When entering a new initiative, everyone wonders whether it’s going to be a good initiative or not. Sean Magennis has been playing this kind of role where he’s primarily involved in running nonprofits or businesses other than his own for a long time. Sean Magennis is the President and COO of YPO, a global community of chief executives dedicated to becoming better leaders through lifelong learning and idea exchange. Sean joins us to share how he balances that with running his own companies and also gives a primer on what YPO does.
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YPO President & COO, Sean Magennis
Sean Magennis is the President and Chief Operating Officer of YPO, the Young Presidents’ Organization. YPO is a global community of chief executives dedicated to becoming better leaders through lifelong learning and idea exchange. He began his business career in management in South Africa with Farm-Ag Limited and Dow Limited, one of the country’s largest producers of agricultural chemicals. After moving to Canada in 1990, he founded an Organizational Development Consulting and Human Resources business as well as an Executive Search business, which grew to encompass operations in Canada, the USA and Mexico serving thousands of clients. Sean is the past International Chairman of the Entrepreneurs’ Organization, EO and he played a key role in EO’s North American and global expansion for over sixteen years. He’s also been a goodwill ambassador in discussions with various government agencies including the State Department. He’s also an active member and past Chair of the YPO Dallas chapter. Sean and I were on a global committee several years ago for EO on Forum. Sean, welcome to the show.
Thanks very much, Cameron. It’s great to be here with you.
You were chairing this Forum Committee for EO and we were sitting down and debating. I remember at the time, we were talking about spousal forums as being this new initiative and everyone was wondering whether it was going to be a good initiative or not. There were lots of good debate but you’ve been playing this role where you’ve been largely involved in running nonprofits or businesses other than yourselves for a long time. How did you balance that with running your own companies and also maybe give us a little primer on what YPO is as well?
It has been a fascinating journey. I’ll answer your first question first because I came to the volunteer world and the nonprofit world very early. I was very fortunate and I know you have been too. Very early in my career, I qualified my company for EO. We just reached the $1 million sales mark and it had taken me about three and a half years to get there. I bootstrapped it all on my own. No debt, no borrowings, literally sale by sale at night generating invoices and borrowing. In those days, we didn’t have laptops. I had a big clunky IBM desktop computer that you needed a freight train to bring into the office. One of the things I learned in that journey and I was introduced to EO through a group of YPO members. Immediately, I got told that I was going to volunteer to help run on an unpaid basis a peer group of young entrepreneurs that were building their businesses, grinding it out with the same struggles.
I got so much out of that experience because being in a group of individuals who were going through almost the identical pains, whether it was factoring your payroll or collections. Your marketing, hiring your first employee or your second, your third, moving into a new market, moving into a new country and all of those things, having never done them before. You can read them all, business school teachers and all of these various things to you from more of an academic perspective. Living through it as a different matter. Having the alignment with this group of volunteers, I became addicted to volunteering. Once my business had qualified for YPO at the time, YPO’s qualifications were about $10 million in annual sales and I’d run through sixteen years of EO. It was a natural progression for me.
For over many years volunteering for the nonprofit peer group has been a central pivotal contributor to my own personal success and personal learnings. I met my wife finally through EO and she was the daughter of a YPO. To put it back in the context of YPO for the last few years, I’ve been a YPO member since 2007. For the last few years, I’ve been on the management team of YPO. Two YPOs that run it. We had a CEO who was a 26, 27-year YPO member and myself as his number two. We have a very active volunteer board of seventeen highly successful CEOs. They literally spend a three-year board term. We have a governance structure in the organization of about 150 members from around the world.
YPO now, we’re over 27,600 members in 135 countries and 460 chapters. We have over seventeen million employees across the membership companies. We’re closing on $9 trillion in member companies’ sales. It’s become a significant business. Even though it’s a nonprofit with a strong focus on providing learning in a platform for members to interact with each other within this what we call our safe haven, which is a confidential structure where when you put members together. It’s a highly personalized, highly confidential environment that we create for them.
Running Initiatives: As CEOs and presidents of organizations, we not only bring up business responsibilities and accountabilities to the table. We also bring our personal lives to the table.
