Brad Weimert: Cameron Herold, I have got you to Austin, Texas this time.
Cameron Herold: This is a pretty awesome spot, buddy. This is like I was telling a friend this morning, I had breakfast with Zach Obront, that I think I know more people in Austin than any other city in the world, and they’re all like amazing people but I kind of have to fly under the radar because I don’t want anybody to know that I’m here so I don’t have to see everybody but, yeah, it’s good to see you.
Brad Weimert: That’s how I feel currently, having just gotten back from off the road and for six weeks. I get home and people are like, “Oh, let’s hang out,” and I’m like, “No. I need to hide.”
Cameron Herold: I just want to be on my couch with The Professor.
Brad Weimert: Yeah, exactly. Exactly. Well, last time, so we recorded an episode of Beyond a Million early and we were in Santiago. We’re at the W in Santiago. Great episode. I actually reviewed it in prep for this because we talked about kind of your origin story. We talked about hiring a lot of super tactical stuff that’s super relevant. And it was a blast.
Cameron Herold: It was fun.
Brad Weimert: It was fun.
Cameron Herold: And we got to go for like an unbelievable three Michelin star dinner that night, too.
Brad Weimert: We did. We did but like randomly.
Cameron Herold: Yeah. Very randomly.
Brad Weimert: Just slipped in at the last minute there. I think they almost didn’t let us in. Do we bribe them?
Cameron Herold: I think you paid them $50 to the door to get us in and then we did like a four-hour dinner. We did it in two hours because we both needed to get to the airport like a nine-course ridiculous dinner. It was amazing.
Brad Weimert: Yes. Well, this time around, I want to talk about a bunch of stuff. We can go whatever direction you’d like to but you’ve written a bunch of books that I think are great for different purposes. The one I want to talk about, the most recent one is the Second in Command.
Cameron Herold: Yeah.
Brad Weimert: Unleash the Power of Your COO. Before we dive into that one, why don’t you just shamelessly plug the rest of your books? Because they’re all good for entrepreneurs.
Cameron Herold: And it’s actually kind of funny that we’re talking about Austin. All six of my books are tied to Austin. So, my very first book, Double Double, I wrote with Greenleaf Books, and Clint Greenleaf and Greenleaf are from Austin, Texas. And then I got involved with Scribe Media with Tucker and Zach, and I wrote four of my books with Scribe Media, which the Second in Command was with them. And then my other book, which is actually book number four, but my sixth of the six books was with Hal Elrod, who’s also from Austin. Like, how random is that that all six of my books are from here?
Brad Weimert: I love it. I love it. And I love Tucker, Zach, and Hal. Tucker and Hal have both also been on the show, also great friends and ridiculous humans.
Cameron Herold: Unbelievable humans.
Brad Weimert: Yeah. Ridiculous in different ways, though they do have the throughline right now of living off-grid.
Cameron Herold: Living on a farm.
Brad Weimert: Yeah. Living on a farm in the middle of nowhere.
Cameron Herold: I couldn’t do that. I was talking to Zach this morning. I was just like I would be functionally, it’s like I’m functionally illiterate. I would be illiterate on a farm. I couldn’t do anything.
Brad Weimert: Well, I think that that’s part of the appeal and draw for those people is to prove that they’re men or some sh*t. They’re like, “No, no, I’m a competent man.”
Cameron Herold: The doomer optimism but, yeah, and they are. Like, Tucker is actually, yeah, maybe I’m not, you know.
Brad Weimert: No. I look at it as pragmatic. I don’t need to build those skills.
Cameron Herold: I could set up a tent but like I don’t even want to.
Brad Weimert: Nope.
Cameron Herold: A movie is fine.
Brad Weimert: Yeah, I’m with you. So, tell me, we can talk about the book. So, Easy Pay Direct has gone through, obviously, tons of iterations throughout its life and one of the things that has consistently been a challenge over time is just delegation of operations specifically. So, the second in command and really your whole world revolves around that role in uplifting the operators, right, the chief behind the chief.
Cameron Herold: Yeah. Well, also what’s interesting about the second in command role, and this is why I called the book The Second in Command versus The COO Book is the second in command tends to run all of the areas of the business that the operator, the CEO sucks at or that drains the CEO of energy. So, in some cases, the CEO oversees more of operations than in other cases. So, when I was the second in command, I’ve been the second in command for three different companies when I was the COO at 1-800-GOT-JUNK?, IT and finance reported to Brian. I ran operations, marketing, PR, sales, the call center franchise operations, our global operations, that all reported into me because I was really good at that. But you could have a second in command reporting to you who maybe isn’t that good at operations but they might be good at legal and IT and marketing and sales, and the ops side of the business might report to the CEO. You’re really kind of the yin and yang to the CEO. That’s what’s really weird about this role. And yes, it is more operations often does fall into that COO paradigm.
But you, as an example, are very good at marketing, right? You are also very good at finance and you’re also very good at IT. There are other CEOs that really suck at that and they have to find a second in command who happens to be really good in those areas.
Brad Weimert: How do you approach that? How do you decide what that role is going to be in your specific company? Is it industry-specific? Is it preference? Is it size-specific?
Cameron Herold: It’s all of that. And it’s also first understanding yourself. It’s like, who am I as a leader? What drains me of energy? What feeds me? What am I really good at? And then how do I delegate everything except genius? And how do I find someone who’s really good at all those things that I suck at and who doesn’t want to work on the areas that I’m good in? If I was a second in command and I happened to love IT but the CEO wanted to oversee IT, that can become a bit of a conflict. It’s almost like a husband and wife in a traditional marriage. You don’t really want two people who love to do yard work and who love to do cooking and who love to do the cleaning because then you’re both kind of in each other’s ways. You almost want one who likes to do yard work and one who loves to do laundry and one who loves to do cooking so that you can divide and conquer and leverage each other. That’s something that you look for in that second in command as well is how do I leverage myself? How do I find somebody who can be my counterpart, who can help me then scale the operation?
Brad Weimert: You started by saying you didn’t title it The COO Book but the Second in Command book. I could argue and one could argue that when you are getting going, an assistant could be your second.
Cameron Herold: Bingo. Exactly.
Brad Weimert: Right?
Cameron Herold: Yeah.
Brad Weimert: How does that change as you grow?
Cameron Herold: And if you don’t have an executive assistant, you are one, right?
Brad Weimert: And if you don’t have an operations person, you are one.
Cameron Herold: Right. So, at some point, the second in command’s title changes based on their roles and responsibilities, the level of strategic insight they bring to the business, the amount of autonomy that they can have in their role, meaning you don’t need to oversee them or delegate to them, the amount of P&L responsibility that they have and the amount of money you’re willing to pay them. Those are kind of the five criteria for what the title will be. So, your second in command, as you put it, could be an executive assistant. Maybe it’s a $75,000 EA who takes a lot of stuff off your plate to free you up to have more time to have a better life or to work on the bigger areas of the business. Then at some point, you need to get bigger projects off your plate. You need to get somebody to start managing people. That might be a director of operations or it might be a project manager who can take more things off your plate but not yet a COO. And then you need somebody who’s like managing five or six managers for you, managing some directors. Maybe they have some P&L responsibility. Maybe they’re making decisions that you don’t need to be involved in. Maybe decisions under $10,000 a year that may be more of a VP.
Then you need somebody to come in with like strategy and insights and maybe you’re doing M&A or you’re pivoting the company or you’re globally expanding or you’re actually needing somebody to manage leaders who are managing teams of functional areas. That’s more of like the C-level person. But again, most companies sadly make mistakes and they give people big titles. You know, they have a 15-person organization and they’ve got six C-level people that are paid like directors. You’ve really made a mistake. You’ve hired people that are directors and you’ve given them titles that don’t match their comp or their responsibility. There’s a lot there.
