Book: Second in Command

Cameron Herold’s book, “The Second in Command,” focusing on the crucial role of the COO in a growing company. The document highlights that the COO’s function is highly situational and fundamentally defined by their relationship with the CEO. It emphasizes the need for CEOs to understand their own strengths and weaknesses to find a complementary partner, utilizing tools like the Activity Inventory. The text details the various types of COOs, the benefits a COO can bring, and a practical approach to the hiring process, including the importance of “cultural fit and skill,” thorough reference checks, and building trust. It also touches on the transient nature of the CEO-COO relationship as companies evolve and the importance of the COO having a strong ego strength to be comfortable outside the limelight.

Main Themes and Important Ideas/Facts:

1. The Highly Situational and Relational Nature of the COO Role:

• The core idea is that the COO’s role is “at once so critical and so situational.”
• Crucially, the COO’s role is “defined in relation to the CEO as an individual.” This highlights that there’s no one-size-fits-all COO, and the perfect candidate depends heavily on the CEO’s personality, skills, and the company’s needs.
• “There is no single template for what makes an effective COO, other than their fit with the CEO—and every CEO is different.”

1. The COO as the Execution Engine and Complement to the CEO’s Vision:

• A primary function of the COO is to translate the CEO’s vision into reality. As Alan Joskowicz, COO Alliance Member, states, “A COO makes things happen! They are the glue that holds all internal departments and processes together. COOs take a CEO’s vision and find a way to make it a reality.”
• The CEO and COO form a “two-in-a-box” partnership, a “yin-yang” combination where they ideally have complementary strengths and weaknesses.
• The CEO typically focuses outward (investors, media, vision), while the COO focuses inward (operations, systems, teams). Examples include Ben & Jerry’s and Shopify.
• The COO needs to be strategic but also capable of getting into the weeds to fix broken systems and remove obstacles. They need “enough business savvy to know what questions to ask, to get the right answers, to work with their people, and to bring out the best in others by growing their skills and confidence.”

1. The Importance of Self-Awareness for the CEO:

• Finding the right COO starts with the CEO understanding themselves deeply. “Before you know what you need from a COO, you need to understand the kind of CEO you are: who you are, what you do, and what skills you need to bring into the mix.”
• The Activity Inventory is a crucial tool for CEOs to identify their tasks and categorize them as Incompetent (I), Competent (C), Excellent (E), or Unique Ability (UA).
• The goal of the Activity Inventory is to understand the CEO’s “Unique Abilities” – the tasks they are best at, love doing, and would do for free. This helps identify areas where a COO is needed.
• The CEO and COO’s Unique Abilities and weaknesses are ideally opposite, creating a “yin to your yang.”

1. Identifying the Need for a COO vs. Functional Heads:

• Not all growing companies need a COO immediately. Sometimes, the need is for a functional head (e.g., Head of Finance, VP of Technology) with deep expertise in a specific domain.
• The Activity Inventory can help determine if the gaps are in specific functional areas or require a more generalist, systems-focused operator like a COO.
• A COO doesn’t necessarily have deep expertise in one area but strength across several, particularly in “communications, people skills, and leadership.”

1. Types of COOs (Mentioned from “Second in Command” article):

• The text references the HBR article “Second in Command: The Misunderstood Role of the Chief Operating Officer” and mentions the concept of a “Change agent” COO, who helps implement transformation when internal leaders are resistant.
• The text also describes the “MVP” COO, promoted internally due to their integral role to retain them, often starting as an internal lead and growing into the COO title based on contribution and team respect. Cameron Herold’s own COO title at 1-800-GOT-JUNK? “partly came from my MVP status.”

1. The COO as a “System Fixer” and Promoter of Simplicity:

• COOs need to identify and fix broken or missing systems, operating from the perspective that “People don’t fail—systems fail.”
• They should focus on creating simple, scalable systems that the “worst employee in the worst market in the worst conditions could still execute them.”
• COOs need “constructive laziness” – the ability to find shortcuts and more efficient ways to achieve goals.

1. The Importance of Strategy and Tactics and the “Two in a Box” at the Bottom:

• Drawing on Sun Tzu’s “The Art of War,” the text emphasizes the need for both strategy and tactics, with the COO playing a vital role in executing the CEO’s strategy.
• The COO’s role requires continuous recalibration with the CEO.
• The concept of “Two in a Box at the Bottom, Not the Top” suggests that the CEO and COO should see themselves as supporting the organization and its people, rather than being at the top of a hierarchical structure. “Instead, they should be serving the organization by removing obstacles, providing support, and aligning and inspiring people.”

1. Hiring the Right COO:

• The hiring process requires significant time and commitment. “From when we first started talking seriously about the opportunity to when I joined was about four months. By the time I joined, I felt like we already knew each other very well.”
• Hiring should focus on both cultural fit and skill. “Now you have to hire for both cultural fit and skill. If you hire for just one or the other, they’ll both fail.”
• Creating a detailed “scorecard” of required skills and behaviors is essential.
• The job description should be compelling and written by a copywriter to attract the right candidates and repel the wrong ones. It should clearly state the CEO’s personality and the role’s expectations.
• Focus on what candidates say and how they say it, rather than just their resume, as A-players may not have up-to-date resumes.
• Utilizing executive recruiters is recommended, but it’s crucial to select firms that specialize in the appropriate salary range.
• Cultivating a strong CEO network (EO, YPO, Vistage, etc.) is vital for finding candidates and gaining insights. The COO Alliance serves a similar purpose for seconds-in-command.
• Maintaining a “virtual bench” of potential candidates, even when not actively hiring, is a good practice.
• Thorough reference checks are paramount. Go beyond the provided references and ask for contacts of people they’ve worked with. Use the “threat of reference check (TORC)” to encourage honesty. Call up to ten people for key hires. “If that complete, implicit trust isn’t there, then don’t make an offer. It’s as simple as that.”

