The benefits and challenges of hiring for a COO role with Carolyn Lodge

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Running an agency can be a lonely proposition, but it doesn’t have to be. We can learn how to be better faster if we learn together. Welcome to Agency Management Institute’s Build, a Better Agency Podcast, presented by White Label IQ. Tune in every week for insights on how small to mid-size agencies are surviving and thriving in today’s market with 25 plus years of experience. As both an agency owner and agency consultant. Please welcome your host, Drew McLellan.

Hey everybody. Drew McLellan here with another episode of Build a Better Agency. And this is a great one. So every year in our live peer groups, Danielle and I give a trends report. One of the trends that we have been reporting on for the last couple of years that seems to keep actually growing exponentially, so it’s getting to be more of a mega trend, if you will, is the idea that many agency owners are opting to add a new role into their agency, the role of COO, chief Operating Officer. And honestly, what’s happening is as the business gets more sophisticated, as clients get more complicated, as employees get more complicated, many agency owners are feeling really stretched thin.

And when they look at everything that’s on their plate, the part that they don’t love, most agency owners, you may be an exception to this rule, but the part that they don’t love is the operational side they love. They love the visionary stuff, they love the big picture stuff. They love the understanding where the agency needs to move. They, many of them love the sales, but they don’t love the nitty gritty of operations. And so many agency owners have decided as they’re feeling themselves, be stretched too thin, and they can’t really do all of their job well, that it makes sense to give up the part of the job that’s maybe not in their sweet spot and not something that they enjoy.

And so we’ve seen a great sort of boon of COOs being added agencies, and by the way, agencies, big and small agencies as small as 5, 6, 10 people, and obviously the big agencies. And so last year we decided that we wanted to create a peer group specifically for COOs. A couple reasons for that. Number one, in every agency there’s only one COO. So typically if you have a COO or you’re making room for one, they’re kind of on an island by themselves. They don’t really have a peer inside the organization to talk to who does the same thing they do two, many agencies were adding a COO for the first time, and in some cases were promoting from within.

And that person that was getting promoted into the role wasn’t really sure exactly what a COO needs to do and needs to know to be successful in that role. So we, Danielle and I talked about it, and we have an agency owner in one of our live peer groups who is also serves as the COO in that role. Her business partner is more the visionary, and she’s more, so he’s the CEO and she’s the COO. And she’s brilliant at it and has just the right sensibility about understanding both the numbers and the people sides of the business.

Very detail oriented, very process and systems oriented, very outcome and goal oriented, obviously as an agency owner. And so we invited her to be our adjunct faculty and teach and facilitate the COO group. So that CO group has been going for, we have two of them actually. One for agencies under 20 and one for agencies over 20. Anyway, so Carolyn’s been doing this for about a year, and in a conversation with her at the summit, it occurred to me that she’s getting a lot of insight about sort of how COOs are approaching their job, what they need from their agency owner or agency partner, if they’re structured like she is to be really successful.

And so we decided that it would be a really good conversation to sort of look at the role of COO, what is it? What do they do every day? What pressures do they relieve from the agency owner or the CEO, and what do they need to be successful? So that’s what we’re gonna talk about today. We’re gonna find out from Carolyn, both from her own perspective and her own experience in the role, but also as she’s working with, you know, dozens of COOs and agencies of all sizes, what she’s learning from, from those conversations and the coaching that she’s doing with them. So without further ado, I would love to welcome her to the show.

Carolyn, welcome to the show. Glad to have you.

Thank you, drew. Happy to be here.

So let’s talk a little bit about your own journey in agency life today. You are an agency owner, you serve as the COO inside your organization. So just give everybody kind of your career path in, in the agency that you now own part of and are running day to day.

Definitely. So I actually started entry level as a media buyer and came up through, very quickly, moved over to client services, just operator skillset. I think that’s a natural emergence for folks to switch on over there. So client services for years. I still do some client service work with a few clients, and then moved into operations probably like 15 years ago. I’m coming up on 20 years with the agency and now kind of have my hands in strategy and support of our client services department, but primarily running the agency alongside my partner as the COO. So I’ve done a little bit of the client work and now the on the business.

So what was it about you or your skillset do you think that led you down the operations path as, as more and more agency owners are thinking about A, do I wanna have a CO? And we’ll talk a little bit about what that role looks like inside an agency in a minute, but B, do I have someone on my team who might fit that role? What do you think was sort of baked into you? And when you look at, ’cause as, as we talked about in the intro, you facilitate our COO groups. So you’re working with lots of agency COOs every month. What do you see as sort of the skillset or the personality combo with skillset that makes for a great COO in an agency?

I’m sure it’s different in different industries, but in our world, what makes a great COO?

Right. Well, I think the first thing is the desire to kind of get in and run a project. That was the thing that I think I, from day one at the agency that was apparent for me that I wanted to be the one that was figuring out all the details and putting the plan together and then executing and leading the team. So even as a, you know, 22-year-old, I was doing that right. Where I maybe didn’t have any business doing it, but that was just my natural leadership style. And I think that is apparent in a lot of COOs, you know, in the group and, and those that I’ve worked with there is that sense of wanting to, to put a plan into action. And I think the, the idea of from traction the integrator, right, the operator and the integrator, those words get used interchangeably.