Brad Weimert: There is a lot there because you ended on that one. I have to ask on that one. There is a in the last 20 years, but probably 10, there is this huge movement towards just giving away C titles and there’s just a sh*tload of C titles everywhere and people are just making up C titles.
Cameron Herold: Yeah, yeah, yeah.
Brad Weimert: Why is that bad? So, you just said we’ve got actual directors that have C titles. Why is it happening? And why is it bad, in your opinion?
Cameron Herold: Okay. So, I’ll walk through why it’s happening and then why it’s bad in a second. So, 20 years ago, to get a C-level title, you had to be a major player at a major company, right? To be a chief marketing officer, chief technology officer, chief financial officer, chief operating officer, whatever, you need to be a pretty senior person at like a 500-person-plus company. What happened post the dot-com crash in 2000 and 2001 were these smart people used to take equity in lieu of compensation, so they took some equity or stock options and got paid a little bit less. When the market crashed, they then realized their options weren’t valuable, so we had to give them something else that was valuable. They needed to have a stake in their career and some way to build their career. So, we started a little bit of title inflation to make them feel good and say, “Okay. I can’t really give you equity that’s worth anything but I can give you a title so that if you work with me for two or three years as like a vice president or a chief marketing officer, you’re now more bankable in the next phase of your career.” That’s where title inflation really started.
Prior to that, in the 90s, we got a lot of title inflation with the VP level at the banks. A lot of the investment banking firms gave these 25-year-olds vice president titles so that they were more bankable and more sellable. You could be the Vice President of Derivatives for Bear Stearns and going into a market. The reality is you reported to six levels above you to the CEO. It was like VP to Executive VP to Senior VP to CMO or whatever. You weren’t really a vice president. It was a marketing thing. So, what happened was because of marketing and because of in lieu of compensation, we began this title inflation, and then it just kind of crept in where Gen Y and Gen X started getting bad at saying no, and Gen Y started to require the title. And then in about 2004 or 2005, they started to want the equity again. So, we started to give out equity again. So, really we got lazy and we had a trend. That’s kind of what drove it. The reason you don’t want to give out titles that are too big too early, it confuses people inside the company where a first-time first-year employee who’s a manager or a front-line employee, they think a C-level person has much more responsibility because of the title.
The title actually does bear some weight. They go online and they see, “Oh, I’m a CMO. I should be getting paid $300,000 a year because that’s what it says on Indeed or Glassdoor or Google that CMOs get paid.” But the reality is, “Oh, you’re not really a CMO. You’re more a Director of Marketing,” but they now believe that they’re worth more so that title inflation costs the company more because you start having this creep on compensation. They also believe that they’re supposed to be building out these little fiefdoms for themselves, “Oh, a CMO should have like VPs and directors reporting to them.” So, they subconsciously start building out business areas instead of rolling up their sleeves and getting dirty. They start to build out their teams. And almost every first-year manager’s mistake is they believe that the answer to every problem is hire more people. When you give people a big title, they believe they should be adding people as well. So, you kind of get this inflation creep. You get compensation creep. You also then build more complexity in your organization because they start adding people when they shouldn’t be. And then from the outside world, it tends to be good, right? If a title is big, we will take them more seriously. If I get an email from a CMO versus a director of marketing, I will take it more seriously but there’s a lot of cost internally to doing that.
Brad Weimert: There’s also degradation from that perspective, right? So, for me personally now, knowing if I get an email from a CMO, it’s completely contextual, right?
Cameron Herold: Right.
Brad Weimert: If you say you’re a CMO and I realize that you have a six-person company, it’s actually probably worse.
Cameron Herold: That’s true. It also paints them in a bad light, right? We don’t then take them as serious or then we wonder like, is the company for real or how much of a scam is this? Then we look them up on, “Oh, why you’ve got 150,000 followers on Instagram. I have to find out if they’re fake.” Yeah, it’s hurting you as well.
Brad Weimert: I agree with you. You should pull that mike up a little bit.
Cameron Herold: I even had to help a client years ago. I’d coached them from about 40 employees up to about 400 employees, and we had to retitle the entire organization when they had 400 people. What happened was in the early days, they gave out a bunch of vice president titles to people. When they got to 400 people and they had true vice presidents working for them, we actually ripped off the Band-Aid and then one single day we retitled every single person in the company. So, the true VPs became VPs. Some of the VPs became directors. Some of the directors became VPs. It was a very painful exercise but we just had to rip off the Band-Aid and do it for everybody all at once. And that actually set a new foundation for the company, which was really strong.
Brad Weimert: Brutal. You actually just tighten it down there. Get it to where you wanted it and tighten it.
Cameron Herold: That good?
Brad Weimert: Yeah, I don’t know. Whatever works for you. Well, we can chop out whatever we want to.
Cameron Herold: One day when you have like some guests and get like a big p*nis cover over top of this thing, just put it in front. It’ll be f*cking hysterical. Hang on. Let me just put this over your mike for you.
Brad Weimert: I’ll get Asprey out here, and then we’ll just superimpose over it.
Cameron Herold: That would be amazing. Do a bunch of little clips. Send them to him for promotion.
Brad Weimert: Not do it really on the real one.
Cameron Herold: Yeah. That would be f*cking great.
Brad Weimert: Just give him promotional clips, d*ck mike. Well, he’s in Austin now.
Cameron Herold: He is? I was just about, yeah, he’s in Austin too.
Brad Weimert: I still haven’t seen him since he moved here.
Cameron Herold: Another one I got to reach out. I used to coach Dave.
Brad Weimert: Did you really?
Cameron Herold: Yeah. Long time ago.
Brad Weimert: Oh, that’s funny.
Cameron Herold: I actually coached him on hiring his second-in-command when he was hiring the former president of Amazon Prime, Anna. I helped him recruit Anna into Bulletproof. I actually helped understand… One of the things that we did in her interview, which was really intriguing, was I was worried because I was interviewing her to see if she was a good fit. I was worried that culturally she would be too big business because she was Corporate Head of Amazon Prime, right, going into more of an entrepreneurial 70-person Bulletproof coffee. Turns out she used to run a couple of entrepreneurial organizations, lesbians. So, she had like this kind of crazy fun click in Seattle. She just kind of fit culturally but we really interviewed. I knew on the strength side she’d be really good, but culturally, that was all I interviewed for.
Brad Weimert: Yeah. That’s actually, I mean, I still want to go back to this re-titling thing but that’s actually something that I avoid like the plague now is hiring people in that are coming from a corporate environment that’s much larger. And It’s for the reason that you previously said, right? It’s tying the title to the actual behavior. In a bigger company if you do have the title in particular, but in a bigger company in general, there is far more hierarchy. And so, you have this delegation stream and as a result, the mentality of people from larger corporations tends to be, oh, there’s somebody else to do that part, right? They’re not typically roll up their sleeves and actually execute people.
Cameron Herold: No. And they also don’t operate with the same level of urgency that is needed and practical inside of an entrepreneurial organization. They tend to be a little bit more strategic, a lot more matrix decision-making. They tend to just slow down the projects and the rollouts of things. Whereas in an entrepreneurial company, like now means yesterday. In a big company, now means in a month. And culturally that can be very detrimental.
Brad Weimert: Absolutely.
Cameron Herold: I hired a guy, unfortunately, as my head of marketing years ago back when I was the COO at 1-800-GOT-JUNK? and he was the former VP of Marketing for McDonald’s Canada, VP of Marketing for Dairy Queen Canada. I was like, “Wow. He’s going to be great.” He came in and the first question he asked was, “Who do we get to fill out our FedEx slips?” I was like, “Oh sh*t, we’ve totally got the wrong guy.” I knew right away he was going to be too corporate. Six months later, we had to remove him and hire the right person.
Brad Weimert: So, that’s an interesting line, “I knew right away he was going to be the wrong fit. Six months later, we got rid of him.”
