Second in Command: The Chief Behind the Chief with Cameron Herold
00:24:58 · Cameron Herold, Gaurav Agarwal
[00:24:58] S2: I wanna talk a little bit about the constraints of resourcing then. You've raised money as a company? You're not public yet. [00:25:04] S0: We're not public yet. [00:25:05] S2: How much has the company raised approximately? [00:25:08] S0: A good check, but the last one that we did was 400,000,000. [00:25:11] S2: Yeah. So so when you're raising 400,000,000, you're not entirely cash restrained. So you can make decisions and work on stuff and and have people working on on things. If you were building a business off of cash flow, if you were... If you had to... Let's say ClickUp was... We had no money in the bank. We can't raise any money for the next two years. What do you think you would do differently as an organization? What would you do if you were... You know, if if cash was not sitting there to be able to be burned? [00:25:40] S0: When I joined the company, we were operating like we have cash to burn. But in the last two years, I have tilted the, I have been heavily involved. Of course, our CEO has been involved as well. But we have tilted the DNA of the company to operate like we don't have any money. [00:25:55] S2: Okay. Even though you do?
00:25:55 · Cameron Herold, Gaurav Agarwal
[00:25:55] S2: Okay. Even though you do? [00:25:56] S0: Even though we do. So so the message I tell my team members is plan and have the vision as if you have unlimited resources, but execute as if you have no resources. And if you can show me that you can work that, then I'll... So what that means is I'm extremely reactive in terms of how we release resources. So you have a new idea? Why don't you stretch maybe 10% and show me that there is a green shoot here? And if you can show me that, I'll give you the resource. [00:26:22] S2: I'll get... Makes sense. I like that. So I was at the head office of Seattle twenty years ago. My mentor was being groomed as the COO at Starbucks. And, I was in his offices. I was walking around, and I turned a corner, and there was a massive saying on one of the walls, like, one foot high letters, and it said, grow big, act small. And I think it... They kept that entrepreneurial DNA of, like, let's not waste our cash. I love that idea, though, of, like, okay. Take the idea, run with it, prove it to a point. If you can prove it to a point, then I'll give you funding to go the rest of the way. [00:26:52] S0: And resources flow, really, like, wherever work gets done. Yep. And the interesting thing is people who want more resources don't get more work done. The people who can get more work done with the little they have end up getting more resources. [00:27:05] S2: It's kinda where your focus goes, energy flows, and where work gets done, we'll pay... We'll give you some more money to get more done. I like it. It's so simple. Right?
00:27:05 · Cameron Herold, Gaurav Agarwal
[00:27:05] S2: It's kinda where your focus goes, energy flows, and where work gets done, we'll pay... We'll give you some more money to get more done. I like it. It's so simple. Right? [00:27:12] S0: And I I I try to tell this to my leaders all the time. Right? Like, my budget is only going to go up every year because the business is increasing. I need to spend more money to keep the business growing. So if you think that I enjoy not giving you resources, that's wrong. My job is to allocate more and more resources to my leaders who are effective. I don't win. I don't want this money in the bank. Like, I have this money to multiply it. So show me that you can be an effective leader and I can give you as many resources as you want. [00:27:40] S2: I I love that as a lesson and kind of like a a mindset that you're teaching your team, your leadership team. What other lessons... I mean, you guys clearly at at a thousand people, I'm sure you have a learning and development department, and you've got personal development plans for people. And... You know? But what are... If there were... If you were to say there were, like, two or three kind of core overarching skills that you want leaders to get good at, what would those be?
00:28:02 · Gaurav Agarwal
[00:28:02] S0: I'll give you a very tangible answer, and then I'll give you a maybe philosophical answer. The one thing that I'm trying to train all my leaders on and by leader, I don't just mean my staff, but across the spectrum is systems thinking. And what I mean by that is if I plucked you out of this and I made you the CEO of a company, can you run that business? So I'm trying to coach a lot that the next generation of CEOs and GMs, not the next generation of CMOs or chief sales officers. And most likely they'll still go be CMOs and chief sales officers, but they'll have a holistic view of the business that will make them really, really strong in delivering growth for the business. So we are extremely big on how do we build these cohorts of our future leaders who think like GMs and operate like GMs. And they they just don't... They're not just good at their functional level, but they're also great at being that holistic business thinker. That's big on my mind. But then the second thing, I also coach a lot of my leaders on is how do you be intellectually honest about a problem and use data to to be objective. And that's something that's also important to us. We actually call it the program that we have called, we have designed, we call it bulletproof. Like, how do we make you bulletproof? And one aspect of being bulletproof is knowing the system that you're operating within, but then also can you diagnose problems and communicate those challenges or those opportunities in a bulletproof manner. That means you've thought through all the nooks and corners. You understand what resources are needed. So really trying to make holistic business professionals out of very functional leaders.
00:29:36 · Cameron Herold
[00:29:36] S2: I like that you talked about the systems thinking. My my mentor again who is being groomed as the COO at Starbucks told me a story one time, and he said he was, talking to his CEO who was Howard Behar at the time at Starbucks. And Howard called Greg and said, why is the letter b on the sign at 45th In Wallingford in Seattle not working? And Greg said, I don't care. And Howard goes, what do you mean you don't care? Greg said, that's not a systems question. He said, the question we have to ask is what system is missing or what system can we put in place to ensure that every letter on every sign at all of our locations is always working? Like, that's so great. Right? Is that is that what you mean by systems thinking? Or give me an example of a systems thinking kind of... Can you give us a specific?
00:30:19 · Gaurav Agarwal
[00:30:19] S0: For example, a systems... When I say systems, I don't just mean the technical system, but exactly what you said. What's the combination of process, people, and technology that allows us to get to a certain outcome? And we understand the whole combination and interplay of these things really well so that we can design a system. In your your case, that's a great outcome. The second one could be, a big one in in revenue teams is comp design. Comp design for a seller. To me, that's a systems thinking exercise where what you're trying to do is you're trying to figure out if I pay them more on this. So I'll give you an example. We started introducing services for our big customers because they needed help. We started comping the same dollar commission rate on services as much as we do on seats. What happened because of that was sellers started selling more services. But now services don't have the same retention as the seat because once the account has been sustained and has been set up properly, services will churn. But... So then by design, you you should have thought about all of that stuff sooner than later. And that's what good systems design... System designers do. Like, if I impact, if I... If I'm going to pay the same commission rate on services as much as seats, this is the downstream implication that I'll see on that. So when I took over the sales team, we added a cap. And we said, let's... Sellers want to sell services. Typically, they are selling 15% of their quota and services. But then some people are misusing it and abusing it where they are selling 50% of their quota and services. And we added a cap at 20%.