But just that, that sense of being able to take an idea and create a plan around that idea and then put it in motion. Yeah. All the, getting all the pieces and all the parts together to make it a reality. So I think the other thing too is just the so visionary mindset, right? Versus the operator mindset or integrator mindset. The ability to execute on the vision that maybe is somebody else’s or maybe is their own. But again, just putting all those pieces together and making it actionable.

Yeah, I think part of it is the seeing all of the layers of what needs to happen and all the parts and pieces and figuring out how to put the puzzle together. And then I think equally important, I’m curious if you feel this way about yourself and the CEOs that you coach and work with, but the ability that when the puzzle doesn’t go according to plan, ’cause it rarely does the ability to look at all the pieces and quickly shuffle them to make a new picture out of the puzzle,

Right? Absolutely. I think there’s a tendency though, there’s a, a process, there is another type of approach, right? Leadership style that that style tend tends to be a little bit more rigid in approach. And I think the operator has to be nimble Yeah. To do exactly what you said when things don’t go as planned, or when a new hire that they thought was gonna look one way and it looks a completely different way when they get into the seat. That ability to pivot quickly and to make good decisions for the business to execute on the goals. I think that’s, you know, the, you said what, what takes, what does it take to be a COO in our world? And the reality of what we do is that we are managing people, right?

We’re not managing nuts and bolts or a factory line, right? So there is a, a sense of that EQ that’s necessary as well, just to be able to, to manage the people. And, and that’s what gets kind of tricky in our world, right? ’cause the puzzle piece are people and people are sometimes not super predictable. So that ability to work within the HR realm, again, to solve problems and put the right people in the seats for the good of the agency.

One, it’s not just your internal people, you’re also managing expectations and desires of clients or vendors or other people who are ancillary to the internal team. And you have to make everybody want to play nice together and get the result that you’re trying to get.

Yeah, absolutely. Those relationships are key. And as you stated, both internally and externally, right? So to be able to speak to the contract, right? And how you’re billing and support the, the financial needs of the company, while also maintaining and building relationships with vendors and clients, equally important. But kind of two different sides of, of that coin. You need both though, to be successful in this role. Yeah. So it’s not the, you know, not just in the numbers person and not just a people person. Gotta be able to kind of, to fill the gamut,

Right? So for people who are listening, who, for agency owners or leaders who maybe have not been in an organization that had a COO and, and I would say, and I’m, I’m guessing you will too, that for every agency, the COO’s role is slightly different depending on who else is on the leadership team and the skillsets and the agency owners mindset and how much power and control they’re willing to share and all of those things. But in general, what does A COO do every day? Like what’s their, what’s their realm of control and responsibility?

Yeah, as you stated, the role does vary pretty significantly. And that can be everything from, I mean, we have one co o in the group who is still doing some design and others that are, you know, completely fulfilling an HR role. Others that are, are fulfilling more of a financial role than some that don’t have any eyes on the financials, just depending on their owner as you stated. I think there’s a lot that is determined by the mindset of the owner and what they enjoy and what they’re good at. But in general, it’s about the day-to-day operation and managing all of the pieces, right? So the financial picture looking at, you know, project management, what are your processes, the people management. So all of the elements of the business that need to be in a good spot for the business to run effectively on a day-to-day basis.

A lot of times that’s, you know, I mentioned the contract review, negotiating contracts, everything from facilities to, you know, obviously recruitment and retention is a, a big part of it since our people are the most important part of the, the agency, right? But it, it really, I think just that execution on the plan too, right? That I have a phrase that I use with our client services team that everything starts and ends with you. You start with the client with the brief and you end with whatever the, the pro you know, you, your last eyes before it goes out into the world or whatever. It goes to the client. It’s kind of the same in the COO role. If you think about the agency in my role, everything starts and ends with me.

I’m the one that’s assigning out or coming up with a plan or holding people accountable, you know, acro across the board. I’m kind of the keeper of the operation. So a lot of those decisions roll up to me, which is both good and bad, right? That decision fatigue can be challenging, but as you stated, a strong leadership team can really impact that. And that’s something that I’ve benefited from greatly with our leadership team.

Yeah. I, while, while there is decision fatigue, I also find that most agency COOs want to make those decisions. They, they want that control over the outcome and the pa the plan and the execution of that plan.

Yes, absolutely. Yeah. And that goes along with that, that personality, right? Right. The type of person that wants to get in and, and be in in charge. Yeah. That and typically, not always, but typically being in charge of making those decisions is going to come naturally because that’s part of it, right? That that’s the whole picture. If you wanna be in charge, you also have to be willing to make the decision, either the easy decision or the hard decision, but, right. I think that’s a personality trait that does make somebody a good fit for, for the role.

So let’s talk a little bit about the relationship between the agency, CEO, that visionary and the COO. Whether the COO like you is an owner in the business or not. What makes for a good relationship between? So typically I’m, I would say that the visionary is focused on the future of the agency. They’re probably doing a lot of the sales effort on the outside. They might be mentoring some people around the leadership team, but they are very forward focused. They’re big picture focused. So, but they also own the joint. And it’s, in many cases you’re, you’re in some cases an exception to the rule.