Cameron Herold: Yeah.
Brad Weimert: How long do you actually give? That’s not the advice you would give me.
Cameron Herold: Yeah. When you have doubt, you have no doubt. I think we also then bought into the skills that he was bringing in what he was working on, and we were probably too busy working on the critical parts of the business. It wasn’t that foundational. That was the first year we actually had a marketing budget. So, I think we just saw it as like a non-critical role that was more of an opportunity versus a critical role like coaching our franchisees or recruiting franchisees that we would have acted on much sooner.
Brad Weimert: Yeah, amazing rationalization.
Cameron Herold: Yeah, right. That’s a good excuse, isn’t it?
Brad Weimert: Well, here’s the other side of the rationalization.
Cameron Herold: I was tired, okay? I was busy. I had kids.
Brad Weimert: The other side of the… So, that’s like…
Cameron Herold: I was scared.
Brad Weimert: It was non-critical so we just let it run.
Cameron Herold: Yeah.
Brad Weimert: The other side of it, which everybody I know is rationalized this way, is something was better than nothing and if it was at least moving forward in a critical area but having somebody there at least meant I didn’t have to do it.
Cameron Herold: Yeah. That was probably it too. I have to even look back to see if it was even six months. It might not have been that long. It might have even been more like three because I really don’t remember him being in the role for that long. So, it might have been shorter than that, but it certainly wasn’t like in a week.
Brad Weimert: Immediate.
Cameron Herold: Yeah.
Brad Weimert: Yeah. It’s interesting. You use an expression that I really liked, “When you have doubt, you have no doubt.”
Cameron Herold: I heard that from a mentor years ago when we were talking about firing somebody and it’s just a gut check that you have to have. And it’s interesting, I think women leaders are much better at trusting their intuition than men are. Men will have the intuitive call and then we’ll start using logic to fact-check it or to counter-check it. And women tend to just be so much stronger at knowing and trusting their gut. And I don’t know whether it’s because when we were cavemen, women had that intuition that, “There’s a lion behind me.” They turned around to see, whereas men would be like, “Oh, maybe not. I’ll keep hunting.” And the people that use their intuition are still alive today. The people that didn’t use their intuition got killed. I think we need to be better at that in business. I think we need to trust our computer, our human computer, a lot more than we do.
Brad Weimert: Yeah. Your meat computer.
Cameron Herold: Yeah, that’s true. Like, we just have it, right?
Brad Weimert: Yeah.
Cameron Herold: It just makes sense.
Brad Weimert: Well, I’m so conflicted with that because, on the one hand, I’m super analytical, super deliberate. I want to be as structured and thoughtful as possible. And on the other, it is hard to deny the notion of these hundreds of thousands or millions of data points through your life being stored somewhere in you, even if you can’t logically pull them out.
Cameron Herold: Right.
Brad Weimert: And there is an argument to be made that your gut feeling are those millions of data points manifesting.
Cameron Herold: Yeah. I think Malcolm Gladwell talked about that back in the book, Blink. And, yeah, I think we just have to learn to trust that a lot more in business. And that was where Rob, my mentor, back 20 years ago was saying, “When you have doubt, you have no doubt,” like you just know when it’s the wrong person. You just know or maybe you just have to then work on it, right? It’s like, “I know something is wrong,” well, then work on that one whatever that’s wrong. Have the discussion. Get a coach or a mediator to help you with communication. It’s actually very critical and was one of the early things that Brian and I did at 1-800-GOT-JUNK? was he knew I was the right person. Culturally, I was the right fit. He and I had been best friends. He was my best man at my wedding before I joined him but there was some early conflict between the two of us inside of the organization. We brought a mediator in to actually help us communicate and learn how to communicate on the business level because we were letting other things muddy the water and that coaching was really, really powerful for us.
Now, I actually have this marriage counselor, a very high-powered marriage counselor, who I bring in to work with CEOs and COOs because it’s almost like a business marriage, and it’s the same stuff as a husband and wife fighting and arguing. It’s the same childhood wounds or the miscommunication or the positions you’re trying to bring in. And I think working with someone like that can be very powerful, too, versus having to cut them.
Brad Weimert: Yeah. Well, how do you know which it is? How do you know and if you say it’s just your gut?
Cameron Herold: Well, is it a skill fit or is it a communication fit? Like, is the way that they’re communicating to me pissing me off? What’s really interesting about the CEO and the second-in-command is CEOs have very different personality profiles to what their COO have. Most COOs if we use a Kolbe profile, they have these four numbers that define you. And it all talks about how you start or initiate projects. Most entrepreneurs start the project and plan later, right? We shoot from the hip. We’re winging it, which is like momentum creates momentum. Most COOs sit down logically and they think about a plan or they do a lot of the fact-finding. They research everything first, and the communication barrier starts there because the COO wants to give all the facts and figures the information to the entrepreneur. The entrepreneur just want to get started and figure it out later. Entrepreneurs tend to dump projects on somebody’s plate, expecting them to catch up, and the COO tends to want to ask a lot of questions, which usually then pisses off the CEO because they’re like, “Why are you debating me?” He’s like, “I’m not debating you. I’m just trying to understand this project that I actually like in the first place.”
So, I even do a lot of work around personality profiles with CEOs and COOs to get them to understand each other and communicate better. Similar to the whole book, Men are from Mars. Women are from Venus, men are not hairy versions of women. We see the world differently. We feel the world differently. We approach problems and situations and relationships differently than women. And if we can learn to communicate really well with women and them with us, then we can have a really strong match. It’s very similar in the business world. So, I think when you’re working with a direct report and you want to fire them because it’s not working, is it not working because of their skills or something they can’t change? Or is it something that you can actually learn to understand them better and get them to understand you better so that you are actually in sync?
Brad Weimert: Is Kolbe your preference with personality profiles?
Cameron Herold: It’s the one that I know best. I’ve done lots like I’ve done DiSC, I’ve done Thomas profiles, I’ve done PSI, I’ve done Love Languages, I’ve done StrengthsFinder, I’ve done a bunch over the years, but it’s the one that I know best. We have this organization called the COO Alliance, which is a large mastermind community for second-in-commands. We have all of our COOs do their Kolbe profile and we have all the CEOs do their Kolbe profile but we’ve also brought in thought leaders like Steven Sisler to teach everybody DiSC and to talk about that. Why? Which one do you like?
Brad Weimert: We use DiSC internally but I very much believe the overarching.
Cameron Herold: I’ve done Myers-Briggs.
Brad Weimert: Yeah. Myers-Briggs, Enneagram. I believe that the overarching benefit is that you understand the framework and that we’re all on the same page and using the same language. I think that’s more valuable than which specific framework.
Cameron Herold: Yeah, I agree. So, what we did at 1-800-GOT-JUNK?, again, I keep bringing up this as an example, and I left there 16 years ago but when we were there, every year, we had the entire leadership team do a personality profile and then sit and talk about it with an expert. So, one year we all did Myers-Briggs and then we learned more about each other. Next year we all did Kolbe and we learned more about each other then we all did StrengthsFinder, and we learned more about each other. It was like our constant yearly thing to keep learning more and more about the other person, just as a way to actually get stronger and stronger and stronger with each other. So, it didn’t matter to us which one, to your example. What mattered was, “Oh, here’s another insight that we can have into the person,” because we’re not going to change them. I can’t change you. You can’t change me. But I can understand you more. You can understand me more. And then we can actually be in sync better.
Brad Weimert: Sure. Yeah. And we do the personality profiles on the front end for everybody. Because not only can you understand people better, but you can also opt out of having a certain person in a certain role if they don’t fit the profile that makes sense.
