them to wake up in the morning, get ready and drive 35 minutes into an office.
They have to pack their lunch or go spend money because they can’t grab it out of the fridge and then drive home and traffic again. All that is wasted time. The reality is, are you going to find the best people within a 30-minute drive to your office? No. They’re remote or you miss opportunities to have great people. It’s approaching it the right way. Why do you think the CEO chose you? Why did you choose the CEO?
We had a very long series of conversations before she decided to extend an offer and before I decided to accept the job over the course of multiple months. We were able to make the final decision because I felt like I was coming in with my eyes wide open. It wasn’t only reading a job description, having a series of canned interviews and being like, “Trust your gut.”
It was quite a lot of one-on-one time and conversation with the CEO to get both of us to the point where we share a vision for how the CEO and CFO should work. It’s not only a matter of assessing qualifications and fit. Do we share a vision for what this relationship is going to look like? That process is what got us to able to make the decision.
How did you end up deciding who did what or was that already clearly laid out? Was it like, “This is your role? These are their roles?”
We’re still working on it. What falls into the purview of the CEO versus the COO as the position evolves? We looked at a great article that HBR has on second in commands. We looked at that and use that as our conversation piece. When you look at these different types of CEOs, which ones do you think are the right fit for the organization and the CEO? It would have been a very different conversation if we had picked different COO profiles.
That was a useful way to have that conversation. We know that the CEO had put a lot of thought into the things that shouldn’t be CEO work anymore. It’s pretty specific things. I had a chance to look at that list of specific things. It was a bit of a bottom-up approach. Looking broadly, these are the types of COOs. Can the two of us get to a common understanding of the type of COO the organization needs and then look more granularly like, “Deborah, here’s a specific kind of task that’s on my desk that I think a COO should do. Does that scare you or interest you?” It was a very healthy conversation about that.
I love that you mentioned the HBR article. It’s The Misunderstood Role of the Second in Command. It came out many years ago. I referenced it in my book that’s coming out called The Second Command: Unleash the Power of Your COO. That article was very formative for me when I was a COO at 1-800-GOT-JUNK?. I was leaving the organization trying to describe to people what I’ve done and I realized that I’d been through a transition as well as the type of COO I’ve been.
When I entered the organization, I was at times the executor and the change agent because Brian had never built a franchise company and I had already done it twice. I more became of a partner. It was like, “Divide and conquer.” Do you remember the seven types of COOs to be able to say which one you were?
I don’t remember all of them off the top of my head but we aligned on partners quite closely. That still stays relevant now. There was another one and I don’t remember the title of it but it focused on a complementary skillset. In our conversations, we both agreed that the right fit would be a combination of those two. It’s a partner approach with a complementary skillset and that is how that approach has helped you press the bar.
I also talk that one tends to be more outward-facing and one tends to be more inward-facing. Is there a bit of that as well?
There’s a bit of that. The CEO tends to be more outward-facing. When we were talking about that, it felt fine to me. What I’m used to in other organizations I’ve worked with the CEO is in a more outward-facing position.
It’s not always the case. I’d say 80% of the time. From my research in doing the book, I’ve noticed some CEOs who are very inward-facing and more level five don’t want the outside world. They’re often coming out of the engineering space or the technical space. They hire the COO, who’s going to be the outward-facing business development side of them as their partner. One example would be Shopify where Tobias LÃ¼tke is the CEO and Harley Finkelstein as COO is this outward-facing gregarious Biz Dev guy.
It’s cool that you are in the more traditional of those roles but it’s why the role is so misunderstood too because it’s so different. Why did you select to work with her? You selected the organization but you also mentioned that you did like that relationship. Were there a couple of things that she did or demonstrated that you said, “Yeah, that’s it?”
I was simply grateful that it was not a formulaic approach to bringing this position into the organization. The CEO is investing in a long-term vision of what this role should be for the organization. You are the CEO. You’re busy. There’s stuff you want to get off your desk. You want that CEO to come in and take the stuff off your desk.
There’s a reason why you want it to be quick but the fact that she invested the time, it was the first recruitment process I’d been through where I had that amount of time with the CEO directly talking about different issues. It’s very easy to see how that approach translates into actual work. You can be thoughtful enough about that process and that tells me that we can be thoughtful enough about other things we might want to do in the organization together.