Usually it’s the owner who’s in the visionary role and the COO is an employee. So it’s also the owner’s money and the owner’s sort of livelihood and, you know, there is their house on the line for the line of credit and all of that. So what, what creates a great trust because if I’m the CEO and you’re my COO and you’re making all these decisions, the level of trust I have to have in you is huge. So how, how does, how do they work together to create that mutual trust and respect so both sides of that equation can do what they’re best at doing.

Yeah, excellent point. And I think it’s all based in trust. So how do you build that trust? I think the, the main thing is for A CEO to feel very confident that their COO is making decisions with the agency’s best interest at heart, always, right? That nothing trumps what is best for the business. And I think again, typically somebody that’s gonna be right for this role, it’s gonna have that as sort of an innate way that they think about things, right? Yeah. Financially minded. And yeah, that just will come somewhat naturally. But I think on the other side, the transparency between the CEO and COO is really important. If you think about it, trust is based on, you know, that transparency and honesty.

And I think what I hear a lot is that some cos feel like they would benefit it more from knowing more about where their owner is at, right? With where they’re at mentally, what they’re thinking, what the, what their goals are, are around the business or around their own life. So that then the COO can make decisions in support of that. So I think that, you know, we talked about there are some agency owners COOs that hold the financials really close to their chest because that, it’s, like you said, it’s their money, it’s their house that’s on the line. It’s, you know, it, it is their baby. And I think that makes a lot of sense. But to truly get the most out of a COO, I think sharing that information is really important because it, that information and just the, the awareness allows busy to make the best decisions, right?

If with any situation, if you don’t have all the information, it’s hard to know if you’re making the right decision. Right? So that really candid conversation and, you know, honesty about what the, the owner wants for themselves in their life and for the business, what their, their true vision is. That will be helpful for SEOO to be able to, to always work in support of those goals.

So, you know, a lot of agency owners, you’re in one of the owner peer groups. Do you think some of that on the CEO side is maybe they’re a little embarrassed by some of the things they want from the business, whether it’s how much money they wanna make or maybe they don’t wanna have as active of a role or maybe they feel like they should be doing some of the things that they don’t like to do and they’re not good at. Like, it almost feels like some of it is they don’t wanna admit that they’re not good at everything or that they want to make a lot of money or that they don’t wanna give big bonuses out if it means less money in their po. Like it feels almost like it feels like they’re being selfish or Right.

And, which is ridiculous ’cause it’s their business and they took all the risks to start it. But I think a lot of agency owners are a little embarrassed sometimes that they want at, at what they already make or what they wanna make or what they wanna get outta the business. Do you think that’s a common thread?

I do think it is. And it’s an interesting, you used the word selfish. That’s exactly where my mind was at, that I think there’s a fear of being perceived as selfish, which like you stated, yeah, that’s silly. ’cause it’s their business and they built it and they took the risk and there’s no reason why they shouldn’t get everything they want out of it financial Right. Or otherwise. I, and I think again, that’s personality driven to a, a large extent. I think there are some owners who are, have no issue at all with the fact that they wanna make a bunch of money and they don’t wanna work. Right? Right. And there are some that, that they want the perception of what they’re doing to be such that they are the ones doing the work, right? They don’t want it to look like they aren’t actively involved in their own business.

So that’s, I think there’s some, some personal drivers there just based on, you know, personal experience and, you know, everybody’s own needs of what is fulfilling to them and how they wanna be perceived in their community or by their family or by their friends. You know, there’s a lot of layers there. But I do think there’s still that element of, you know, to, to put it out there and say, I don’t want to put, I don’t wanna do big bonuses because I want to take a large dividend this year and I need to have that money to do it. I think for some owners that doesn’t feel good because at their heart, and this probably isn’t true for everyone, but for many owners, they’re really about the people. They love their people.

They’re right, for sure. So the idea that they would be putting themselves over their team feels very uncomfortable. But at the same time, like that’s, you own a business, right? You’re, the team’s not taking the risk. The team’s not, hasn’t been up, you know, sleepless nights worrying about the business. So there’s a, a level of, well

And odds are that the team probably never didn’t get a paycheck. Like most owners didn’t get paychecks or didn’t lend money back into the business, you know, during the great recession or covid or whatever. I mean, I, I do think it’s a just a human reaction, but the truth of it is, you know, it’s, it’s not shameful to want to finally reap the rewards of building a stable, strong business.

Absolutely. Yeah. Absolutely. And the right COO is going to recognize that and want to support that, right? The right COO is gonna make it an owner feel that about the fact that they wanna benefit from the business that they’ve built. Right? Right. If, if you have somebody who makes, makes you feel guilty about that may not be the right person. Right? Right. So there’s, there again, that level of, you know, candor and just transparency around what’s important to you, I think is really important for the foundation of a relationship.

So for the, if A COO is listening to this, how can they encourage their CEO or their agency owner to be more candid and to have some of those conversations if they’re not having that now, or like you said, you and I both know plenty of COOs who have no visibility into the finances other than maybe they know the gross revenue and the a GI and maybe they know where they’re at in the 55, 25 20, but beyond that, they don’t really see it. They don’t know what the owner’s taking outta the business or not. So if I’m a COO and I want to do a better job, and I think one of the ways I could do a better job is to have more candid conversations with the agency owner, how do I begin to create that safe space for the owner to be a little bit more forthcoming?

