39. What are the priorities for COO’s in 2024?

Brandon 0:05

Hello, everyone and welcome to another episode of the operations room a podcast for coos. I am Brandon Mensing, joined by my amazing and lovely co hosts, Bethany Ayers, how're things going Bethany,

Bethany 0:16

they're doing really well Brandon, I thought maybe it'd be worth giving a bit of an update on my cannabis legalisation campaign. So, as part of learning about, I think it's called the third sector. I was introduced to the CEO of whatever the rail lobby organisation is called. And so I went to Milbank had a chat with him. And he is not pro cannabis, but was up for just talking about why I wanted to do it, how I should do it go around. And it was a fascinating conversation. First of all, I learned that my best chance of getting it legalised would be through a free vote. So basically, where you're voting your conscience, rather than voting via the whips. And as we were in conversation, he was just like, but what about you? Why limit yourself to cannabis? Have you ever considered running as an MP? No bit who runs for MP? I don't know how to do that. But then I left it and I have been like, pondering it ever since. So like, yeah, because part of what I'm interested in legalising cannabis is having a longer term legacy and impact, like, I know that building businesses doesn't actually fulfil me, and it's not gonna fulfil me on my deathbed. And like, there's an activist element to me and trying to make a difference in the world. Maybe it'd be really interesting to get more politically involved. Yeah,

Brandon 1:46

that's what I set out. Because I think he's right. Like, I think you'd be fabulous at that kind of scenario. Because A, you're a leader, B, you're great communicator. C, you're great on your feet. And the this advocacy thing going on with your interests level. And to your point, pushing on things that matter to you is what is important to you. Sounds like a fabulous idea to me. I'm

Bethany 2:08

too late to the party for this election, because General Elections anytime this year. So it's like a five year plan, but it's percolating. Okay,

Brandon 2:18

s for not an MP but a ce o in: 2024

Bethany 2:57

maybe the area that Kevin didn't go into particular detail on is why does stagflation matter, or why is like circulation, particularly unpleasant. And that's because that you're in a recession. And normally, to get out of a recession, governments loosen cash, so they either make it cheaper, or they print more, and that will stimulate the economy and get you out of a recession. But if you're already dealing with inflation, then you can't create more money or loosen up your money, because that will just feed the inflation. It's a particularly uncomfortable situation for all of us to be in.

Brandon 3:36

needs to happen over the next: 1224

Bethany 4:59

So I think that harkens back to our EOS episode. And my great love of a scorecard and how everybody in the exec team should be looking at that scorecard weekly, and you were a bit more like, well, it was just the CFO, CFO and CEO looking at it. And I think the scorecard is leading indicators, lagging indicators and key elements of low cash flow like maybe rather than full p&l, and everyone in the exec team should be literate in terms of understanding how they play into it, and also bringing assumptions to the surface. If it's in the scorecard, and as part of either your weekly, monthly or quarterly reviews, then you can see whether or not your assumptions are tracking well, you can adjust the bottle there, after, and you can see what your long range forecast looks like. So for me, it's fundamental to how you run a business. So I

Brandon 5:52

have an experiment that I'm currently running with a client of mine. And I've recognised a few things, which is, the more applications you have in play related to CRM data and financial data, the more apt you are to problems in terms of data integrity, and data and standardisation and so on, we're taking a financial p&l tool, and within that financial p&l tool, because it's quite robust and quite good, we're doing our full modelling in this tool right now, in terms of the actual forecast, and all the GTM assumptions are going in there, all the flows of conversion points are all going in there. And what we want to have ideally, it's all hooked in directly into HubSpot, where we're gonna have live data flowing through it, the GTM transparency is going to be there because the actual flow is for every go to market motion that we have. And all the conversion points that we have, are all gonna be laid out in a very visually appealing way to allow non financial users to look at it to do analysis and think through things and also set it up whereby they can actually change numbers that are very clear cut not again, from a financial standpoint, but from a leadership standpoint. So they can play with things essentially, in terms of scenario planning. And then if we can pull this off, then it serves three purposes, I think, which is a, you've got a live budget forecast. Number two, you've got scenario planning, where leadership can actually play with toggles and toggle things up and down a little bit. And the third is perfect alignment with financial systems and financial outcomes, because it's the financial tools, literally the p&l tool. So what I'm curious about right now is whether this is going to work to be honest, because I think it's a super interesting idea depends on the power of the tool that we're working with right now. So number two, that camera talked about was rate of change outside of organisations and what that means for organisations internally in terms of matching that pace, and really adapting quickly to circumstances that are rounded. What's your take on that one,