One of the big differences between EO and the normal world is you’ve not got these 16,000 members whom all have opinions. All 16,000 of these very type-A individuals tend to have opinions on how the organization should grow and be led. They tend to have a global chair, someone that they’ve elected. What’s the chair’s role versus the CEO’s role?
It’s also evolving in the organization. As the organization thinks about its long-term future and what that will look like, getting the board into the oversight role and embodying what that oversight role will be, is the direction that we’re going in. The board is already pretty solid there. That is where you end up with a little bit more of a traditional CEO versus board role where the CEO is delegated to execute for the organization and the board has some level of oversight over that.
Here’s one of the things that have always driven me bonkers about EO. It’s not just EO. There are a couple of other member support organizations that are similar but every single city or chapter tends to have its rules in some way. We’ve set this bar or we’re close to our membership. I don’t understand how an organization works around that. How do you embrace that and work around that or does it drive you bonkers too? It’s hard to have standardization.
No, it doesn’t drive me bonkers because it is part of the challenge I’m attracted to. There is a trick and if I figured out the trick, then I will go on and build a very successful business but the trick is how do you get flexibility within a framework? This is no different at EO than it was in any of the global organizations that I’ve worked with in the past. You’re balancing centralization and decentralization. You’re balancing the need to standardize specific processes and policies so that you can scale.
There is an amount of diversity that you want to retain because it’s what gives the organization a pipeline. You don’t want to lose local flavor or ideas that incubate locally. You want to preserve all of that and yet achieved some level of consistency to make your organization a little bit less complex. That is the challenge for the organization. There is not a single answer to how you do it. It looks different from organization to organization and there’s going to be some trial and error for us.
The whole thing that you said is amazing. What you nailed with me was also the flexibility within a framework. It makes sense. You need to embrace that because it is the lifeblood. If we’re so rigid and everyone has to do it one way, it shuts down that energy and that lifeblood as well.
Whatever that space is where we hit a balance there is going to evolve because as a creative energy, it self-evolves and challenges the standards and the standards have to also become flexible. The whole balance of it will continue to evolve. The first step is articulating that you want to achieve some balance there and setting the expectation that we’re looking for some balance there.
There’s a lot of communication and a lot of time with people but how did you get to learn about the rest of the organization? Are there any tricks there as well or any questions you asked?
I don’t think there’s anything different than what I’ve said so far. Attending different events was key. I had in my 1st year my 1st series of board meetings to help me understand how the governance of the organization impacts the operation of the organization. I had to go through those series of several quarterly board meetings before and some of the pieces of the puzzle came together for me. It just takes time.
Do you resist the urge to make decisions in the first little bit? There’s a popular book, The First 90 Days that you’re not supposed to make decisions. You’re supposed to observe and ask questions. Did you follow any of that framework at all or did you come in and in week two, you slash people and do this?
No. I am very much in observation mode in the beginning. It wasn’t anything severely broken or on fire but the organization was like everybody else, pulling itself out of COVID in the middle of the Great Resignation, figuring out how all of those pieces were going to impact the organization. In that little bit of a delicate space, observing was quite important at that point.
What do you do when you’re observing and you notice something? Do you write down the ideas?
First, it’s a matter of deciding, “Do I have to squash this now or wait?” Especially early on when you’re building relationships, most of it can wait until you’re able to connect with somebody one-on-one unless it’s something that’s about to catch fire. Also, it’s weighing, “Do I have to swoop in and fix this or can I let that person write it out and learn on their own?” It depends on how risky the situation is.
I’ve always had coaches in my life, whether it’s a relationship coach, sex coach or business coach. I have been working with a relationship and communication coach. She’s working with me on that in my personal relationships, like not trying to fix everything right away and letting it sometimes sort itself out. Sometimes it’s hard to do but it’s always the right thing to do as well. What about your growth as a leader? Where do you think you’ve grown over the years? What are you working on currently?