It’s become a fairly complex but extremely exciting organization to be a part of from the inside. I had the benefit of having been the recipient of member value and services. Having the privilege of an inflection point 68-year-old organization where we have to be relevant in the 21st century with all of the things that your CEOs and your audience are facing. Massive disruption, tech disruption, digitalization, the fourth Industrial Revolution going on and continuous globalization. How do you create a culture where you’ve got the underpinnings both on process, efficiency, all of your back office and yet you’re not leaving your customer behind because the customer is the most important thing?
You are not running a small organization. 27,600 members worldwide in 135 countries, the world is littered with mastermind groups for entrepreneurs. There are dozens and dozens of these groups of entrepreneurs and YPO is clearly the highest level. You’re not just the entrepreneur, you also do the hired gun President or CEO, you’re the top person in organizations. How do you get these people, the men and women who are members of YPO globally? I have a client who’s in YPO in Thailand and he said his chapter accounts for 37% of the GDP of the country. You’re dealing with the real player, real company CEOs. How do you get them to come and join an organization like this and be vulnerable? How do you teach CEOs at this level to be vulnerable, open and willing to learn?
The key for us is we do it through member to member interaction or member to prospect interaction. The key for us is, it’s built into the DNA of the organization as the spirit of volunteering, the spirit of openness and humility. A lot of it stems from the work that comes out of the Forum product that you were speaking about when we first started speaking. Forum was something that YPO introduced many years ago, which was a very intimate gathering of ten to twelve members from noncompeting companies who get together once a month for four or five hours. It’s a highly scripted moderated experience where you have one of the members actually leads and moderates the group who get trained to do that. The purpose of Forum is so that you can bring your entire self into the Forum.
Nothing that gets discussed in the Forum is allowed to be disclosed to anybody outside the Forum. If you disclose that, you’re invited to leave the Forum and that’s very rigidly maintained. What happens is after a period of time, you as an individual Forum participant bring all of your issues to the table. It starts on business and you get business issues solved. You’re not allowed to give advice in Forum. You speak from experience and that’s one of the key drivers on a moment. YPO members get trained to speak from experience, which is very different to advice-giving. Somebody that’s been through a massive business failure, where there was a bankruptcy, there was a massive turnaround or the individual had to put the amounts payroll on their credit card or mortgage their property and then how they got out of that, how they solve that business problem.
All of those things get disclosed very personally, very truthfully within Forum because there’s a guarantee that what gets said in that room stays in the room. That authenticity, that humility, that ego-less ability to safely share what’s happening in your life, it starts to permeate through the whole organization. You will hear the same occurs in EO. You will hear members say, “I’d like you to hold this conversation that we having under the guidelines of Forum confidentiality.” What that means to those on the inside is, “I’m telling it like it is and I expect you to hold that in confidence.” It’s not a legally binding framework but it is part of the DNA of the organization.
When we go out and attract prospective members, we very often lead with the concept of, “What would it be like if you were to meet with another group of very successful CEOs the same age as you, younger than you, older than you? What if you were able to learn all the lessons that that individual had learned in their business career and in their personal lives, in a manner that’s truly authentic, that’s based on trust, that’s factual and that’s real? You’re getting it from the person that lived through that, would that be a useful experience for you or an opportunity for you?” I have very seldom had a qualifying prospect say no to that invitation.
That invitation is huge.
Powerful, isn’t it?
Yeah.
It’s also about the whole person. You and I both know as CEOs, as presidents of organizations, that we not only bring our business responsibilities and accountabilities to the table, we bring our personal lives to the table. We bring our own desires. One of the things that we’ve migrated to YPO over the years is we know that a lot of our members, once they’ve achieved a certain amount of success, they want to give back or they want to impact the community. They want to do something that’s socially good. They want to change the world in some positive way. We also provide a platform for those of our members who want to have a significant impact outside of the pure profit generation desires when you first get into a business. More and more of our members are playing multiple roles, whether it’s giving back in the community, leading in politics, impacting through some technology or through philanthropic giving and starting to have an impact on the world.