Bethany 7:47

I was having a really interesting conversation with somebody on Friday we were talking about is a AI, bigger, not as big as the internet, which is going to make the bigger difference. Tech bubbles and how much the world changed after the internet and what's going to happen now. And she made the point of equating it to like taking a step back the Industrial Revolution. And now we're still like, in the digital revolution. And so it's not as AI bigger than the internet, but it's more like the steam engine versus electricity. And we're now at the electricity point. And what does that do? And how does that influence the digital revolution,

Brandon 8:33

I was looking at a study a couple weeks ago, where the big investments that were being made on the part of organisations through the CEO budget was no surprise here, but generative AI used for various pilots within the companies and a lot of effort going into no code or automation in this case. So it feels like those are the two real angles of change inside organisations where there can be a transformative difference. And that's where the budgets are going as well. Out of number two actually comes number three, which is what Cameron talked about was growing people skills, as a consequence of that. And in particular, he talked about these two ladders. And the two ladders are the confidence ladder and the skills ladder. So on the confidence ladder, having enough confidence as an individual to think that you can pull off the next set of skills, you pull off those next set of skills, and then you have to again, go out and give that person confidence they can move on to the next rung and build the next level skills beyond that. And he kind of described that as an interplay. And I think part of that was also the networking side of things where that's really a compliment to both the confidence and the skills build out that interpretation. What do you make of that?

Bethany 9:47

I really liked the structure that he came up with with the ladder with the different rungs. And it's nice to constantly be thinking about skills development and confidence development

Brandon 9:58

and then This question of confidence building, you're dealing with somebody where you're trying to inject that confidence, one of the tricks of the Bethany trade to help make that happen.

Bethany: 10:08

So part of it is praise, but very specific praise. Somebody who absolutely hates speaking their mind or standing up and giving a talk or any level of confrontation, and then the first time you see that they're able to actually show up in the room and talk. My immediate response will be, oh, they're saying something. I might agree, I might not let me debate because I love debate. And I love engaging. And so it's like knowing no, no, first, what I have to do is really praise the fact that they're talking entirely and maybe like, save my debate for later, which is really hard for me. And it was actually a lesson I had to learn. So one is praise. And then the second one goes back to our constructive criticism, or I don't even think like constructive feedback conversations. I had somebody else who reported to me, who was very, very good sometimes and very, very bad sometimes. And I couldn't figure out why. And so in a conversation, it's like, sometimes you surprise me in a good way. Sometimes you surprise me in a bad way. And I want to get rid of the surprising me in a bad way. So how do we work through that? And they did not take it? Well, I didn't know they didn't take it. Well, they only told me in retrospect that they didn't take it. Well, it was like, luckily, it was on a Friday went and complained about me. There were questions about whether or not it was a good fit in the company, blah, blah, blah. But then they came back a couple days later, a week later, and was like, that was a really hard conversation. But it was really good. And I grew, and I can understand, and they raise their bar. And I've also had the I've been the recipient of those hard conversations, like growth comes through discomfort. And it's through that discomfort that you realise you're not trying hard, you're coasting, or I wasn't trying hard, I was coasting. And somebody telling me that I was coasting made a huge difference. And then when you figure out that you can do more than you have confidence to do more. What

Brandon: 11:58

I always try to do at the outset, well, the person is really say, Look, I'm gonna paraphrase this in a way that I don't say like this exactly. But this is the intent behind it, I guess, which is, I don't care about the organisation, companies come and go, What I care about a lot is, I can see within you, there's qualities A, B, and C, and we need to get those on the table, we need to get those out of you. And I need to build trust and confidence with that person where they feel like they can share with me to allow me to take those hidden jewels, and reinforce it back to them saying that, look, you've got this, you need to use it. And let's do this together a little bit. And then try to map out that plan as to what that actually looks like. And do the check in points as you do to kind of build the skills, check in with the confidence build that again, go back to the skills and so on. And I think the sheer repetition of the check ins where you're just calling it out again, because people forget, they forget why they're fabulous in certain respects. So I think just going back to the well saying, Look, Jane, you are fabulous. And here's the reasons why. Again, let's get this on the table, we're ready for the next step. It's just that's your process of just going back to that reinforcement cycle. Because even for myself, I have the same thing. When people can see things in me that I can't see myself. Sometimes they can build confidence in me in ways that can be quite extraordinary, where I suddenly feel like I actually can do this not because I think I can do it. But this person that's more senior believes in me so much that I almost like don't want to weirdly disappoint them.