You know, that’s something I actually talk to CEOs a lot about, and it comes up naturally in conversation because there tends to be a, a point of friction where it’s clear to me as a, an outsider that there needs to be a really candid conversation. So I always encourage, like, go in and be really vulnerable. Let the let your COO know where you’re coming from and how you want to support them, right? The idea of I’m here as your CO to support you and to make you successful. So what can I do to, to help you? And I need to know what you need in order to be that the best partner for you in the business. I think the other thing, and one tool that has worked well for some is the idea of having a, a conversation around your greatest fears.

So understanding di really digging into that, okay, if you were gonna think about what your greatest fear is today, what is it? Is it that you are worried that you won’t be able to pay for your kids’ college? Or that you’re worried that the business is gonna close and ev your whole life’s work will have nothing to show for it after that? Or, you know, just understanding where their mindset is. ’cause I think that stuff is often not discussed, right? And I mean, nobody wants to talk about their greatest fears, right? But it’s pretty insightful just to know where somebody’s at mentally and what they think of, I mean, what’s keeping them up at night? What is the thing that they’re so worried about that it’s, they’re holding onto with some of that right?

Instead of sharing it. I think that can uncover some really important conversations between the two. And it goes to the other side, right? On the COO side, one of the things I hear, you know, I, I don’t want my my owner to think that I’m not working hard enough and I don’t wanna let them down. So I’m just, I continue to say yes and yes and yes. And then they’re calling me in tears because they’re so overwhelmed they can’t do it anymore. Right? Right. And that same, in that same breath, I am, I am encouraging them. Your owner needs to see you overwhelmed. You can’t just continue to take it on and put on a brave face and then come cry to me because I can’t help you and you gotta go let your owner know where you’re at. So it goes both ways.

It’s not just about what the owner needs, it’s also about what the COO needs in order to do their job in support of agency and owner.

Yeah. I, I, again, I think it’s probably a, a willingness on both sides to be vulnerable and human and to admit that you can’t do it all. You don’t know it all. And what you need to get out of the business to feel like it energizes you when you need to kind of refill the bucket.

Exactly. Yeah. And you mentioned this earlier, that the idea that it could be embarrassing that you can’t do it all, who can do it all? I mean, if we could all do it all, then we wouldn’t need anybody else. That’s silly. We can’t do it all in any part of our lives. So to think that we could do it all in the agency world, which is a very complicated nuanced world, is silly. Right? So find the people that you align with and lean into the fact that they may do things better than you do. There are many things that I don’t do well and I lean on the people that do them well in order to be successful.

Right.

Opportunity there.

Well, I I, I do think that sort of a professional maturity is sort of acknowledging there are things that are just not my gift. And so, you know, having, having a partner in crime, whether it’s an employee or a, a business partner or whatever it is that has skillset sets that are different, that balance out some of my areas of weakness, that’s actually a strength is to surround yourself by people who are good at the things that you don’t, you’re just natively and naturally not as awesome at

Absolutely. And the energy that you put into doing the things that maybe don’t come as naturally to you, I mean, you probably spend that energy somewhere else and have it be much more beneficial.

Yeah. Right. Well, and I think too, I think we all know that when we are kind of in our zone of genius, it’s easier, it’s faster, it’s better. It’s the quality, it’s deeper work, it’s more meaningful work. So if you can stay in your lane and do what you’re best at because you’re surrounded by people who do the stuff that isn’t your jam that you don’t like, that you dread doing, so you put it off or you do it late at night, or you do it half-assed or whatever it is, that’s actually a smart business owner

Absolutely. To be efficient and fulfilled. Right. That sounds amazing. Why wouldn’t you want that?

Right? Right. So I wanna take a quick break, but when we come back, I wanna talk about some of the things in your work with all of our COOs, you know, you’re meeting with them every month, you’re, I know you’re coaching some of them alongside of the peer groups. What do you, what are the, what’s on their mind? What, what do they want more of? What are they worried about? What are they focused on? Where are they really having impact on their organizations? I just wanna get a sense of sort of where their heads and hearts are at. Let’s take a quick break and then we’ll come back and dig into that. Hey, everybody, just wanna remind you before we get back to the show, that we have a very engaged Facebook group. It’s a private group just for podcast listeners and agency owners that are in the AAMI community.

And to find it, if you’re not a member, head over to facebook.com/groups/baba podcast. So again, facebook.com/groups/ba b podcast. All you have to do is answer a few questions to make sure that you are an actual agency owner or leader. And we will let you right in and you can join over 1700 other agency owners and leaders. And I’m telling you, there’s probably 10 or 15 conversations that are started every day that are gonna be of value to you. So come join us. All right. We are back and we are talking about this critical role of COOs and you know, as I said in the introduction, we are seeing more and more agencies create this role inside their organization for the first time.

As, as the work gets more complicated, as the, the demand for a sophisticated workforce gets higher and higher, as the client expectations get bigger, even though their budgets aren’t getting bigger, more and more agency owners are sort of saying, you know what, I, I can’t do it all. As we were saying before the break, I cannot do all of this by myself. I need somebody to sort of fill in the gaps where I have a weakness or frankly, I just don’t want to do it. I don’t like to do it. Whether it’s the finance or the HR or the systems and processes. A lot of you agency owners do not love the word system and process.