I’ll talk a little bit about the strategy and the evolution of where the organization is going and how we need to provide in an ecosystem. I used the word ecosystem because we don’t feel we need to own the peer-to-peer space. We’re good with our defined constituent group, we help them and provide opportunities for access to learning to each other, to great thought leadership, to great institutional relationships with universities and thought leadership around the world. Create a place for young children and spouses to work within this and collaborate together. We can collaborate across a variety of different ecosystems to help make the world a better place at the end of the day. Business makes the world go round. We all know that. It all comes down to business hiring, whether it’s in the full profit business sector or the non-for-profit business sector.
I’m curious how you’re taking some of the skills and lessons that YPO has ingrained in building the Forum experience in the chapter experiences. What tools do you take from the Forum or the YPO membership experience and bring into your business? Do you take that confidentiality in, do you take to bringing your whole self in? What are you bringing in and how do you bring those in? I never even thought of that before. Even after twenty-odd years of being around you and YPO, I never thought about it.
In fact, we have a product in YPO called Forum in Business and part of that is taking some of the key tenets of Forum: transparency, honesty, authenticity, parking your ego and equality. Part of Forum is the process of Forum because you’re talking from experience not from advice giving, is suspending judgment. It’s such a beautiful thing.
It’s a huge tool.
Running Initiatives: Position yourself to really understand your business comparatively to the market.
Even if you follow the basic principles of listen before responding, how are you feeling? Is the hair growing back? You’re sitting in a business meeting, it’s been a tough quarter. You’re looking to blame or you’re expecting somebody to blame things on you. The Forum principles teach you to sit back, breathe, listen, evaluate, utilizing data and fact, not jumping in with a defensive comment or a critical comment. It helps you suspend some of those basic things that are by the way, natural human reactions. These are physiological reactions but the discipline of the Forum techniques helps you identify what those are and then helps you as an individual. I’ll use my experience. It’s helped me tremendously, partition the physiological reaction from what is the reality, what am I hearing? How does that play to the data that I have at hand? Building those structures and those disciplines is very powerful in an organization.
Do you take those tools, those structures and teach them to your employees? If you do teach them to your employees, how do you teach them so they understand that same experience? That’s where it can be powerful.
It’s done in different ways. At YPO, for our employee group, every single employee as part of their orientation gets trained in how to participate in a Forum. They go through the full training that a member would go through and they experience that in a small group. The YPO Forum is a true peer-to-peer forum. In an organization, what you want to do is tease out those applicable principles because you’re not in the peer group. You may have a supervisor with a subordinate in a matrix organization with another member of a different team. As long as the principle foundations are adhered to in terms of how you structure a meeting, what you discuss in a meeting, how you discuss, the time keeping, the record keeping, the speak from experience, the use of data and fact, suspending critique and judgment. Those foundational things work perfectly within the constructs of managing a business.
I started listening to some of what you’re saying and I’m thinking to the book that I wrote, Meetings Suck and how much of what I pulled from Forum. I actually pulled into the meeting structures almost by osmosis. I was thinking about the moderator, the timekeeper and the parking lot. Those are right out of the Forum experience.
At the outset so much of business, the best CEOs that I’ve met and I’ve met like you thousands and thousands over the last several years. The best CEOs are the ones that can clearly articulate their own personal values and show up as authentic human beings. Human first, business second and within Forum, that foundational principle of sharing your values, your hopes, your dreams, some of your frailties and even for CEOs. Obviously, there’s a boundary and there’s a line. You’re not going to share with your employees you’ve got terminal cancer, when you’re leading a publicly traded company without informing your shareholders first and having all the risk mitigation and strategies involved. If you can clearly commit to sharing your values in a way that says, “Here’s who I am and I care for you at the human level,” step one. We spend so much time together in an organization that has to be a core first step.
I led a session at the COO Alliance event. I run the only network of its kind in the world for the second-in-command. I had a session that was very impromptu where I was going through a tough day frankly. I was having a bit of a crappy month. I remember looking at the group going, “I don’t even want to sit, talk to you and lead you through this next exercise because my life is a bit crappy right now.” I was looking at the group and I thought to myself, “I’ll bet you every single person in the room is struggling with something right now as well.” I had everybody write down one thing they were deeply struggling with on a Post-it note. We all passed around the Post-it notes and shuffled them up and read them out loud. It was powerful to see 30 different people in tears when they realized how much everybody else was struggling. That’s part of the human condition that every employee is showing up with the same crap we are.