Bethany: 13:22

And then when you do achieve it, you gain real confidence, because it's something that you actually believe in yourself about now. Let's

Brandon: 13:30

go on a quick break. When we come back, we will have our conversation with Cameron Harrell.

Bethany: 13:38

And we're back. I'm delighted to welcome Cameron Herold to the podcast. So going totally off piste. On our first question, because I'm hoping Cameron, you might be able to answer one that we struggle with every single time, which is the controlling CEO? How do you convince them to let go of some power, I

Cameron Herold: 13:59

always try to appeal to what really matters to the CEO. Our job is to make them look good. Our job is to help them make their dreams happen or make their vivid vision come true. So you need to show them that what they're doing with being so controlling is hurting them. You just say you can do it. But it's kind of like the emperor's new suit. You know, the emperor is getting this fancy clothing made and the tailors telling them they look perfect. Meanwhile, we know that there's no suit at all we know they're naked, someone needs to tell them that they're naked. Someone needs to tell the CEO that although they think they're looking good, although they think that they're doing the right thing. They're only hurting themselves so they can choose to stay controlling. And you're going to tell them that it's not working. And I think if you appeal to their sense of greed, their need for profit, their need for praise, their need to avoid conflict, you show them that all of those things that they're doing are just hurting themselves. They'll usually be open to hear that as well. Actually, if you do it privately one on one, if you ever tell a CEO what they're doing wrong in front of the board, in front of the leadership team in front of other employees, you're dead to the water because they're going to defend their space, they're going to protect themselves. But if you do it privately, and I always say, Hey, can we go for a quick walk? Or can we go grab a quick coffee? Or I just want to tell you something I'm noticing, and I think it's hurting you and your company. I think it's hurting your profitability. I think it's hurting the way that people see you. And it's hard for me to tell you, but can I tell you, they'll be like, Yeah, cuz no one ever tells me the truth. It's

Bethany: 15:33

interesting. So I do it in a slightly different way, in that, I tend to wait and hold my conversation until I notice that they're ready for

Cameron Herold: 15:42

it. And the learner controls the environment, right, if they're not ready to learn, so that's kind of waiting for them to trip and fall. Like if you notice their shoes are untied. And you're going to tell them to tie their shoes, but they're stubborn, they're not going to listen, but when they trip over their own shoelace, then they might listen to you. I find that that's good in the early days of being their second command, maybe for the first three or six months. But at some point, we've built enough trust, that you can actually lean on all of that trust, you can lean on the fact that you've been able to help them to this far. So it's easier to have the tougher conversations when you build that foundation already.

Brandon: 16:18

So maybe they take the conversation in a slightly different tack. You are jacked into the CEO community, you've written a book about CEOs, you know, 1000s of CEOs that you've spoken to over many years, as it stands right now, as we head into 2024. What do you see as the priorities for CEOs talking to all these folks? What are they now thinking about to maybe How's it different from previous years.