Cameron Herold: Use it as part of your interviewing and hiring process? Yeah. We’ve used it in the interviewing and hiring process and had very big successes. We’ve also had some very big failures. One of the big failures we had was I don’t remember the name of the profile. It was very similar to Myers-Briggs. We had profiled our top ten franchisees and myself, myself because I’d been a very strong franchisee at another group called College Pro Painters. It ended up that my personality profile was the identical one to our top ten franchisees. So, we all of a sudden said, “Well, that’s the prototype we’re looking for.” We had this woman come in who had that exact same profile, but all of the interviewing notes we had for her said no. We had all of the facts and all of the data points that actually said no even though her personality profile said yes. We went against our interviewing. We went against the model that we had in interviewing. A year later, it turned out we were absolutely right. The model was wrong.
Brad Weimert: Yeah.
Cameron Herold: And it was because we had all this other stuff. So, I think what’s important for companies that are interviewing is use the personality profile as one data point, but not as the entire reason for interviewing.
Brad Weimert: Yeah, I couldn’t agree with that more. And I also think that in almost all areas of life, the overarching lesson is you need more than one data point.
Cameron Herold: Well, it might have even been you that told me one time to always get a second opinion on expert advice.
Brad Weimert: Yeah, sure.
Cameron Herold: That’s kind of the same thing, right? Like, the data point on the profile is expert advice but then let’s fact-check that.
Brad Weimert: Definitely, 100%. And I think one of the reasons that I’m so stubborn about that approach things in life is because I grew up in a family of medicine. And so, most people go to the doctor and then they trust what the doctor says, and they say, “Oh, the doctor told me this.” And I’m like, “I got to tell you something, guy. Doctors are just people, and a lot of them are stupid.”
Cameron Herold: Yeah. I’m watching a show right now on Netflix called Painkiller about the OxyContin.
Brad Weimert: Yep.
Cameron Herold: Holy sh*t. And like, yeah, these doctors were influenced by salespeople. They were influenced by marketing, they were influenced by greed. They were also influenced because they only had like 3 minutes to actually get advice on something. And then they ran with that for a year. That’s pretty scary.
Brad Weimert: Well, the pharmaceutical industry, there are so many perversions of what should be there. But even if you omit any corruption, any capitalistic perversion…
Cameron Herold: There are also mistakes.
Brad Weimert: Yeah. You’re also just dealing with humans. And there are humans that have varying levels of understanding and that have opinions. And just because they have some accreditation does not mean that their opinion is the thing that you should follow, right? Or that is in alignment with how you operate. And I think that from a staffing perspective, the same thing is true just because the opinion of the DiSC profile, the Kolbe, or whatever is often right. It doesn’t mean it’s always right and it doesn’t mean that it’s in alignment with how you want to be.
Cameron Herold: It’s funny because what that touches on is the people component of business. You know, the people component of business, I believe, is always the most complex. I was sitting with Marcelo Claure, who was the CEO of Sprint, and we were inside his boardroom and I’ve been coaching him for a bit. I was also coaching his second in command and he said, “Cameron, when will people no longer be the issue?” And I started laughing and like, “Dude, you’re running the 82nd largest company in the United States. Like, we’re trying to cut $4 billion in OpEx. People will always be the issue. You know, marketing you can systemize, IT you can systemize, finance you can systemize, but people? F*ck, man. Like they just mix stuff up all the time.”
Brad Weimert: Yeah. We were having a meeting internally the other day and we were talking about we’re very manual in our sales follow-up process because we have found it to be more effective and that’s the way that we operate and we’re reevaluating some of that. And we got a consultant that we’re working with who wants to automate quite a few things. And my management team looked at it and they’re like, “Yeah. We’re looking at the automation. Is that really the direction we want to go?” And I said, “Well, if it works, f*ck yeah. Let’s fire all the people.” I said, “But the reality is probably the people are going to execute at a higher level.”
Cameron Herold: Right. Yeah. And if you can have the system plus the people, I think you can win. I don’t think everything can be completely automated away or if it is, you really got to be having somebody to fact-check that. It’s like the fox watching the henhouse. You can’t just put the system in place and expect it all to work. You kind of need somebody to watch the fox as well.
Brad Weimert: Definitely. And similarly, if you put the people in place to do the job like sales team, support team, you need management.
Cameron Herold: You need more systems to oversee them.
Brad Weimert: Yes. You need accountability from that whole process. And that’s an ongoing learning lesson for me.
Cameron Herold: And that’s actually where the COO tends to actually play a pivotal role is entrepreneurs tend to be so wired with ADD. So, playing at the strategic level, so playing at the high level that they sometimes miss some of those details and you need someone who can inspect what we expect. You need somebody who can actually do the skip-level meetings and oversee the systems and oversee the people and oversee the numbers and really dig into that stuff and then report back high-level to the CEO and to the leadership team what’s really happening.
Brad Weimert: So, okay, I want to double click on that one for a second because within that example, talk to me about differences in size of the company because you said the COO could be doing that or should be doing that. In some companies, the COO or that role is more strategic, is the one that’s getting reported to. So, what are the size breaks where you need an operations manager or team lead or director of whatever?
Cameron Herold: Great question. So, first off, there’s only three reasons why we start a company in the first place, right? We start a company, they give us money. We start a company to be in control of our time and do what we want when we want and not have to report to somebody. And we start a company to kind of put a flag in the ground or a stake in the ground to say we did it right, we accomplished something. And once we’ve got the company up and running, like you’ve got Easy Pay Direct, you’re up, you’re running, you’ve got tens of thousands of clients. You’re all over like North America, like you’ve got that. You’ve done it. You can keep building it bigger, but you’ve accomplished that. And then cash, I mean, dude, you’ve got lots of real estate, you’ve got cash, you’ve got a good business. You’ve accomplished that, right? You could always have more cash, but you’ve done it. But the free time part is something that most entrepreneurs don’t actually decide to leverage, and it’s often because they’re avoiding their relationships or avoiding paying. They don’t have any hobbies. You’re actually pretty good with your free time as well. You’ve got hobbies, you’ve got passions, you’ve got friends. You don’t completely just do business 80 hours a week.
But the reason you hire a COO is to grow your business so that you can actually have more cash or so that you can grow the business and free up your time so that you can have a life and have time with your family and kids and yourself. Or to actually be able to finally get your business to the success level because maybe you can’t quite get there on your own. You need that second-in-command to do that. At 1-800-GOT-JUNK? that’s what I did for Brian. He didn’t actually have any money when I came in. He had the business, but it really hadn’t scaled yet and he needed somebody to help him scale it to say that we’d accomplished it. So, I helped him go from 2 million to 106 million. So, we’d done it. But that’s the reason you’re going to hire somebody. Your question is like, what’s the title we’re going to be giving or what’s the person we need at each stage? I think of it as companies change and evolve at every one in every three. So, one employee to three to 10 to 30 to 100 to 300 or from 100,000 to 300,000 to a million to 3 million to 10 million.
So, when you’re a one-person company, you kind of need to hire an executive assistant to help you get some stuff done or a person to just help you take some stuff off your plate. That’s your first second-in-command. It’s going to be an executive assistant or an operations person or a project manager or something, right? It doesn’t even really matter what the title is. It’s like Fred getting some stuff done. When you get to three people, it’s pretty much the same thing, right? When you get to ten employees, your first second-in-command is somebody who’s managing people for you. It’s going to be you managing a few people and then someone managing five or six people for you. That’s usually your first director, right? Or a manager. And then when you get to 30 people, you probably have your first management team. You might have somebody overseeing marketing, somebody overseeing IT, somebody overseeing customer, someone overseeing sales, somebody overseeing finance. Maybe it’s finance with no people in it, but it’s still there managing that business area.