We have employees here in the United States whose families are living in emerging market countries where there is civil war, whether it’s in Syria or whether it’s in the Middle East or Africa. Even South of the border here in the United States in Mexico where there are certain environments that are very troubled and just to survive is massive. They carry their accountability load within the organization and obviously expectations, etc. We all have lives in the background. Those Forum constructs enable you to understand that first and foremost you’re dealing with a human being. The second aspect of Forum, which is so profound and so pertinent to business is 100% commitment to your obligations that you sign up for in joining a forum. My Forum, I’m allowed to miss two meetings a year with an older group. People have homes around different parts of the world.
In my younger days, we had to attend every single Forum meeting once a month, otherwise you were invited out of the Forum. In the business context, when you’re working in teams, the commitment is 100% to show up to each other. It’s foundational and then you’ve got the speaking protocols. When you speak, it’s got to be from a factual data-based foundation. How many businesses do you and I know where it’s a lot of knee-jerk, shiny new balls and you sweep the reality under the carpet? The best businesses define process, utilization of data. Obviously, you don’t want that to kill creativity. You still want creativity and innovation and you want to fail fast but you want to have this culture of, “Let’s go for it. Let’s transform and let’s do that continuously.” You still need the underpinnings.
I was talking to somebody about the underpinnings of a business changing. I was saying that business evolves like a human evolves. I’m going to guess that you’re 57 years old.
No, I turned 54.
When you were four years old, when you were fourteen and when you were 24, 34 and 44, you were Sean Magennis but you were a very different version of yourself. How do you think a company has to evolve and how have you worked to evolve companies as they grow and as they go through the teenage, adolescent and adult phases? What needs to change?
It’s such a broad question and it has so many nuances to it. I’ll use YPO as an example. You take an organization that’s 68 years old that started out more of as an association model. As a group, the demographics got older. The average age of our total membership is 50 years old but in order to get into YPO, you have to be under 45. We recruit most of our members in the age of about 35 to 42. The average age of new recruits is closer to 40. We have a whole group of individuals that’s over 50 years old and growing because we have a very high retention rate. We have a 94%, 95% plus retention rate, which is every business would die for that. It’s meant that during certain phases of the business’ growth and development that you’d have to take a very close look. Firstly, you’ve got to position yourself and you’ve got to understand your business comparatively to the market.
There are a number of key drivers there. Are you getting a year on your growth? Has your growth stagnated? What is your demographic? Is there any price sensitivity to the pricing points for your product or your service? There are a whole series of business metrics. Each business has a unique set of business metrics and then obviously you’ve got competitors or comparatives that you can go in and compare too. In our sphere, we follow about 110 companies not necessarily just strictly core competitors but more and more we’re following online communities, we’re following virtual communities.
We have a whole team that’s looking at and listening to our membership. We spent a lot of time listening to holding focus groups with the Millennial population and the next group that’s coming up is post-Millennial group. Part of it is how do you remain relevant? Our oldest member is 97 years old and our youngest member is 22. We know from the older demographic what’s important to them and we know that there’s a lot of stickiness there because people that have come through our ranks and who’ve had a great experience with us, our fees are relatively low.
Running Initiatives: The key to growing your own team is to have a very defined talent and career path.
They know how to extract value from the products and services that we put together, built lifelong friendships. Imagine you and I saying, “I’m no longer going to pay my EO or YPO dues,” and yet 78%, 80% of the people that I spend most of the time in my life outside of business who became my dear friends are all part of my network. The stickiness is very important and it’s different in our sense because we are a membership organization. We are nonprofit. We are not gouging our members. We’re not taking advantage of them in terms of trying to create revenue. We live off of our due subscriptions. We don’t have any other profit centers within the organization by design and by choice.
That’s always been extraordinary to me for sure.