Cameron Herold: 16:39

So there's a couple of things happening right now that are very different from the last 14 years, from 2009. Until 2023, the economy in the market was going up, your business was growing. It was like rising tides lifts all boats. So really any leader 35 or under has never known business to ever be tough. They've never built a business through a downturn through an economic crisis through inflation. Right now, we're in a period of quasi stagflation, which is a recession plus inflation happening at the same time. And it's hard for entrepreneurial organisations or CEOs to lead through that. So they have to start understanding how to lead through tough times how to lead through an ideal situations, they have to be able to confront the brutal facts, they have to be able to make decisions and understand the budget and the p&l and gross margins and ratios better. So they really have to have a better handle on the numbers and budgeting than they ever needed before because business just grew because everybody was growing. That's number one. Number two, I saw a t shirt years ago. And it said, right now out there, someone is practising, and when they meet you and head to head competition, they'll beat you. And I think right now, the rate of change in our businesses is so fast, that if you're not growing quickly, if you're not adapting quickly, you're dead. You know, if the rate of change outside your business is greater than the rate of change inside your business, you're out of business. And companies have to adapt with the use of technology, leveraging AI, leveraging automation, being able to work with hybrid workforces, or even bring people back into the office, we don't have years to figure something out, we don't have months to figure something out, we have to adapt to change much quicker. So we have to be able to surround ourselves with a network of people we can lean on, we have to make decisions faster, we have to look at the data. That's something that I think is very different for CEOs. And then I think third is we need to be able to grow our people's skills faster than we've ever grown them before. We used to be able to hire people saying I'm gonna hire you to do a job, I'll hire you based on your past experience, you'll come in and use that experience to do your job. And you know, we'll train you a little bit over time. But when a company is changing so drastically when AI is changing things so drastically when the economy and market conditions are changing so drastically, when a company in Ohio in the United States is losing an employee to a company based in Liechtenstein. All of a sudden, they're going away What the hell's going on here? The world has changed, I think we need to be able to grow our people faster, so that they can adapt because a person's job today is going to be very different in 30 days and very different in six months, and Clos need to be really good at growing people. I've always visualised that our people have to grow in three ways. We have to grow their confidence. We have to grow their skills, and we have to grow their network. So I almost visualise like an employee is climbing up two ladders that are right beside each other and their left hand and left foot are climbing up the skills ladder and their right hand and right foot are climbing up the confidence ladder. So our job is to grow their skills and grow their confidence which grows their skills which grows their confidence, and at the same time as you're doing both Those to try to grow their network so that they're plugged into other communities of people doing similar jobs, so that their resources are able to be shared very quickly. Very similar to a kid who's 10 years old playing computer games, they have this global network of people that they're collaborating with and problem solving with. We have to plug our operations people into operations communities, like the OP spot where they're connected with other people in operations, we have to plug our IT people into communities like seven CTOs, we have to plug our marketing people into communities like trends, we've got to be able to plug our people into communities. And then we have to figure out not the skills around what they do like how to use a software or how to do a YouTube ad or how to run a payroll process. But we need to grow their skills around how to be leaders grow their skills around delegation, situational leadership, coaching, project management, handling conflict, time management, running interviews, kind of the executive functioning skills, so that people can become stronger at leading themselves and leading teams. And I think if we do that, and then couple it with a lot of praise, a lot of gratitude, a lot of celebrating the core values that will grow their confidence. So leaders need to be really, really good at stuff around situational leadership, coaching delegation, running one on one meetings and growing people, when

Brandon: 21:23

it comes to the CEO has a budget and the question of them looking at the budget for 24 and making new decisions this year, they were different from last year, if they're gonna invest more in coaching capability or training capability or growing people's careers or anything in that space as an example, where should they be drawing down?

Cameron Herold: 21:42

I always look for leverage, right? I always look for how can I do something and leverage it so that I get more than one output from that one thing I'm doing. So as an example, let's say that I was bringing in a coach to train people on running proper job interviews, it blows me away the number of managers who interview and hire people, and they've had no training on running interviews. So I would hire a consultant. We'd run a training session on running interviews, I would then have that session videoed, and I would share that video with all other managers and leaders that couldn't attend. I would have anyone who came to that session or so maybe read the book, who are read the chapter from my first book Double Double on people chapter two. And then I would have them kind of do a book report on what did you learn from the books? And what did you learn from the consultants? And what are you going to be putting in place and I would try to cobble together some kind of an internal programme around skill development, which leverages my money. And it leverages that kind of virality part of the learning. The other part is, it's around growing their confidence, right. And I think we often miss that. If you've got an employee base that feels good about their jobs, feels good about their skills, they're going to work harder, they're going to work smarter, they're gonna get better results. So it's doubling down around the praise, it's doubling down around the gratitude. It's doubling down around, celebrating all of our successes. And I think a lot of leaders miss out on that one.

Bethany: 23:05

Do you have any tips on how to give good praise?