You probably have one person managing those people for you or you have your key person that you lean on to oversee everybody. And it doesn’t have to be a COO. It might be a head of finance that oversees people for you or a head of marketing that oversees more of the people for you. When you get to 100 employees, that tends to be when you have your first C-level person or should who’s really overseeing more of the VPs for you, and you might still have one or two functional areas reporting to you as CEO, but they tend to have more of the team reporting to them. And then when you get to the 300-employee mark, that’s when you have your very seasoned leadership team, not a management team anymore. You have a true leadership team that have probably all built companies 2 to 3 times each. They’ve all led lots of teams before. They’ve all had P&L responsibility before. At that point, most organizations can truly turn 100% of the company over to the COO or maybe one or two core functional areas reporting to the CEO and the CEO running everything else.
You get to the thousand-employee mark. It tends to be the CEO with maybe a chief of staff, and then you’ve got the COO running the entire team. And the chief of staff is another weird title that I’ve only started wrapping my head around recently as well.
Brad Weimert: Well, obviously that’s a, I mean, first of all, helpful framework. Second, a framework. And one of the things that is, I think, challenging for entrepreneurs that I see is snapping together with the framework and knowing when to modify or when to deviate from it. And so, there are a ton of entrepreneurs today that grow revenue significantly with less people.
Cameron Herold: Right. So, let’s go back to the revenue side. If you’re at 100,000 employees, you can’t really afford anybody because you need the money, or you start saying, “Okay, I’ll really invest in the business. I’ll hire a $50,000 or a part-time executive assistant for 30 grand a year, they’re based in the Philippines, who can get a bunch of stuff off my plate, and that’ll help me get to $300,000. When I get to $300,000, I can probably hire a couple of fractional people and I can lean on somebody. When I get to a million dollars in revenue, I can probably afford to hire my first director. When I get to $3 million in revenue, I probably have enough EBITDA left or gross margin left to hire my first management team. When I get to the $10 million in revenue, I can actually afford– you damn well should be able to if you’ve got $10 million in revenue, afford to hire your first management team with a true good solid second-in-command in place.” $30 million in revenue, you can start buying people or you can start buying up talent.
Right now, what’s happening in the Bay Area and even now in Austin with a lot of the tech companies moving here, the VC-funded companies aren’t always using all of their money to build out their tech stack and to drive sales and marketing. Often, they’re using the money they’ve raised to acquire people, and they’re overpaying the engineering talent, they’re overpaying the marketing talent, they’re overpaying for the ops talent because they can buy up the people to help them scale. And all of the smaller companies are kind of screwed, hiring the best Bs and Cs that are out there that are left.
Brad Weimert: Yeah. Well, that gets into an interesting discussion around business models and also, I’m going to call it the right way to do business. There’s not one, but what the ramifications are of different business models. So, one of the things you just said was if you’ve got a $10 million company, you damn well better be able to hire people with it. The irony, of course, is that I know a ton of companies that are doing $10 million a year and probably not a ton, probably not thousands.
Cameron Herold: But lots.
Brad Weimert: But a bunch of $10 million companies. And let me actually reframe that. A bunch of companies that hit a million dollars a month-ish, but it’s 100% ad driven and their ego is tremendously involved and they don’t have a great ROI, they just are selling more than they’re spending on ads. And so, their margin is like, net negative or net a few points, but they’re operating at that level.
Cameron Herold: I think you’re right. I think there’s ego involved in that. And I think at some point, those entrepreneurs are kind of doubling down on growth or they’re trying to buy their way to an exit, which can be a very dangerous trajectory to be in. I have a friend and a client who they got to $8 million in revenue, but 50% of their revenue was being spent on affiliate fees, meaning they only had $4 million left in gross margin to then pay for their overhead and their team and their people. They were operating at very, very thin net profit. For me, that’s a very scary situation to be in.
When I joined 1-800-GOT-JUNK? as their COO, within two weeks of me joining, I raised our prices across the board in all 12 cities by 40%. Brian thought I was crazy. The rest of the team thought I was crazy. But what I recognized was when I modeled everything out, we had no money. We had no money to pay ourselves. We had no money to pay for marketing. We had no money to pay our franchisees’ good profits. We had no money to pay the guys in the trucks enough money. We were going to go bankrupt because we didn’t have enough money.
I thought if we’re going to go bankrupt, let’s at least go bankrupt because we’re too expensive, but let’s at least build a model that we have enough after COGS, right? You got revenue minus COGS equals your gross margin. After we get rid of our cost of goods sold, then we have our gross margin, do we have enough left to then pay for overhead and then have enough to actually reinvest in our growth? So, our target number was 20% that we could reinvest 10 in growth and keep 10% EBITDA. So, we just modeled it out and then we acted as if.
I don’t think a lot of companies do that. I think a lot of companies are more focused on how do we buy customers, buy customers, buy customers, grow at all cost. But if they did focus on the rest of the P&L, they could be more successful. I don’t understand why some of them don’t.
Brad Weimert: Because they’re not thinking and they’re not educated and they weren’t taught.
Cameron Herold: Yeah, maybe. And that might meet some of my scarcity, right? I’ve always grown up with this feeling of I need to be able to pay myself first. And I felt bad that Brian, our CEO, was walking to the office and pretending he was walking to the office for exercise. When he was my best friend that I knew he wasn’t walking to the office for exercise, he didn’t have enough money to pay for a car. That’s a scary situation to be in when I’m working for him, right?
Brad Weimert: 100%. Well, and I think you mentioned Silicon Valley or the VC world, which I associate with Silicon Valley and it’s important to delineate the difference between a bootstrap company and a VC-backed company, right? So, a VC-backed company, when you have money that’s come in, the goal is exit out of the gates.
Cameron Herold: Well, look what’s happening with the VC-backed companies now. They’re all saying because of the market situation we’re in, if we point this, we’re in November of 2023, VC-backed companies right now are saying to their companies, “You better get to profitability fast.” You have to cut your burn because now, they can’t raise follow on funding or if they do…
Brad Weimert: So, let me follow that point, right? So, if you’re VC backed, the goal is exit, exit, exit, exit. And the path to that historically has been you can’t build an exit immediately. So, you build and you run to the next raise.
Cameron Herold: Correct.
Brad Weimert: And then you raise more money. But the valuation of the company needs to continue to accelerate. Otherwise, you can have a hell of a time raising the next round.
Cameron Herold: Right now, they’re raising in down rounds, which is obliterating.
Brad Weimert: Exactly. So, if you are doing historically, if you’re VC backed, then running at getting to $10 million and barely profitable or even burning money but continuing to grow the company, that was the rationalization. And there is a use case. But if you’re bootstrapped, don’t be confused that that is the right model to take, right? So, if you’re bootstrapped, then you have to look at, at some point, whether you’re aiming for an exit or not, at some point, you have to say, “Am I making any money? Am I paying myself?”
Cameron Herold: So, I don’t know if you know this, but we almost bankrupted, 1-800-GOT-JUNK? at around the $80 million mark in revenue.
Brad Weimert: Ouch.
Cameron Herold: And what happened was I didn’t have the financial acumen to understand how to oversee finance and work with our CFO. He was actually our VP of Finance at the time. Brian didn’t have that level of acumen. We didn’t understand how to leverage the balance sheet. And we had a VP of Finance who was very quiet, very analytical, very amiable, who kept saying to us, “Are you sure we’re not growing too quickly? Are you not worried that we’re growing too quickly?” He never once kind of rang the fire alarm and said, “Guys, we’re running too quickly. We’re running out of cash. Here’s the budget, here’s the performance, here’s the cash.” He never did that.
And then we weren’t strong enough to listen to him. And the big lesson that we learned, because we had $5 million in cash in the bank, spent $2 million of it on a big construction project, building out in 60,000 square feet of office space, a big renovation, paid $800,000 in taxes, paid $600,000 in bonuses, we drained our $5 million down. We didn’t have enough money to meet payroll one day. And we had 248 people at our head office, 3,000 system-wide. Brian had to go out and raise $420,000 from his mom just to meet our payroll obligations because when we went to the bank to get a credit line, they said, “Oh, we can’t loan to you.” We almost bankrupted the company at a size because we didn’t listen to our people.