You know, you’re often the ones that violate both system and process. So having somebody else to create those and sort of legislate those inside your organization, for many agencies we’ve seen it in the last couple years, a huge surge of this COO role. So Carolyn, you’re meeting with them every month. What, what are they thinking about? What are they worried about? What are, where are they really having impact in their organizations?

Yeah, it’s interesting. There’s, ’cause there’s definitely some trends that we see among the groups. I think that people management is probably the, the thing that comes up the most and Sure. Possibly because that’s the most nuanced part of what we do. Right. And there’s layers, so, you know, recruitment and retention, that’s always something, you know, job descriptions, how, how do I fill this role that’s maybe a new role to the agency and I’m writing a brand new job description. So how do I start that when I don’t even know what the role’s gonna look like yet? Right? The other thing that’s been, I, we’ve talked more and more about is career passing. So giving each individual employee their own career path, right? That, that they have, that they’re empowered, but that we’re also giving them direction and feedback on how they can be successful and what areas they need to improve on and where they need to grow in order to take that next step within the agency.

That kind of stuff takes a lot of time. It’s, you know, it’s heavy brain work. And also to personalize each of those career paths just takes a lot of time. ’cause you have to spend the time with the employee to understand their desires and also take a look at their work to see where they need to improve. So just very, again, very personalized approach that can tend to be time consuming, but it’s definitely worth it, especially in today’s world where that’s kind of what people are expecting, right? That that’s what they want. Right. I think there was a time when you could just say, Hey, your career path’s to your own do with it what you will. Right? The world, the world is your oyster. Yeah. And that doesn’t, that doesn’t fly as much anymore there, there’s just a more of a desire to have.

What is the path and what is the opportunity kind of spelled out a little bit more.

That’s why. Yeah. I think a lot of age, I think for a lot of agency owners, they kind of resent that, right? They, they, it sort of ticks them off because they didn’t have it. So they were like, yeah, look, I work 60, I paid my dues, I worked 68 hours a week. You know, I was, I was watching the parking lot and I never left the office till the CEO’s car was outta the parking lot. I had to figure out my own path. I I did my own professional development. I was involved in organizations to show that I wanted to grow. And now these wet behind the ear kids want me to spell out for them exactly what they need to learn to get a raise and a promotion. You know, I mean, I hear that all the time. And so yeah, it

Sucked.

And I, and I get it, I totally understand where they’re coming from, but it doesn’t really matter. It doesn’t matter that it makes you mad. It doesn’t matter that you didn’t have it. The workforce today expects it and other places are giving it to their employees. So if you don’t do it, you are at a disadvantage.

Absolutely. It’s so funny that you say that because I mean, that’s exactly this, the mindset of I shouldn’t have to give you a career path. Like, that’s, that’s your job. You figured that out on your own, just like I did. And to your point, it doesn’t matter. Just like, it doesn’t matter that you weren’t making as much as our new employees are making now until you’d been at the agency for 10 years. Doesn’t matter. Right. Times have changed. Right. Completely irrelevant. Right. But it’s, I think it’s really hard for, for owners to kind of get over that. Well, I worked, I figured it out myself. So you can too, just

Yeah. I, I paid my dues. Yes.

Yeah. Yes. And so now having A-C-O-O-O to help you help them,

Right. Kind of get over yourself too. Yeah,

Yeah, yeah. On that stadium. No, though salary dance. So that’s another thing that a lot of agencies don’t have in place. You know, it’s more of a, we’ll give a raise here when somebody asks or will, you know, respond will, will be reactive. And creating salary brands and more specific expectations around roles with accountability charts and all that jazz. That’s something that we talk a lot about. And that’s, again, being more proactive with your business planning for what could come instead of just being in ara reactive mindset when, when somebody asks for a raise. And

Your point, and, and again, to be able to say to someone, yes, you’re valuable. Yes, you’ve added a lot to the agency, but as you know, to earn that next $10,000, you need to have accomplished these four things and you’ve only checked two of those boxes. So how can I help you check those other two boxes? But no, you haven’t earned the raise yet, or you haven’t earned all of the raise that you’re asking for, because I have been clear about what it’s gonna take to get to that next level. That’s what, that’s the part that I think that who sort of bristle against this sort of miss that it’s actually a tool to coach and groom employees. A, especially if you’re a small agency, that they actually do have a career path.

There is a, I can stay here and earn more money and develop myself professionally and get better at my craft, even though there’s only six people, or 12 people or 20 people. So number one, that, but also that when they come and ask for a raise, you’re not caught off guard with like, well, crap, if I don’t give them more money, they’re gonna quit and I don’t wanna have to try and replace them. So I feel like I’m being held hostage, but okay.

Yeah. It’s essentially doing the work up so that you don’t put yourself in that situation. And again, it’s a system and a process to set, set yourself and the agency up for success. Right. So I mean, it’s, it is it, it can be, you know, call it painful if you would like, because it does take the discipline to do it, but it also creates expectations. Clear expectations then allows you to hold people accountable to those expectations. Yeah. So in the big scheme of things, it’s actually, to your point, it’s a tool, but it does take the work to get to that point.

Yeah.