Cameron Herold: 23:09

It's really like growing our children, right? When you've got kids, you don't wait to do a 90 day review with your two children to say, Hey, good job over the last three months, you catch them doing something right every minute of the day, and you praise them on what they did, right? And then you also catch them instantly on where they mess up. And you say, Hey, can't do that. Again. This is how you do it properly. It's okay, I still love you. But this is how you do it properly. Right? You grow them and you coach them. Well, leaders need to be really good at that situational leadership of growing people. But we also need to every minute of every hour of every day, look for people doing something right. I remember the story about Howard Bihar, who is one of the four or five CEOs of Starbucks, when Howard Bihar was CEO, he would spend two hours every single Friday hand writing thank you notes to people and different stores inside the 14,000 store network at Starbucks. So every Friday on his desk was a stack of thank you notes, and a spreadsheet. Store Number 12 frappucino record he'd like, hey, store number 12. Congrats on the frappuccino record. Really, you know that's amazing love you see in the field. Howard. Kelly Smith, seven years. Kelly, congrats on your seven years at Starbucks love that you're still with us, Howard. He didn't know who to praise. He didn't know who to think. But there was a system in place. And he was doing two hours every single week. So that was 5% of a 40 hour workweek on praise. CEOs need to put time in their calendar to praise people put time in their calendar to find out who just hit some good results. Find out in the calendar, who's living the core values, and then send out a loom video send out a Slack message, send out a personal note, send out an email, whatever, but spend time catching people doing something right and praising And that has to be in your calendar as a specific working on the business. And if we're so busy doing stuff, we're often doing the wrong stuff, right? What we should be doing is delegating all of the stuff to people that don't have the skills to do it yet, train them and give them the skills and confidence to do that stuff. And then we should be leading versus doing 100%.

Bethany: 25:21

And there's one thing in your praise that you were automatically doing but didn't call out, which is be specific about what you're praising, saying Good job doesn't matter saying Good job, because you did X matters.

Cameron Herold: 25:35

Yeah, good job with the way you took the milk out of the fridge, and you poured it carefully using two hands. And I'm really proud of you for putting it back in the fridge. That's what the kid remembers, right? Not Hey, good job this morning, good job at what mom? Right or good job, what dad. And I also like being very specific on praising that you live with a specific core value in this specific way. Like, hey, great job on delivering what we promised, which is one of our core values. When you got back to that client at three o'clock today. And you told them you're gonna get back in by the end of the day. That's amazing. They were really happy about that. Right? So it's reinforcing praise based on specific things. And doing it very quickly after it happened. Don't wait 90 days to say, Oh, good job three months ago for getting back to somebody. By the way, the book, The One Minute Manager that was written by Ken Blanchard and Dr. Paul Halsey 40 years ago, is still to this day, probably the best book on managing and growing people that exists,

Bethany: 26:30

I was reading all of these leadership and management books at the same time as having a newborn and a two year old. So I was reading all of the parenting books at the same time. And I would alternate between the books. And at a certain point, I was like, I don't need to alternate anymore, these are actually saying the exact same thing. And so you know, it's just great for you to see that as well.

Cameron Herold: 26:49

growing a business is so similar to growing relationships, you know, the CEO CEO relationship is identical in so many ways to a husband and wife or two partners. You have to work on communication, collaboration, making each other look good, having time away from the kids where you can build relationship and have fun and reconnect. You've got to be able to fight and argue and debate for the good of the company, or the good of the family and the good of the family's core values and good family's future. But you do that away from the kids. It's so similar. And yet we think that business is difficult business is so simple. That old book years ago that came out called Men are from Mars, Women are from Venus. And I think in a way, CEOs are from Mars. coos are from Venus, right? We're just different. Men are not hairy versions of women. And women are not more intuitive, fragile versions of men, we're different. We see the world differently, we perceive the world differently, solve problems differently. But if we can work together, wow, we can be an unbelievable force. entrepreneurs and CEOs see the business differently than their CEO does. You know, there's this term that it was kind of created by Gina Whitman, who wrote traction and created the Eos, the Entrepreneurial Operating System. The idea of visionary and integrator is similar to the men are from Mars, Women are from Venus CEOs are going to approach the day to day business in a very different way. But they need to understand how to speak to the CEO, how to collaborate with a CFO, how to delegate projects, to the CFO, how to give the CEO space, how to help the CEO, and the CFO needs to learn how to speak to the entrepreneur, how to solve problems differently, how to approach them differently. If a CEO goes to their entrepreneurial CEO with all the facts, all the figures, all the data, all the graphs, all the research they've done, you've now overwhelmed someone who just wanted the one sentence, we want you to have all the information, but please don't give it to us. And then we're going to come to you and say, give me the rest of the information. You'll be like I wanted to and you didn't want it. Yeah, but it changed now. Right? We need to understand how to work that relationship. So there's a lot that needs to be done around understanding the different leadership styles that exist between the two. The