The other part of the question is, what changes in the fundamentals? I don’t think the fundamentals changed that much. I think what changes is the environment in which your business is operating, whether it’s the economic environment, the global environment, the different things that are happening and the stresses that are out there. If you look at any business and I’ll say this with a high degree of confidence because I’ve seen a lot of businesses and I’ve seen turnarounds. I spend a lot of time with a variety of different company CEOs as you know. The foundation elements of getting process right, communication right, transparency, clearly understanding, setting a vision, a purpose and a mission, and aligning your whole team towards those, those constructs stay. It’s just the nuances. The most critical thing, which doesn’t change, which will never change in a business, is that every business is heavily reliant on every single person in a business.
Do those foundational pieces that you listed off, do they stay consistent in all of those 135 countries as well or most of? Are there any countries that you’re doing business in where those things just don’t work or there’s something different?
There are cultural nuances. Every country has slightly different cultural nuances. The foundational business practices, if you look at what we learned from Japan, when Japan taught us the quality parameters. After the World War II, we went in and there was the Marshall Plan and we did all this rebuilding. We were giving all our IP but look at what came back to us from Japan? Look at what’s coming back to us from China, even though there seems to be this prejudicial conversation or very highly loaded conversation. I’m not going to take sides in this one because that could take us three years to decipher. There’s always a point in time where once the foundation is set, people expect quality, people expect on time. People want what they want, particularly in an environment that’s not socialist or communist, they vote with their pocketbook.
One thing I noticed, I was talking to a YPO in Kenya. He was talking about what’s important to employees and what a company needs to focus on is different in North America or in Kenya and in that region of Africa versus North America. I said, “In what way?” He said, “Our employees are going home and we’re not ever sure if they’re able to feed their family.” North Americans don’t think about that. They’re all trying to give their employees a better workplace, foosball table, free massages and alignment with core purpose. He goes, “I’m not sure that my families are being fed. We started to realize that if we paid the men more money, the assumption was the money was going home to the families and it wasn’t. What we started to do is at the end of the day we gave them the male who was working food, to bring physical food home to the family because we knew they couldn’t spend the food at a bar.” It was interesting to see that a cultural shift. Do you pick up any of those things culturally or have you picked up any cultural things that are happening globally and brought them back into your business?
We do. We have 360 full-time employees spread around the world. 75% of our employees are women by the way and 50% of my C-Suite are women and very diverse cultures. In certain parts of the world in which we operate, we need to make sure that our employees can actually get safely from their home to the workplace and back again. We all jumped in our cars here in Dallas and we hit home. It’s totally different. We operate in certain cultures where they are still very male dominated society, where we stand for equality and we stand for full diversity across all the diversity spectrums, not just gender. We plan to stake and we say, “We’re going to have members or representatives of every community in the world.”
We have to take into consideration, be patient and work through without sacrificing our stand and being in integrity with our stand. We have to work with the rules that we’re given. You go to Singapore and you operate a business in Singapore. You can’t afford to break any rules in Singapore, and in other countries in the world, there are no rules. Obviously, you learn from that. I don’t think there’s a culture or a business that we can’t learn something from. If we stopped learning and experimenting, then I think of this grand incredible societal world that we live in.
What do you think your biggest skills are as the COO or as a leader?
It’s changed over time. A good executive is constantly learning. I think as a COO, which is a number two position, which I’m in for the first time in my life, by the way. It’s been an unbelievably rewarding experience. I’m blessed with an unbelievable CEO who comes from the classic hired gun, a real technical financial detailed CEO.
Almost more like a COO than a CEO.
He has to run very complex businesses. When you have somebody like me who was a complete entrepreneur, I had to retool some of those skill sets. The important thing that I’ve learned is one, particularly also in an organization like YPO, you’ve got to learn to park your ego at the door. What doesn’t work in a peer group or in a relationship between a CEO and a COO is having either both of you or one of you allow your ego to get in the way. Ego management is so difficult to do and it takes time. That’s something that certainly I’ve tried to work on and I’ve gotten a lot better at it. Coaching and coordination are fundamental 21st century skill sets for a CEO and a COO. You’ve got to be able to direct, coach and influence without direct accountability, particularly as your organization gets bigger. When you’re a sole practitioner or you’ve got five or ten employees, you’re still able to roll up your sleeves and do most of it, it’s more hands on.