The other thing that’s been interesting, and we’ve had some discussion around just the, obviously in our business there’s a lot of creative work that is very subjective on how you, how you assess and reward that. Like how do you know if somebody’s good enough to be promoted to a senior designer versus just a graphic designer? And there’s a lot of nuance around that. But again, to your point, by creating the very specific, here’s what you need to do to get to that next level, that career path does support making that decision and gives the expectation of how you will assess their work. You know, is it on time delivery? Is it few client re revisions?

You know, there’s a lot of different ways to look at it. And if you’re lucky enough to have a creative director, often they can be the one that’s assessing the quality of the creative. But that’s something that’s been interesting. I think the, the, when you say what’s on, what are on the minds of COOs, we, we talk about things that are related to every department. It’s not just, I think oftentimes when people think about a COO, they think, oh, you’re just, you’re running the business. But that’s not what we do day to day. But the reality is that the things that are challenging in the day to day for each of the departments are what get bubbled up to the COO. And then that’s what they’re bringing to the group to discuss. So project management is another huge one.

And that can, coming from, that can be coming from the creative side of, you know, struggling to work within this system. Or can you, coming from, you know, budgeting or capacity planning, I mean, there’s so many different elements of even just the project management discussion. That’s something that we discuss a lot and there’s a lot of different approaches there, right? So diff different ways of doing things. And many, you know, there’s a lot of agencies that don’t really handle project management in the same as we would think of typical project management for some agencies that don’t do any capacity planning or any, nobody’s trafficking. It’s just kind of pre for all. It’s pre

For all. Right.

Yeah. Which, depending on the work and the deadlines and, you know, the client mix, that can work. But I, I think

A certain size exactly,

The scaling is when it gets more important. And with, I think we see that across the board scale and, you know, whether it’s you land a new client and they’re more complex, or it’s just the agency is bigger, the, the bigger you are, the more process you need in order to be successful. ’cause you just can’t handle the willy-nilly, no process, no systems.

Well, and you can’t live on tribal knowledge anymore when you’re three or four people, or five people, or maybe even eight people. Everybody can kind of know everything. And everybody’s in everybody’s business and everyone’s wearing a lot of hats. So they sort of catch when somebody drops the ball. But you get past 10 people and you do need to have a system or a process because no one knows it all anymore. Right. And so you’ve gotta have some repository of knowledge outside of people’s brains and memories to sort of be able to catch deadlines and, you know, they, they spell healthcare as one word. They spell healthcare as a two word. Like all of those nuance and details that we deal with every day, that you can only have so much of that in your brain.

Absolutely. Yeah. Yeah. And the more clients and the more, you know, different approaches, the more complicated it gets. Right. For sure.

Right. You know, one of the other things I think a lot of, I just got a call the other day from an agency owner who somebody hacked into their server and is holding their data hostage and is gonna release it on the dark web if they don’t pay them a quarter of a million dollars. So, and honestly, we’re hearing these stories every week. So I’m assuming part of what you guys are talking about is the whole idea of broad and cybersecurity. ’cause agencies seem like a huge target for that.

Yes. Unfortunately, we talk a lot about that. In fact, in the last six months, the amount of, and I don’t know if you’re seeing this on your end too, but I have been hearing about fraud over the last six months. Much, much more than I was previously. I was on a call, there were 10 agencies on the call, and of the 10, five of them had been in a situation where their email had been breached and they had sent a fraudulent wire transfer as a result of that email being breached. And that’s something that we have heard over and over and over. And I think it’s kind of interesting, you know, if, if I step back from that, I think hmm. That there’s a trend here, and maybe it’s happening with all sorts of service businesses, right?

Maybe it’s not agency specific. But when I look at that, many of them were product, the emails were between the agency and a production house. And many of the, in many agencies, the largest bills they pay are for large productions, like large TV shoots or Right. You know, things like that. Large printing jobs. And that’s where they’re getting picked up. So that feels like a really complex Yeah. I dunno what you would call it, but that fraud is very complex,

Sophisticated. Yeah. The spoofing is frightening. So we’ve also been seeing emails to either COOs or CFOs from the owner saying, Hey, I need you to send this wire to this thing, and it’s gotta go out by noon today. And if there’s not a protocol in place, or the CFO or COO doesn’t follow the protocol, we’ve had agencies wiring tens and hundreds of thousands of dollars. And I’m telling you, within three minutes of it hitting the bank, that it’s wired to, it is gone. It is in an offshore bank account and it, and that your local bank is like, there’s nothing we can do.

Right? Yeah. Yeah. We’re seeing a lot of that. And the, to your point, if you don’t have a policy in place, or even if there is a policy, I mean the, the number of times that a policy is just for whatever reason, ignored and be right, because of exactly what you’re saying, when they think it’s from the owner, all of a sudden there’s this urgency of, I forget all of our rules and I’m just doing it. Right. That kind of autopilot. So the importance of making sure that everyone is aware of the policy, red flagging anything that is a wire anytime. Like we should never be wiring, why are we wiring funds? Right? I mean that Right. There’s

A red side, right. Without, without actually verbally talking to one another going, am I really supposed to wire this money? Right. I mean, they’re

Exactly. Yeah.

Yeah.