Brandon: 29:05

question of how the CEO role is changing or evolving, because it feels like we're also going through a bit of a transition, or at least there's different thoughts are emerging as to what the CEO role is the responsibility and whatnot. And I was curious what you think what's really

Cameron Herold: 29:18

interesting around the CEO role, and Harvard wrote an article about this and Harvard Business Review around 17 years ago called The misunderstood role of the CFO, they identified different types of chief operating officers. And I think what we're noticing now more than ever is the different type of chief operating officers emerging more and more companies are realising that you can't just take one CFO and move them into another company and think they're going to work out. The CFO has to match the skills of that entrepreneur. We have to match the personality profile of that specific entrepreneur. And we have to match the stage of business that that company is in. And I think a lot of CEOs are now realising they can't just go out and hire someone who used to be a CFO. They needed To understand a lot more about what kind of clo Am I really hiring, am I hiring more of a mentor, or a partner or the MVP, or the executor, the change agent, like what's this kind of role, this clo needs to play very different from all the other functional areas. If you were the head of marketing for one company, you could probably be the Head of Marketing for most companies. If you were the head of HR for one company, you could probably be the head of HR for most companies. But the head of the CFO, some CEOs run finance, some don't. Some CEOs run it, some don't some oversee marketing. So it's really a delicate balance of really understanding what you're bringing in more than their role changing. I think

Bethany: 30:40

you've spoken to to Brendan's point earlier 1000s of CEOs in your career, do you see any commonalities? Are we all different? Yeah.

Cameron Herold: 30:49

What I've noticed of CEOs is they need to be the strongest leaders of anyone in the organisation, because they're not only leading the functional areas that reporting to them. They're also leading other leaders in the organisation. They're building communication, they're building consensus, they're building healthy debate. They're building strong communication. So everyone knows what everyone's working on. They're good at managing conflict. They're good at managing resources and budgeting and timelines, usually much better than most other functional heads are. Most other functional heads are very good at running their business area. And they usually struggle with the other business areas, like marketing can't speak it, and it can't speak finance and finance can't speak people and people can't speak communications, but coos tend to be able to be okay. And having conversations with all that's pretty unique. It's

Brandon: 31:40

something it's always been in the back of my head is what in the tech CEO space, are we missing because CEOs at large to deal with other types of verticals and industries and so on? I suspect there's learnings out there that could inform the tech CEO segment in ways that we can't see. And I'm just curious, from your vantage point, is there anything out there that you would think that CEOs at large, they have learned something that we have learned that we probably should learn?

Cameron Herold: 32:06

I'll give you one I was coaching the leadership team at HootSuite. And this was Ryan Homes and his leadership team and the CEO, and we're running their strategic planning meetings. This was years ago now. But I remember kind of banging my hand on the table and saying stop, we have to focus on profitability. We can't keep focusing on build or bust. We can't keep focusing on getting to the next round. And getting to the next round. Like, we have to run a effin company. And a company has revenue and cost of goods sold and gross margin and overhead and net margin. And we need to focus on making profitability. And I think tech CEOs have to at some point, it's happening very, very quickly in the Bay Area now where, you know, we're doing down rounds, we're raising money at less than we raised two years ago, like, we're we're raising money just to kind of get to the next payroll. I think tech CEOs need to actually focus on building real businesses now, and hopefully be able to leverage the markets and growth but the whole build or bust, it's very, very easy to keep hiring and keep staffing when you're raising all this money. But that's not real. You know, it's almost like a mirage.