1. Working Effectively with a COO:

• Trust is foundational. The CEO needs to have complete confidence in the COO.
• Clear delegation is crucial. The CEO should delegate everything except their Unique Abilities. Conversely, the COO should delegate effectively to their team rather than doing everything themselves.
• Building relationships with key employees is important for both the CEO and COO.
• The CEO should avoid undermining the COO by swooping in to fix problems the COO is handling. The CEO’s job is to “grow the skills and the confidence of the COO.”
• The “Operating Manual” developed by Matt MacInnis of Rippling is presented as a brilliant tool for a COO to communicate their working style and expectations to their team.
• The CEO and COO should proactively communicate and build a strong personal relationship to foster trust. “The bedrock [of our trust] is the personal relationship that we have built over time.”

1. The Transient Nature of the CEO-COO Relationship:

• It is rare for a CEO-COO partnership to last the lifetime of the company. Companies evolve through different phases, requiring different types of COOs.
• Cameron Herold’s own experience at 1-800-GOT-JUNK? exemplifies this. He was the right COO for the early growth phase (from $2 million to $106 million), but Erik Church was the right COO for the next phase (from $100 million to $600 million and aiming for $1 billion).
• CEOs need to recognize when the current COO is no longer the right fit for the company’s stage of growth.

1. The COO’s Mindset and Personal Characteristics:

• A COO is a source of energy and optimism for the organization. Their demeanor has a “butterfly effect throughout a whole business.”
• COOs need experience to distinguish between a “problem” and a “disaster” and to see success as different from perfection.
• Early-stage company COOs need to be entrepreneurial and able to create systems from scratch. Later-stage COOs focus on running and scaling existing systems.
• COOs need discipline and flexibility to spot opportunities aligned with the vision.
• Humility is essential for a COO. “COOs have to check their ego at the door and be okay with the fact that the CEO will get most of the limelight.”
• Erik Church’s “Every Magician’s Invisible Hand” piece highlights the importance of the COO being comfortable being the “invisible hand” behind the CEO’s “magic,” foregoing the need for control and being “selfless” during working hours.
• COOs must avoid burnout by maintaining balance and taking breaks.

Key Quotes:

• “Listen Brian, it’s like Goldilocks and the Three Bears. The first time you hire someone close to you—a friend like Cameron—and it works like magic. The second time, you over-hire and you bring someone onboard based on pedigree versus cultural fit. The third time, you need to get it right. You need to find someone who has the rigor and discipline but also believes in and wants to work with an entrepreneur.” – Greg Brophy, founder of Shred-It (quoted by Brian Scudamore)
• “The COO’s role is defined in relation to the CEO as an individual.” – Nate Bennett and Stephen A. Miles
• “A COO makes things happen! They are the glue that holds all internal departments and processes together. COOs take a CEO’s vision and find a way to make it a reality.” – Alan Joskowicz, COO Alliance Member
• “People don’t fail—systems fail.” – Michael Gerber, author of The E-Myth
• “Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat.” – Sun Tzu, The Art of War
• “As a COO, make sure that you continuously recalibrate your role, your responsibilities, and your area of focus with your CEO.” – Harley Finkelstein, President of Shopify
• “The bad news is that hiring the right COO isn’t easy. And hiring the wrong COO is worse than useless. It can kill your momentum…or your company.” – Cameron Herold
• “The deeper your understanding of your skills, weaknesses, and Unique Abilities—as well as the areas you want to delegate—the better your chances of finding the person who likes doing what you don’t and is great in the areas where you suck.” – Cameron Herold
• “When you’ve got your two in a box—a yin-yang combination of CEO and COO—that box belongs at the bottom of any org chart, not the top.” – Cameron Herold
• “If you don’t know where you’re going, any road will take you there.” – The Cheshire Cat in Alice in Wonderland
• “Now you have to hire for both cultural fit and skill. If you hire for just one or the other, they’ll both fail.” – Cameron Herold
• “If that complete, implicit trust isn’t there, then don’t make an offer. It’s as simple as that.” – Cameron Herold
• “The bedrock [of our trust] is the personal relationship that we have built over time.” – Surveyed COO Alliance member
• “His job is to be the Magician; mine is to be his invisible hand.” – Erik Church, COO, O2E Brands

Actionable Takeaways:

• CEOs should conduct a thorough Activity Inventory to understand their strengths, weaknesses, and Unique Abilities before considering hiring a COO.
• Clearly define the specific needs and expected outcomes for a COO based on the company’s stage of growth and the CEO’s profile.
• Prioritize finding a candidate with both the right cultural fit and necessary skills, rather than just one or the other.
• Invest in a well-written, compelling job description that accurately reflects the role and the CEO’s personality.
• Conduct extensive and probing reference checks, going beyond the provided list.
• Foster a relationship of deep trust with the COO from the outset.
• Clearly define and delegate responsibilities, focusing on the CEO’s Unique Abilities and empowering the COO to operate effectively.
• Consider establishing an “Operating Manual” to clarify working styles and expectations.
• Recognize that the COO role may evolve and that a company may need different COOs at different stages of growth.

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