You’ve got to be able to think more strategically, become a dot connector and then problem solving. That comes with experience. I am way more capable at 54 years old in solving problems because I’ve seen so many problems. It’s one thing to apply intellect. I know some very smart 22-year-olds that can probably solve certain problems way more effectively than I can. When you’re dealing with human nature, when you’re dealing with problems that are not necessarily financial or technical that require patients, that require negotiation, that require bringing the disparate group of stakeholders together. Then negotiations require a huge degree of skill set. Your digital proficiency in negotiation, all of those nuances require CEOs to upskill on a consistent basis.
You’re talking about all the soft skills that in some ways I used to take for granted. I was exposed to a lot of this stuff at College Pro Painters years ago when I was with College Pro and opening up the West Coast of College Pro. We worked hard at growing our people. I remember Greig Clark, the Founder and Greg was a YPO member. Greig used to say that the leader’s job is to grow people and he obsessed about how can we grow our people? What you’re talking about I think is even infinitely more important than it used to be because the speed of business is faster. I remember my first computer was an IBM 8086. I would literally have to pick it up and move it somewhere so you didn’t sleep it on your desk. Business is so fast that the soft skills leadership is probably more important than it’s ever been. How are you growing your team at YPO and how have you grown it in the past companies you’ve run?
Running Initiatives: The more you put into individuals, the more that you’ll be able to have them respect, trust, forgive, and give you a little bit of leeway in slack.
The key thing is to have in a very defined talent and career path. When a person comes in, obviously they come in with a baseline and they come in with the experiences that they have. The skill sets, the resumes and they’re in a particular role with a particular set of objectives. From a developmental standpoint, it’s very important to understand what they come in with and also to understand very early on what their desires off a future contribution. Everybody comes in knowing that they have to do X, Y and Z. They get their two-year plan. They get their team, but it’s very important to transparently understand to collect and gather where an individual is. What they personally want to do in the construct of your organization and then even further and then to create the conditions for that. One of the struggles that I’ve had in this business and in previous businesses is when you have a relatively flat organization, where there’s not a lot of room to move. How do you keep a person stimulated, rewarded and growing where they may hit the ceiling and they may not be a role for them elsewhere in the organization within a three to four-year timeframe? The key is to maximize that time that they’re with you.
You’re touching on something that I’ve been trying to have to wrap my head around. It’s the second half of the Gen Y cohorts. We’re talking about the 23 to 30-year-olds. I think Gen Y is 23 to 39 approximately. How do you get the second half of Gen Y, the 22 to 30-year-old age group? How do you keep them loyal to an organization? YPO seems to have done a pretty good job with that, where your team doesn’t transition as fast or was that a legacy feeling?
That’s still fairly accurate. Our turnover is in the 20, 25. Turnover is healthy too. Part of my dilemma in the early days of my business is I came from the old school. I watched my father, two careers but 20 and 25 years or something like that. I’ve tried to build my businesses around that. I take a person in a junior role and I’d look after them. I’d accept weaknesses. I’ve mitigated forward and you end up building almost what I would call a bloated structure. I did that twice because I built this loyalty. What I found was, while I thought I was helping the individual, I was actually harming the individual.
I wasn’t giving that individual the opportunity to be the best that they could be from me and be totally fulfilled and maximize their potential. I’m using a multitude of examples. In one particular example, I over promoted an individual and it got to the point where this person was getting paid more than a junior level contributor that was doing three times what the individual was doing. I think we all make those mistakes. One, it’s clearly understanding the current role requirements. Having a good simple and continuous feedback loops. The last thing you want to do with a 22 or 23-year-old is not give them weekly, monthly or regular feedback. They are very into their personal development. The old way of every six months sitting down, doing a review, “How are you?”
Managers need to be talking to their employees, their subordinates almost weekly in terms of making sure that they’re effectively supported, doing what they’re expected to do and that they’re fulfilled in their role. Purpose is another big one. I find that a lot of younger people will not work for an organization unless they are clearly aligned their value set with the purpose and values of the organization. That sounds like a truism or it may sound trite but I can tell you that in our organization, in others that I closely work with, I sit on the boards of a number of companies, that’s a very big attractor. Often we think that you’ve got to pay top dollar. If your values are right, the conditions of employment are right, you care for your people and you give them upside. By the way, if they do leave because there isn’t a role for them in the organization, you’ve prepared them so well. You’ve given them the tools, you’ve given them the right examples, they’ll go on and be your advocate way longer past their employment with you than you will believe. There are statistics behind this.