The big lesson I got from that was hire people you’re willing to listen to, hire people that can get you to listen. And if you’re not willing to listen to them, hire people you are willing to listen to. But we needed to use our two ears and one mouth in the ratio that we had them and we weren’t. And it’s a pretty scary situation. And we weren’t doing it out of ego, we were doing it out of just complete ignorance. We just didn’t know.
Brad Weimert: Yeah. Wow. I think one of the things that I heard in there and I want to get back to right/wrong ways to run a business or different ways to run a business. But one of the things that I heard in there was hire people that you’ll listen to and I think it’s really, really important, and also, probably get rid of the people that you won’t listen to, terminate the people that you don’t respect.
Cameron Herold: Or they’re too quiet. We respected him, but he was so quiet and so analytical and so shy that he didn’t speak up. And by that point, we needed somebody who would speak up. In the early days, he was spectacular, right? So, then we replaced him with the former head of finance for Business Objects, Crystal Decisions, great leader. She came in and she’d been the head of finance.
Brad Weimert: Did you say, her name is Crystal Decisions?
Cameron Herold: No, the company was Crystal Decisions. They built software for Crystal Reports.
Cameron Herold: I was like, what a great head of finance.
Cameron Herold: Given the Software Crystal Reports, this is like a 20-year ago software package, huge, got acquired by Business Objects who got acquired by SAP. So, she was running a 1,300-person company tech, very solid-solid. She came in and, within the first week, didn’t even really know us, she literally rang the fire alarm, pulled the leadership team together, sat us down, and went, “You guys, you’re going out of f*cking business. Here’s the proof, here’s the data.” She scared the sh*t out of us. That was critical. She was a strong enough leader, even though she didn’t know us well enough to get us to listen.
Brad Weimert: So, what I got from that was this conversation that we have been weaving in and out of around what the operation’s person title is and what their responsibilities are. In that role in finance, when you were at $2 million, $5 million, you could have one person that just managed the books. And then when you got to 10, 20, 30, you needed somebody that could have more foresight in organization in the finance role. And by the time you were at 80, you needed a leader in finance position.
Cameron Herold: Correct. And someone who could not only lead finance, but could also influence and lead the rest of the company. That’s one of the most critical roles of the COO, that more senior second-in-command, they have to be very good at not just overseeing operations. They have to be good at leading people. They have to be good at getting great debate happening. They have to be good at building consensus. They have to be getting good at people to argue and fight for the good of the company and then leave the room being friends. They have to be also good enough to understand each of the functional areas well enough that they can actually work with those different leaders. But yeah, once you get a company to scale, leaders have to be good at all the different functional areas and really good at things like situational leadership, managing conflict, managing projects, cross-functional decision making. It just becomes a very different game.
Brad Weimert: So, today, you coach CEOs and you also spend a ton of time in the COO Alliance coaching COOs. When you look at, we were talking about this before we really pressed record here and I don’t know, maybe I don’t know, sometimes we just start this episode before we start talking.
Cameron Herold: It might be live.
Brad Weimert: It might be live, yeah. You might have heard this already, but there are different ways to run the company, and certainly, nobody wants to have run a business, I think. There are very few use cases I can think of where somebody would have wanted to run a business that was doing a million dollars a month or 10, 15 a year, and then closed the business without an exit, which happens all the time, and then in retrospect, realize that they pulled basically nothing off the table, right? They were paying themselves 50, 100, 150 grand a year, and they ran a $15 million company for years, but they paid for a suboptimal lifestyle. The flipside of that is not spending any money.
Cameron Herold: On growing the business.
Brad Weimert: On growing the business.
Cameron Herold: Yep, and stripping it all away.
Brad Weimert: Yep. Running a small business and all of the growth was forewent because the owner just wants to take all the profit off the table.
Cameron Herold: Yeah, that’s the person who kills the golden goose, the golden goose who’s laying eggs, but they kill the goose to get the eggs out. A very close friend of mine, Jeff Booth, who built a company called BuildDirect. And BuildDirect had raised about $140 million. They were a huge company, very well run, very well respected. Jeff was a very, very strong leader.
And I remember having dinner with him about seven years ago at a birthday party, six years ago, and I asked him, “When are you going to start paying yourself more and pulling more off the table?” He said, “I got about three to four months left and then I’m going to start pulling it off.” And he was only pulling about 200, 250 grand a year off.
Now, imagine running a company that you’ve raised $140 million and you’re only taking 250 grand off the table. A month and a half later, he was fired by the board for nothing that he’d done wrong. But the VCs wanted to put their own people in place to oversee stuff. So, here’s Jeff, and he’s basically lost his company, lost all of his equity for 10 years. It’s a brutal doubling-down strategy.
So, one of the roles of the second-in-command is to truly understand the CEO’s goals, the reason that the CEO is building the business, the vivid vision that the CEO has for what they’re building over the next few years, and for us to play that kind of the Emperor’s new suit role where we tell the Emperor that they’re naked, right? Someone has to tell the king that they’re naked. And if no one tells them that, they’re going to embarrass themselves, they’re going to hurt the company. We have to save them from themselves, which means privately to sit down and say, “Hey, I think you should pay yourself more. I think you should actually reinvest a little bit. I think you should–” we have to be the one person in the company who’s able to do that.
Ideally, the whole leadership team will, but certainly, in that first up until the $10, $30 million mark, somebody needs to be doing it and that is absolutely the role of the COO, which means we often put ourselves in a position where, because we’re telling the CEO the truth, we often put our role at risks, right? I’m telling you what you don’t want to hear, but you need to hear, which means we have to understand how to do that privately, how to do that in a safe space. How do you even come to them and say, like, if I was coming to you, I’d be like, Brad, you’re one of my best friends. You were at my wedding. I care for you deeply. And I pull you aside for a beer. We go for a walk together and I say, “I’m going to tell you something. And I know that this might hurt our relationship. I know I’m putting our relationship as friends at risks. But I need to tell you, because I love you so much and I want you to know.” That’s a really critical role for a second-in-command to play with a CEO. And when the CEO has that person, their job is to make sure they take care of that person because they finally have somebody that they can absolutely gut wrenchingly trust. That’s when you have some really power in your business.
Brad Weimert: The number of humans that I know that have a problem with that vulnerability in general and level of trust in general, much less entrepreneurs that have a challenge with giving up that control, which is I think tied to the sense of vulnerability, is astounding. How do you reconcile that? How do you deal with the fact that entrepreneurs are innately control seeking people that are afraid to expose themselves to another person and allow somebody else to be that close?
Cameron Herold: Well, one is I try to tell the CEO that the only way you’re going to get a great second-in-command is to truly open up and trust, is to truly open up and be vulnerable, and to hire someone that you’re willing to do that with. Very much like getting married. You can’t get into a marriage and be in a marriage and have secrets from your spouse. You have to give them copies of your bank account information. You have to give them your passwords. You have to have full transparency with everything because trust and vulnerability builds a strength. That’s what Pat Lencioni only talks about in The Five Dysfunctions of a Team, that the absence of trust and the fear of conflict that are the two bottom parts of the five-step pyramid, those are so foundationally important.
And I think, for the CEO, it’s to recognize that we have this kind of appeal to what’s important to the CEO. So, it could be protecting their ego, which means telling them privately. Like, I would never tell a CEO in front of the leadership team what they’re doing wrong or in front of the board what they’re doing wrong or in front of an employee what they’re doing wrong. I would never tell them in front of their spouse, but I would pull them aside privately and say, “I need to tell you this because I love you and I care about you. And it’s for the good of the company. It’s for your profitability. I’m going to tell you what I’m seeing. And I’m only going to argue to be heard, I’m not going to argue to be right. I’m just going to tell you what I see and tell you what I believe, and then you can make that decision from there. But I’m doing it because I care for you and because I care for your company.”