You know, the other thing that we’ve been hearing about is agencies who have received emails with a, a spoofed email from the COO or the CEO attached as proof that they’ve approved it. So see, attached your CEO has already approved this and there’s a, an email that they’ve just created, right. Wasn’t from them, but if that, if that finance director isn’t double checking and getting the verbal consent that that’s been requested, there’s enough checks and balances. Yeah. So that, that’s been a huge topic. And the cybersecurity insurance, you know, that hovering yourself, making sure you don’t have two factor authentication on every system you possibly can.

Now, there’s a lot that can be done done, but I think a lot of times agencies with, for a period of time, I think agencies didn’t feel like they had anything that was too sensitive that they needed to protect. Right. You know what I mean? Right. There was an element of like, what are they gonna come steal from us? Like Right. Our, our files. But the financial side is obviously a huge impact to an agency and just the, the amount of it is, has dramatically increased. Yeah.

So

Not a fun topic.

No, no. But an important one, and again, this is where somebody who is more system and process minded and more detail oriented can be super helpful to an agency owner who maybe isn’t wired that way or assumes everybody’s, you know, we had a policy that we wrote five years ago, nobody probably even knows where it is. Couldn’t find it on a computer if we tried, but we’re covered. You know, again, having, having that partner in the business that’s thinking more about the nuances of that is, I mean, literally could save you hundreds of thousands of dollars. Yeah.

Yeah. Absolutely. What,

What about ai? I, I mean, all of the agencies that you and I know are, are trying to figure out how to integrate AI into their work, into their offerings, both how they’re running the business internally, how they’re serving clients externally. What role is the COO playing in that sort of realm?

Yeah, I think it’s, there’s a couple different components of it. So contracts are one thing, client contracts. So a, a clear policy around how the agency is using AI and what clients can expect. And then also with contractors and employees stating what the agency’s policies are are around using ai. So to what level can we use AI as a tool? What is acceptable, what is not acceptable? So being really clear about how we use AI as an agency and how you are permitted to use it and how you are not, I think there’s, there’s still a lot of gray area for a lot of agencies around that, but the, the contract side and the, you know, like contract agreements, right? There’s, we’ve had some agencies to have added it into contractor agreements and then have had contractors come back and say, we’re not finding it because we use the ai and so we can’t follow your policy so we’re no longer a contractor that is, you know, suitable for you to work with.

So. Right. I think it’s un uncovering a lot, especially in how contractors create their work. And obviously it depends on what type of work they’re doing and how they would use ai, but there’s a lot of, there’s a lot of room there to just put curbs around it. Right?

Well, I mean, just ownership and privacy and I mean, there’s just lots of big important topics around that that have to be sussed out and protected.

Yeah. Yeah. I think there’s still a lot of question too of sure, you know, if we wanna use the AI for our client, does that put them at risk? Because then their data is shared data. So just being, again, very transparent with your clients about your intentions and how you’re using their information, not stumbling into something without being really aware of the implications.

And our CO is also involved in just the sort of the experimentation of what, what AI tools are we gonna even think about using? Or how are we, how are we creating a task force inside the agency so that we don’t fall too far behind? Or are they involved in that too? Or is that somebody else typically that they’re maybe overseeing that’s doing that work?

Yeah, I think it depends on the, again, the agency and, and where there’s a skillset. So if there’s a somebody that’s more technically inclined, if you’ve got a tech specialist, they’re typically leading that. But having an, I mean, many agencies have an AI task force in place right now, right? Where they’re, they’re starting with a survey of how, how is the team using it? What’s the comfort level of, you know, of the team? There are people within teams that haven’t touched AI that have literally never used anything except for maybe now when they Google something and see there’s the, your head that pops up. But I think getting a gauge on where the staff is at is really important. And that often will come from the COO level, just because you’re getting, you’re, you’re, it’s an assessment of what the skillset and comfort level is of the staff.

But then as far as, you know, testing tools and implementing, that’s probably shared responsibility between COO and tech team. Although the COO is likely gonna be the one that is holding everybody accountable to whatever policy is decided upon. Right? Right. So that’s the level, I think that’s where the ownership and involvement of A COO is really important, because that’s typically gonna be top down as far as ensuring that those policies are followed.

Yeah. As we round to the top of the hour, one of the things I wanted to make sure I asked you, I know that one of the things you’re doing is you’re helping some agency owners find the right COO. And so if somebody’s listening to this and going, I want one of these, I I need a COO, are there two or three interview questions beyond sort of the obvious ones that you think if you’re interviewing someone, either an internal candidate or an external candidate that are particularly enlightening to ask in an interview process for this role specifically?

Ooh, that’s a good question. Drew. Really putting me on the spot here. That’s right.

I think

It’s

A, I like to end with a hard question. Yeah.

Yes, you do. Yes. Yeah. I think it’s a series of questions, honestly. And I think personality assessments can also be really helpful. Mm. Because oftentimes what people say in an interview doesn’t necessarily represent how they actually think. And to be honest, many people who are good in terms of EQ are gonna tell you what they think you want to hear versus actually what’s going on in their head. Right? Yeah. There’s a little bit of that. But I think, again, going back to, you know, how do they show up in a, a leadership capacity, even if they aren’t the one that’s in charge, quote unquote, are they the, the type of person that when there was a group project in school, they ran it. That’s, that’s a good, good assessment that is habitual for many people, right?