That’s such a huge point for entrepreneurs and for leaders to actually understand is our job isn’t to try to keep people forever. Our job is to grow them and keep them for as long as they are useful, they’re having fun and we’re having fun and then set them free. Almost like we’re growing our children. Our job’s not to keep our kids at home forever either.
I love that analogy. I have verifiable data that we can back that up. We do something in YPO. You’ve got to measure what you’re looking for. We do engagement surveys. We do it by department. We slice and dice it in a number of different ways and we’ll see this department’s not doing great. What are the ratings on the manager? The impact of a manager’s behavior is so profound on the people that are reporting to them. It’s a direct correlation to success. You look at the work that Michael Bush is doing in the best companies to work for. He’s the CEO there and you look at the statistics. You look at Fortune’s list of best places to work. You look at their research on leadership. It all boils down particularly for the younger individual, the person leading them, mentoring them and guiding them. That’s where we spend a lot about time with our managers, teaching them and training them. I spend a lot of time and as do our C-Suite individuals coaching a level down or two levels down, mentoring another one. How do you learn?
It’s interesting you keep coming back to the data making decisions. Is that something that is a new skill for you or does that happen as the company scales?
It’s an evolving skill that’s evolved over the last couple of years. I was in businesses that were very data heavy, building low income housing. It’s an engineered product and you have to be on top of all the detail. In business like professional services business, which YPO is and how we’re modeling ourselves, data is the lifeblood of our business. Understanding what your member needs are, understanding where the markets are, the cultural differences, the nuances in different chapters and regions. What’s working and what isn’t. The effectiveness and the outcome of certain events that we run. We’re putting on mergers and acquisition seminar and we’re getting a net promoter score of ten as opposed to nine, we’re doing something wrong.
Do you ever allow your gut to overrule the data or do you trust or dig for more data?
Emotional intelligence is a strong suit of mine. I have learned that if I go to data first and I slip on my gut reaction, it’s more of a 50/50 or 60/40 in favor of the data.
What I’m finding is if my gut’s trying to overrule the data, I go look for more data. The data will sometimes play out and either change to prove my gut or the data will start to slide in the favor that my gut was wrong.
I’ve learned that the leadership journey doesn’t need to be a lonely journey. I’m blessed with an incredible group of individuals that I can go to for advice from their experience. I can pick up the phone and talk to a CEO who is running a $300 million business, roughly the size of our business and say, “Have you dealt with this issue? Have you worked with a board? What are your compliance things? What experience have you had in this different area?” I can get an instant answer or two or three different answers, calibrate and then make my decision.
I’ve never been smart enough to figure it out on my own anyway. I like to rip off and duplicate. Why would I try to figure it out when I’m sitting with a Forum group of ten people who have already figured it out?
Honor where you’ve been helped. Part of the integrity of leadership is also not necessarily taking the credit even though you’re the deciding force and the buck stops with you. In my case, the buck stops with Scott. He backs me up by the way, 100% in my decisions. That’s the other important part which we didn’t discuss is how two people who are running an organization is supporting each other and what rules should be in place and commitments?
How do you stay in sync with the CEO and how does the CEO stay in sync with you? How do you decide roles and responsibilities between the two of you? It is a two in the box.
Communication and agreement. We sit down and we do days away together, which is spectacular. We do a lot of Forum. We start with the softer interpersonal, “How are you doing? What’s happening,” and get connected as people. We look at authority matrices. We’re very open in terms of discussing what’s working and what isn’t. We have a format that we follow and have a baseline agenda. We share our views openly without critique. We agree to disagree but when we leave that room, we’re 100% aligned. We’re very clear on our roles, “How are we doing on our roles.” My commitment to my CEO is, “I’m a vision amplifier. I’m an executer. I’m not in the limelight. I am not the ultimate accountability individual,” and I had to get clear with that because for 25 years of my life, I was.