And when you tell them in that way and in that safe space, more often than not, maybe not right away, but more often than not, when they have time to digest it, they’re going to come back and go, “Wow, thank you for being that one person who f*cking gave it to me level. Thank you for being the one person who told me that I was naked so that I wasn’t walking in the parade with a three-year-old saying, but the king is naked.” The key, though, is like, again, never do it in front of their board, never do it in front of the banker, never do it in front of the team. You have to do it privately, or the CEO must protect their space. They have to lash out. They have to kind of prove that you’re wrong because they need to stay in charge, right?
Brad Weimert: Yeah, that makes total sense. It also involves a tremendous level of self-awareness on the part of the entrepreneur.
Cameron Herold: For sure.
Brad Weimert: How do you get there?
Cameron Herold: So, this is where Brian and I had a very unfair advantage at 1-800-GOT-JUNK?, right? Brian and I had been in the mastermind community for four years together. We were in the Entrepreneurs’ Organization and we were in a forum together. So, we met every month for four and a half years and he watched me build two other companies as I was watching him build 1-800-GOT-JUNK? So, he knew my strengths. He knew me as a person.
And three months before I joined him, he was my best man at my wedding, so he was also my best friend. We’d cried together, we got drunk together. We did some crazy, stupid sh*t that we shouldn’t have done together. We knew each other. So, we already had that trust. We already had that relationship. We already knew each other’s skills. So, we had that bit of an unfair advantage.
I think what has to happen is you have to work very, very hard when you hire that new second-in-command to build that, which means getting out of the office together, spending time away from the kids or away from the team, getting to play together and go for lunches, go for coffees, go for a run. Brian and I ran together two days a week. We worked offsite together one to two half days a week. We just did lots together to build that trust and communication. And we worked with a couple of coaches and mediators who helped us through conflict situations. So, you just have to kind of do that. It’s hard.
Brad Weimert: Yeah. Do you have to do that? I mean, there are a million ways to do.
Cameron Herold: You don’t have to, but I think you can get some leverage if you do.
Brad Weimert: Yeah. So, there are a million ways to do a lot of things in life and we can look at the results of these million different paths and they can all be similar but be radically different. When I think about the vulnerability element and the taking advice element, could that come from somebody else? Could you get a coach to help you with that part of that?
Cameron Herold: Oh, absolutely. I think, this is where if you look at a high-performance athlete and then say, “How do I model what a high-performance athlete is doing inside of my marriage or inside of my business?” High-performance athletes have psychology coaches, they have nutrition coaches, they have fitness coaches, they have skills coaches. Why aren’t we getting that inside of our business? Why don’t we get a skills coach to give us the skills to be a leader on the different functional areas, on situational leadership, coaching, team building, interviewing, whatever? Why don’t we get a communications coach to help us with communication? Why don’t we get someone to help us around trust and vulnerability and our childhood wounds and all that sh*t, right? Why don’t we work on those things?
I think the best people absolutely do. The best leaders of the best companies have had that stuff for years. The best marriages work on that stuff. The ones who just go through life end up– the reason people grow apart is because they’re not growing together. But growing together is a decision. Growing apart just kind of happens because of a lack of decision. I think it’s the same in business.
Look, you and I are a part of a number of different mastermind communities where we have 10 different masterminds and we learn from peers. We surround ourselves with smart people. We’re inspired. We build networks. I don’t know what the percentage is. Ninety-nine percent of entrepreneurs are not a part of any masterminds. Ninety-five percent don’t even know that they exist. It’s no wonder that most companies are horribly average. They’re just not even aware of it or around it.
And then think about, like, now, get a mastermind community for your COO, put them into the COO Alliance. I also started another mastermind called The Ops Spot, which is a mastermind community only for people that are in managers, directors, and VP roles, a place to give them a community. Get into coaching, get into some mastermind. You got to grow. Or the upside is if you do, you’re certainly going to be better.
Brad Weimert: Sure.
Cameron Herold: And yeah, you can get some bad coaching, you can get some bad advice. But the upside is probably better than the risk of getting some bad advice.
Brad Weimert: Of course, I mean, probably. So, at different phases of business, let’s call it a– I’ll use other metrics too for people that are operating through these, but five people on your team, 15 people on your team, 50 people on your team, I see entrepreneurs behaving differently relative to doing dumb sh*t in the name of culture building or relationship building versus just executing. And so, a lot of the time, I see, specifically newer entrepreneurs, younger entrepreneurs spinning their wheels, attending events, or socializing, networking, instead of just f*cking doing things, just f*cking execute.
And so, when I think about a second-in-command and building a relationship with that person, where’s the balance there? At what size in the business do you have to be where you can be like, “Hey, you know what? We’re going to spend a day a week offsite to build the relationship”?
Cameron Herold: Okay. Yeah, let me walk through what that day a week offsite was and I’ll give you a very specific thing. So, Tuesday morning at 6:30 in the morning and Thursday morning at 6:30 in the morning, I met Brian at his house or he met me at my house to go for a run together. That’s not wasting any time in the business. We wanted to go for a run and we just ran 10K together and we got to talk when we were running. Sometimes we talked about our kids, sometimes we talked about life, sometimes we talked about sex, sometimes we talked about business. We just went for runs. So, that’s no time away from the company.
On Thursday morning at 7:30 in the morning, he and I would meet for breakfast. And then at 8:30, the leadership team would arrive and we would have our leadership team offsite meeting for two hours. We did that every week. So, Brian and I had an hour together to just connect and brainstorm and be strategic around the meeting.
On Friday, we would spend from 8 o’clock until 12 o’clock offsite at his tennis club or my tennis club working with our laptops, getting our work done, but beside each other. And then it was just like going for dinners or drinks together. So, it wasn’t like we were taking time away from the business to go and do crazy strategic team building activities. We were still doing our stuff, but we were doing it away from the team.
We also had a secret room at the office. It was a breakout room that no one knew about. For the first 18 months, we were at this space, and it was this room that had some beanbag chairs and some white boards. And it was a place for him and I to get away from the team and just go, “Holy f*ck, we’re scared,” or we don’t know what’s going on or can’t believe we’re working with all these idiots or can’t believe we get to work with all these amazing people. But it was our space to have, like our war room to build a plan and contribute where no one could see us meeting and worry about us. So, it wasn’t like time away in that sense.
We were also very protective of how much time we spent in masterminds as well. We were only in one, we were only in the Entrepreneurs’ Organization. We weren’t doing the seven masterminds that I think a lot of people, I think a lot of people absolutely waste way too much time in stuff that isn’t head down running the business. It’s like working on the critical few things versus the important many. We were pretty damn good at that.
Brad Weimert: Yeah, I think there are conference junkies in the sort of wantrepreneur or solopreneur phases.
Cameron Herold: Well, there’s also conference junkies, even like running real companies. I’m like, “Dude, are you not backed? Who’s running your company? Are you putting any of this stuff in place? I’m glad you’re getting inspired by everybody, but go get some sh*t done.”
Brad Weimert: Yeah, well, I think that that’s the genesis of the question, is how do you monitor that? And for me, the different phases of business are fascinating because I heard that and I thought, okay, so the morning runs to me, I refer to that as NET time, no extra time. I can just throw somebody else on with my exercise routine, with my sauna time. Great. No extra time involved there. Though, sometimes I need that space to…
Cameron Herold: Just to be by yourself and process by yourself.
Brad Weimert: 100%.
Cameron Herold: Yeah, absolutely.
Brad Weimert: But then I get into the other sort of social hours. And so much of that today is sucked up by other business engagements that are social business engagements or personal engagements because, f*ck, I need some personal time.