It’s unlike other parts of your life. You grow by messing up a lot and by doing some types of things. In my journey as a supervisor, I made a lot of mistakes early on. Most of us do. That made me a better team leader but it also required me to sit and reflect on the fact that I messed up and I had to do things differently. Instituting that practice of forcing yourself to reflect and not move past those moments because they were uncomfortable is important. It makes you better over time. I have a tendency to want all of the information all at once to be able to see the picture. Sometimes, you can’t see the picture, especially in a remote world. In an organization as complex as EO, you have to be a little bit uncomfortable in discomfort sometimes. That’s something I’m trying to work on.
You’re pretty aware as a leader too. You’re thinking of this stuff at a different level. Do you learn from books, coaches, courses and stuff as well? It seems like you are very high in introspection and reflection. Is that where most of your learning comes from as well?
Most of it so far has been through introspection. I’ve started to work with a coach who is helping me see some other spots that I might not have acknowledged before that need some work.
One of the things I love about EO is the exposure to all of these different thought leaders and being able to sit beside them. If you get a chance to attend the EMP Program, I highly encourage you to drop into Endicott House and hang out there for three and a half days. It’s a special and very small part of EO but it has made a massive difference in the organization of thousands of entrepreneurs over the last many years. It’s a cool program. The people that report to you, what’s your day-to-day focus with them? Are you working on growing them? What areas are you trying to grow them in?
I have two different teams reporting to me and they each take a different level of focus. For most of the first year, I spent a lot of time and attention on our people and culture team. That team needed a little bit of stability. It needed to change some of its practices and processes. Some of the work it had been doing over time needed to evolve into a more modern space. Some of its recruitment practices needed to change as the market around was changing.
I spent a good amount of time with the people and culture team, appropriately so. The organization is about people. Working with teams, I am lucky that I have a lot of diversity of thoughts and the teams that report to me. It depends on which ones I have to spend more time on than others. Some are quite good on their own and you just let them run. Some of them need a little bit more investment and I need them to be aware of that.
You talk about the people, culture team and some of the changes there. Can you give us a couple or one specific thing you had to work on?
Our recruitment practice. With the changing labor market, the traditional recruitment approach doesn’t get you the candidates you need as quickly as you need them. We had to think about being less transactional and more personal in our approach.
Do you use recruiting agencies at all or is the network enough within EO that you can leverage the network as well?
We do on occasion depending on highly specialized roles.
Have you noticed anything around pay?
Yeah. Most organizations that I have spoken to all deal with the same compensation challenges.
What are you doing there? What are you seeing around compensation? To timestamp this, we’re doing this in November of 2022 and it feels like we’ve had 3, 4 or 5 five months of interest rates being raised and inflation is here. What are you dealing with? What kind of changes are you seeing specifically?
When compensation is increasing across the market, you end up with salary compression in the organization. The person who might report directly to me is quite close to me in salary. You end up with salary compression and equity issues. You have to reevaluate your whole compensation practice to make sure that as wages are rising, you’re continuing to pay in an equitable way and competitively in the market. You are continuing to bring everybody along at the same pace. Most organizations have to relocate their overall compensation approach as have we.
It seems to be a confusing area for people. They tend to say, “You have to raise rates or what you’re paying.” I’m like, “Where does that money come from? How do you charge more?” It seems like this is an almost fanatic case or the amount of change that you face. I’m not sure that’s the right direction.
When is the resting point? When does it start to settle down? We then realized that we were in this “new normal.” Is that on the horizon? How can long can you do this push-pull with the market?
I want to go back to the 21 or 22-year-old Deborah Rainey. You are going to give yourself some advice. You’re just starting in your career. What advice would you give the 21 or 22-year-old Deborah that you know to be true now?
It’s okay to not take a linear path. The 21 or 22-year-old Deborah has to go in this direction. This is what the world expects of you and that’s what you do. Very few people I knew in my life ended up with a linear path. Telling the 21 or 22-year-old Deborah that the path is not predetermined is what I would say.
I’m going to pass that on to my 21-year-old son. We were speaking about it at dinner and I don’t think I was able to articulate that it’s easier to draw a path backwards than it is to draw it forwards. Deborah Rainey, the Chief Operating Officer of the Entrepreneurs’ Organization, thanks very much for sharing with us on the show.
Thank you, Cameron. It’s wonderful to be here.
I appreciate it.