It’s got to be openly discussed and agreed to. The definition of decision making rights, what’s appropriate and what is appropriate. You’ve got to get clear on that. If there’s any gray in that area, you’re going to butt heads. On the flip side, I need support. I don’t need to have anybody utilizing a backdoor to count them on the decision. If there’s a back door, I’ve got to be told about it. This isn’t about restricting people from meeting, we have a very clear open authority that anybody can talk to me or the CEO. Scott’s direct reports, my direct reports can go but we inform each other. If you create the culture of, we’re going to be open and transparent, unless it’s a private issue, it’s highly confidential or it’s something to do with something that maybe of a legal nature where confidentiality is important. We all understand that and we know what those business rules are. That’s key. We have a commitment to each other that if we for one minute suspected or feel that something isn’t right, we pick up the phone.
It sounds communication.
Communication, agreement and then telegraphing it to the rest of the company. When we go out and we do this consistently, we’ll send it our senior team leadership, “You haven’t been seeing Scott. You haven’t been seeing Sean. I want to remind you, we’re a partnership. Here’s how we expect to be communicated with.” It’s reinforcement. Once you get into that rhythm, it takes time and it takes the right combination of people. It’s not easy but if you get it right and I feel we’ve got it 99%.
If we were to rewind back to the early days of your career as a CEO or early days of your career as a COO, what’s something that you’ve learned that you’ve gotten good that you wish you’d known earlier on? What’s a lesson that you wish someone had told you or you could tell yourself as a twenty something entrepreneur?
I would not rush any type of communication or interaction with key employees. I’ve learned to take time. In the old days, it was ready, fire, aim, one thing to the next. What happens with that is you lose connectivity and you don’t establish relationship. My brother uses an interesting term. He says, “You’ve got to make deposits in order to make withdrawals.” I think of that statement ten times a week. The more you put into individuals, the more that you’ll be able to have them respect, trust, forgive you, give you a little bit of leeway and slack because we know that the world is messy. We know that business is messy, business is never a straight line. That old adage of the hockey stick going up, it’s a whole bunch of little wrinkles, swivels of ups and downs and hope the trajectory is in the right direction. We all aspire to improve and hopefully we do.
All of those employees are starving for that connection as well. I did a call with a shaman and she challenged me to not be the first person to leave every conversation. I don’t know where I was going, whether I was insecure, in a rush, not being present or a combination of all of it. I’d always seem to be the one to go, “See you,” then I’d be gone.
The mantra that I’ve adopted, which I never had before was operate as a leader with a servant heart and a business mind.
Sean, it’s great learning from you, sitting and listening to you again. It’s wonderful that we’d met several years ago. Thank you so much for being on the show.
You’re the best, Cameron. I appreciate our friendship.
I appreciate it. Thanks, Sean.
Important Links:
- Young Presidents’ Organization
- Farm-Ag Limited
- Entrepreneurs’ Organization
- Meetings Suck
- College Pro Painters
About Sean Magennis
Sean is the President and Chief Operating Officer of YPO.
YPO is a global community of chief executives dedicated to becoming “Better Leaders through Lifelong Learning and Idea Exchange.” We create trusted spaces where leaders gather, connect, share and grow. The YPO platform provides more than 27,000 members, representing diversified industries and types of businesses in over 138 countries, with access to extraordinary educational opportunities, alliances with leading institutions, and interest-based communities to support their businesses, communities and families. For more information visit ypo.org.
Sean is a seasoned senior executive with a background in entrepreneurial startups, business development, divestitures, successful business growth and exits, service sector industry expertise, and industrial infrastructure business. He is a Non-Executive Director and co-founder of Gateway Green Energy Holdings LLC. and serves on the advisory boards of several companies.
He has broad international executive experience having completed transactions for industries across the USA, Canada, the UK, Europe, Mexico, Asia and Africa.
He is the past International President of the Entrepreneurs Organization, (EO), one of the world’s largest peer to peer networks of successful entrepreneurs. He played a key role in EO’s global expansion, mentored and supported by YPO members, for over 16 years.
He is an active member of YPO Dallas Gold.
Mr. Magennis has a BA degree from Rhodes University in South Africa and he holds postgraduate diplomas in business management and financial management. He is a graduate of the Stagen Leadership Institute in Dallas. He is married to businesswoman Maria Cintron.