Cameron Herold: So, you have kids and you can’t do the after-hours. I was the first employee at 1-800-GOT-JUNK? to ever have children and then I couldn’t do the 5:30 after-dinner drinks every night of the week or going for dinner all the time. I want to be home with my children.
Brad Weimert: Right. So, that is the question then. Do you force it in then, anyway, with your second-in-command?
Cameron Herold: Yeah, I think you have to. I think you have to have date night. It’s kind of like you need to force that in with your wife, right? If you have a wife and kids, you need to have time away from the kids once a month where you take a weekend, a month away just to have a night away at a hotel or even a staycation, or you need to have date night once a week where you go away without the kids. I think you need to. I think it’s very healthy to have that time away with your spouse. I think you need that with your second-in-command to.
Brad Weimert: Okay. Let’s say you’re a $10 million company. What do you think the biggest mistake entrepreneurs are making with their second-in-command is?
Cameron Herold: It’s probably not revisiting on an annual basis. And I’m saying annual if you’re growing it 30% or less a year. If you’re growing at more than 30% a year, you probably want to do this every six months. But every year, at least, revisiting the roles and responsibilities, revisiting the communication structure and pathways, revisiting the kind of org chart, and then reclarifying with the organization as to who does what.
I was coaching a CEO and a COO for about two years. They had about 120 employees, really solid company YPO’er, and the company was really running well. And the CEO said to me on a call, I feel like I have to go kind of screw some stuff up, mess some stuff up, like poke my head into like, dude, don’t. F*ck, we’ve worked so hard to get it to here, stop messing around. The problem was he didn’t know what he was supposed to do anymore because he was able to so successfully delegate, put the systems in place, put the team in place, really had everything running properly. He didn’t know what else to do, so he wanted to go poke his head in and mess things up again. That’s why the CEO and COO need to revisit.
Okay, what are your new projects this year? What could you be doing in terms of skip-level meetings? What could you be doing in terms of your unique ability that would leverage the company again? Or how do we reconnect you with yourself and your spouse and your kids so you can actually enjoy some of this time instead of just deciding to go back in and mess it up? I think that was one thing CEOs don’t do well. They don’t revisit their roles and what they can be doing in the next stage of the business.
Brad Weimert: It’s a great, great piece of advice. What’s a skip-level meeting?
Cameron Herold: Skip-level meeting is when you decide to, and this is what I learned from– I had a mentor who is being groomed as the COO at Starbucks, and we would meet every month for an hour and every quarter for a full day. We did this for two years. I’d go down to the Starbucks head office or he would come up to the 1-800-GOT-JUNK? office. We did it for two years. His name is Gregg Johnson.
And Gregg was coming up to Vancouver one time for a full day with me in Vancouver, and I had my full agenda, everything I was going to cover with him. I was super excited to spend a full day with my mentor. And Gregg said, “Oh, by the way, I’ve got a little schedule change for tomorrow.” I said, “Oh, what is it?” He said, “I’m going to meet you for dinner.” I said, “Yeah, yeah, but I’ll still be meeting you at 8 o’clock in the morning to run our day.” He goes, “No, no, I’m doing a skip-level meeting with your seven direct reports.” And I said, “What do you mean?” He said, “I’m meeting with each of your direct reports one on one for an hour. And then at the end of the day, I will debrief with you without breaking confidentiality on all the stuff you’re screwing up and all the stuff you’re doing well, and what areas we need to work on together.”
So, he skipped over me, met with each of my VPs one on one and asked them questions. And he never said, “Oh, Cameron’s screwing that up” or “Oh, I agree, we need to change that.” All he kept saying was, “That’s interesting. Thank you for that feedback.” Asked more questions. “That’s interesting. Thank you for that feedback.” He kept digging to learn more, to understand more, to do it in a safe space. Then he came up with me and he said, “Here’s a bunch of things that I learned. Here’s some themes that I learned. And how do we approach this stuff?”
He also got a couple of people who said, “Yes, you can tell Cameron that. Yes, you can mention that to him.” But the skip level, it’s important that the CEO goes in and asks questions or goes in and said, “Here’s some ideas I have. I’m thinking of doing this. What do you think?” And they skip over the head of a person.
So, let’s say you have a head of marketing who reports to you. You could go meet with all of the people in marketing and say, “I’ve got some ideas from the company. I’d like to get your thoughts. What do you think?” And then you just say, “Thank you for those ideas.” Or you could just say, “How’s it going in the company? What do you think? How’s it going with your leader? What do you think?” And those insights that you can get in from a skip-level meeting are really powerful.
Brad Weimert: What is the biggest mistake that you’ve made as the second-in-command?
Cameron Herold: Jesus, how many?
Brad Weimert: As a second-in-command.
Cameron Herold: How many? Oh, f*ck.
Brad Weimert: I know some of the personal ones, but…
Cameron Herold: I think the biggest one that I made as a second-in-command was not delegating more soon enough. And I don’t want that to sound trite. I think I kept stuff on my plate for too long when I had very competent people and I could have delegated a lot more of the roles and responsibilities to them to free up my time to be more strategic, to free up my time to meet with the other VPs and C-level that were at 1-800-GOT-JUNK? I was doing too much instead of pulling back and allowing myself to be at that more strategic level.
And I think that’s very true from when we were 12 employees to when we were 3,000 employees. I definitely was doing too much. And it was because, partially, I was avoiding the pain of being in a marriage that I wasn’t happy with and not having hobbies and feeling so much dopamine rush of the work and enjoyment of that, that I think I hurt the company and hurt my team and probably hurt myself as well.
Brad Weimert: I want to make sure that people don’t misinterpret that because extrapolating from what we were talking about earlier, where you are protective of margin and making sure there was margin there, that statement that you just made still keeps the other statement intact, which is you would not delegate to get it off your plate if you didn’t have margin to do so.
Cameron Herold: We wouldn’t have needed any more people from my team to have done what I was doing. My team had all the capacity and by me delegating more to them, I then could have spent time growing their skills and growing their confidence and giving them systems to be able to get more done with less people faster. But because I just kept doing it myself as this kind of radical individualist, I didn’t end up doing that. So, yeah, I could have delegated a lot more without ever hiring another person. In fact, I probably could have delegated everything I was doing and fired 10% of our work base because I had the ability to then step back and do the skip-level meetings and inspect what I expected and then empowered people with systems and processes. We probably could have improved our overhead and our OpEx because I was being more strategic in doing that.
Brad Weimert: Helpful. Cameron, we are running out of time, man. I am so glad to pull you into the studio in Austin, Texas. I’m glad you’re in town for a little bit here. I will enjoy more conversation over dinner in the next few days.
Cameron Herold: Thank you. Same.
Brad Weimert: Where do you want to point people? I want to reiterate The Second in Command book. And I also want to say that I have read it. And I also went and re-reviewed it again. But it really is sort of the manual of what a second-in-command is all the way through to how to put it in place with all of the steps in between.
Cameron Herold: Honestly, it’s the best book I’ve ever written of the six. I used to think that Double Double was the best, and then I thought Vivid Vision was amazing. This is actually the best content that I’ve ever put into a book, for sure.
Brad Weimert: So, certainly, check out The Second in Command. Where else do you want to point people if anywhere?
Cameron Herold: Go to the CameronHerold.com, H-E-R-O-L-D, has all of the links to everything, my YouTube channel. Check out the Second-in-Command podcast where we’ve interviewed about 330 really solid second-in-command companies. If your company does more than $5 million of revenue, absolutely check out the COO Alliance as well and then send anybody in operations to The Ops Spot.
Brad Weimert: Love it.
Cameron Herold: And then check out the barbecue place that’s down the street from your office. What’s that place called? Like, Franks Barbecue or something?
Brad Weimert: There are actually several of them.
Cameron Herold: This little place of picnic tables, go check that place out, you might find me there.
Brad Weimert: I love it. My friend, until next time.
Cameron Herold: Thank you. Appreciate it.