Bethany: 33:12

Having all this free money for the last 10 years, we all forgot how to build real companies. And I think you're right, we need to do that again. We

Cameron Herold: 33:19

were a publicly traded company in February of 2000. And we just sold our company to a US public company network commerce for 64 million, but our transaction wasn't going to close for four months. And this was February 15, march 15. Steve Ballmer from Microsoft stood up and said there was an internet bubble. We're like, no, don't tell everybody. And then NASDAQ crashed by 78%. Over the next six months and our 64 million valuation, the day we got out was 3 million, we lost $61 million worth of valuation, we went from a $24 stock to a $2 stock. And that was a real lesson, right? Companies need to realise that it's good to be able to grow, it's good to be able to leverage your balance sheet. It's good to be able to raise debt and equity financing. But it's also good to be able to grow a real business with a real p&l with real numbers.

Bethany: 34:08

But I think it's going to be fascinating to see what happens while we're in this stagflation moment. And AI has arrived because AI feels like the internet all over again. So primed for a bubble, but we don't really know where the money is gonna land. Well,

Cameron Herold: 34:26

I think what's different with AI, are the same. We're poised for a bubble, but we're also poised for the companies that leverage AI properly are going to absolutely win. It's like the companies that leverage the Internet. If you can leverage a tool that is real, to drive profitability, to drive growth to build a real business, you're going to win. The only employees out there in operations or in marketing or it who are at risk of losing their job to AI are the employees that don't learn to leverage AI today in their job. Right and We're all talking about, you know, chat GPT is one. But there's a dashboard that I love called, there's an AI for that. And it shows 12,500 Different AI tools that exist to do roughly 10,000 different tasks, we should be allowing our employees to play with AI at one or two hours a week, and then come back in on Monday and do a five minute book report or a loom video. And hey, I was playing with this, here's how I'm going to try to incorporate it in my job, we should be leveraging AI more and more inside of our businesses and getting all of our employees to learn to leverage AI inside of our businesses, those companies will absolutely win. I call it almost ideas having sex that if you can take an idea from tech and idea from marketing ideas from a nursing home ideas from somewhere else, those four ideas are going to merge into the idea baby that you're looking for.

Brandon: 35:48

The other thing I was just thinking about is some of this motif of what's changing for CEOs. What does the future hold for CEOs? Do you think? Can I'm thinking a little bit more in my tech field, I guess, but more generally, what do you see it evolving towards as we head off here?

Cameron Herold: 36:02

I think I see. You're doing it with your CEO community based in the UK, there was an article written in Fortune magazine around six or seven years ago, and it was called The Rise of the CEO group. And I think that we're starting to see that we're getting you know, Sheryl Sandberg was clearly the queen bee of all the CEOs, we're starting to see that there is a rise of these communities. And if CEOs are learning from each other, collaborating with each other sharing resources, building the network, I think that's something that's coming for CEOs is the CEO Alliance and the CEO, operating groups, the OP spot, are all great places for us to collaborate and grow like the entrepreneurs did with YPO. And with EO and with Vistage, and with all these amazing groups for entrepreneurs all over the world, I think we're starting to see that that's gonna be exciting for CEOs. You've

Bethany: 36:49

been a COO, and that's been your career, but you are now an entrepreneurial CEO. How has that transition been? And did you have what it took? And how did you find out you had what it took?

Cameron Herold: 37:01

So I'm a very unique human. I was an entrepreneur, at seven years old. I ran 12 or 13 Different entrepreneurial companies. By the time I was 18. When I was 20 years old, I had 12 full time employees working in a company that I started. So I was an entrepreneur, I grew up in an entrepreneurial family. The first real company that I ran when I was in university was a franchise. And I was so nervous of failing that I memorised a 350 page operating manual. So I was an entrepreneur that learned that there were systems and playbooks in place, and if I ran the playbooks, I'd be successful. And those playbooks allowed me to scale. So the transition for me to be an entrepreneur was easy, because I've always been an entrepreneur.

Bethany: 37:48

My follow on question is, for so many CEOs, the obvious next step is to become a CEO.