That they just, they just naturally fall into that leadership role. I think the willingness to confront difficult conversation, so wi willingness to address conflict and look at that as an opportunity for growth instead of something that is detrimental. I think that’s really, really important. So there has to be a level of comfort with

The uncomfortable

Yes, absolutely. Having those hard conversations and sometimes pointing out the things that don’t feel very good. Right. Going back to that conversation of your greatest fears, that doesn’t feel good for anybody, but it’s really helpful to understand the other person’s story so that you have more awareness of how they’re making decisions and what might be impacting their mindset. So the, the desire to understand people and to address conflict in a really natural and beneficial way. Right. Being proactive with that conflict versus ignoring it because it’s hard. That’s component. And

I would, I would think being able to do that with the agency owner, which is a whole different level of discomfort, would be critical. Right? I mean, this is your right hand person. They have to be able to call you out on your stuff too.

Yes. Absolutely. I mean, it’s a two-way street. If you’re gonna depend on each other, if you’re gonna have that level of trust, that’s Im imperative to be running a successful business, you have to be willing to go there.

Yeah. Right.

That vulnerability.

What else would you ask?

So I typically, process wise, I typically start with the, the personality assessments, talk about conflict, talk about, you know, how do you show up in that style in a, in a group dynamic, how do you typically show up? A lot of times I’ll talk about and ask about just background because the, the role that somebody had been in previously can often prepare them for A-C-O-O-O-O role. So project management, client services. If you think about client services as a kind of training ground for COOs, dealing with both internal and external audiences, right? Making things work well inside the agency, but also being that person that’s talking to often to vendors that the clients as well, and being able to represent both the agency and the client in a way that is mutually beneficial.

That’s a skillset that is important in the COO role also, right? Because you’re representing the team and the employees and the agency. And so balancing all of those different facets of the, the agency is really important. And I think that typically, and again, this is a generalization, but many CEOs come from that client services or project management role because that’s the type of people that take charge of stuff. But we also see, you know, I, I mentioned one CEO that’s, that came up through a desire track and is still doing some design and has that natural skillset. So sussing out where the opportunity has been to show that skillset or not, because there may have been a situation where an agency owner hasn’t seen that skillset come to play with a current employee, but it could just be because they haven’t had the opportunity.

Yeah. And I will ca caveat that though, by somebody that’s gonna be a good COO will find the opportunity to show you their skillset. Yeah. They’ll come in and ask to be in charge of, of something. So

That, or just take charge

Or just, yeah. Not even enough. Right.

Yeah. Right.

Yeah.

This, this, this has been a great conversation. Thank you for spending the hour with us and helping us understand not only the importance of this role, but sort of what it looks like and what it can look like inside an agency. I think this has been super helpful. If folks want to track you down, if they wanna talk more about this role, I am, I’ll put it in the show notes, obviously how people can learn about the COO group that you facilitate for us. But if they wanna track you down, what’s the best way for them to find you? Is that LinkedIn? Yep,

Probably. I’m on LinkedIn. Carolyn Lodge on LinkedIn. Okay.

All right. Awesome. Thanks so much for being with us. Appreciate

It. Thank you, drew. I appreciate it.

All right. Alright guys, this was hopefully an episode that got you thinking maybe a little differently about your team, maybe if you’re the owner of the agency, a little differently about your role and maybe parts of the role that maybe you don’t have to do anymore, or how you can envision an agency growth path that leads you to being ready to have a COO, both in terms of size and complexity and revenue and all those things. But I will say, like I said on the outset, we are seeing more and more people successfully add this role and I cannot think of an agency owner that has added this role that was not happy that they added it. So if that’s you, if you’ve been thinking about it, hopefully this gave you some food for thought to think about.

Not only if you wanna do it, but maybe who would be the right fit for you, because as Carolyn said, it’s gonna be a little different for every agency and what you are willing and not willing to share with, and kind of open the kimono to that partner and, and letting them really help you run the business of the business. So hopefully this was helpful. Lots of, lots of things to think about and lots of things to sort of plan for the future. As you’re thinking about 2025, this may be on your to-do list for 2025, and I think you have a pretty good recipe for how to sort of build out this kind of a role. So if you have interest in the COO group, if you have a COO or you are a COO and you have interest in joining Carolyn once a month for about 90 minutes with other COOs problem solving together, just head over to the Agency Management Institute website and under the membership tab you’ll see the COO group and you can learn more about it there.

Guess what? I’ll be back next week with another guest thinking a little bit differently about your business. I’m super grateful that you came and hung out with us today, so thank you for that. And of course, a huge thank you to our friends at White. Label IQ. As you know, they are the presenting sponsor of this podcast. They make it possible for us to hang out together every week, and we are super grateful to them. They do white label design dev and PPC for agencies all over the world. And because they’re born out of an agency, actually an a MI agency, they really understand how to structure the way they work with agencies so that everybody makes money client’s happy client gets what they want. They’re, they’re very service oriented folks.

So check them out at White Label IQ dot com slash AAMI to learn more about them. Right? I’ll be back next week. I hope you will too. Thanks for listening.

That’s all for this episode of AAMIs Build. a Better Agency Podcast. Be sure to visit agency management institute.com to learn more about our workshops, online courses, and other ways we serve small to mid-size agencies. Don’t forget to subscribe today so you don’t miss an episode.