Cameron Herold: 37:55

Know what that's what's really interesting is most CEOs don't have the entrepreneurial DNA, nor did they have the desire to be the CEO, Sheryl Sandberg as an example, never wanted to go off and run her own company. The natural progression for a clo is really not to be a CEO, most CEOs, it's to run a bigger company, or it's to be a CEO of a better brand, or to be a CEO of a different type of industry. So it's very rare that most CEOs want to or have the skills or the traits to be a CEO. The things that CEOs have to get better at is delegating, growing people, and not overseeing it, letting other people oversee it, right, we have to get better at not focusing on the monthly plan and the weekly numbers, we have to get better at staying focused on the three year vision, the culture, the B hag the core purpose, we have to be better at looking at what's happening with the economy in the market and the trends and plugging ourselves into other communities so that we're learning from osmosis, and then communicating back to the team. Most Clos tend to get fairly focused on the playbooks and the systems. And that matters, but it needs to be other people that are doing it for us. My brother and his wife have been married for 25 years now. And they have what they call blue jobs and pink jobs.

Bethany: 39:15

The rubbish is a Blue Job, by the way, no, but

Cameron Herold: 39:17

no, here's here's what's interesting is is they decided that blue and pink doesn't really met men and female anymore. They're just like, there's a list and like, because he actually likes doing dishes. She likes cutting the grass. I'll make that as an example. So what was traditionally a blue or pink job? They said, Fuck that. They just decided there's differences. If you're going to be a CFO moving into the CEO role, you have to get people to do the old CEO tasks that you're used to doing. And you have to start doing this stuff that isn't natural, that sometimes felt frivolous. Like it used to drive me crazy, frankly, that Brian would walk around one 800 got junk or in the later days because we're in so much square footage on a scooter he would zip around the office dressed in like a Halloween costume on a random Thursday in the summer, I'm like, What are you doing? Actually, he was doing exactly what he needed to be doing, he needed to stir the Kool Aid, he needed to get the energy going, he needed to be the chief energising officer. And I was so focused on the plan, or the numbers or the systems that I sometimes miss that bigger purpose. And I think that's the hard part for CEOs to make that traditional that leap is you are going to start doing the pink jobs instead of the blue jobs, or you're gonna start doing the blue jobs. And so the pink jobs, and you have to be able to release that stuff. Because you will never scale it if you try to do both.

Bethany: 40:36

From what you're speaking earlier around, the COO, being the best leader in the organisation, or the strongest leader for all the different reasons, begs the question, what's the CEOs job, and I think you've somewhat answered it. But I'd love a little bit more on how to make it clear what a CFO and a CEO do, so that there's not stepping on toes and threats and the rest of the problems that relationship can have.

Cameron Herold: 40:59

So I like CEOs to never have more than four or five direct reports, because they also have legal, they have the board and they have culture as kind of direct reports that they have to oversee, CEOs have to care about vision, and culture, and kind of the recruiting and trends. They have to make sure that they asked the leadership questions. So an example of a great leadership question. I was being groomed by the CLO at Starbucks. So Greg Johnson was growing me mentoring me over a period of two years. And he said he got a phone call one day from the CEO, for Howard Schultz, the founder, and Howard said, you know, why is the letter B, on this specific sign on this specific location in Seattle not working? And Greg said, I don't care. The question you need to ask me is what system do we have in place to ensure that every letter on every sign and all of our locations are always working? So that's a leadership question. CEOs have to ask the leadership questions. So even though we noticed that, like, why is that thing broken? The question is, what system is missing, that allowed that thing to be broken, or what system is broken, that allowed that thing to be broken? So we need to notice the things, entrepreneurs tend to notice everything because of our add, we see all the problems, we see all the opportunities, but we need to ask the leadership question about what's the missing system? Or what's the opportunity? Versus why is that one thing, doing what it's doing? We got to ask those questions, and then let the CLO figure out what systems to put in place to fix those fascinating,

Bethany: 42:35

wide ranging conversation today. Thank you so much. If our listeners could only remember and take away one thing from our conversation, what would that be?

Cameron Herold: 42:45

It's that none of this actually matters. The end of the day, this is just what we do to make money. It's just what our employees are doing to make money. None of us are getting out of this alive. What we have to do as leaders if we care about our employees, if we actually care about them as humans, if we care about their problems, their insecurities, their fears, their home life, and not attach it to them, but if we actually care, they'll go through brick walls for us to build the company. And that's kind of the lesson that I always want people to remember is that we tend to focus on all the stuff but what really matters is the people have

Brandon: 43:19

laid so that's a beautiful, poignant way of wrapping up this episode. So thank you, Cameron Harold for joining us on the operations room. If you like what you hear, please leave us a message or subscribe and we will see you next week.