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- [00:00]
Roland Frazier
That was a big deal and people were investing in ESG funds, and now that seems to be on the wane a little bit. So the other thing is, is that, like the executive suite itself, you have this wide variety of perspectives. You've got Nvidia with 60 direct reports to the CEO, which probably shouldn't all be considered the executive team, but then you've got people that basically say, it's just me and I don't want any reports. So I don't know, it's. It's kind of interesting and I thought it'd be cool to talk about. So I'm going to give you a couple things. Basically, it's. My question is, how is the modern C suite? The whole executive board, basically. Hey, everybody, welcome to another episode of the Business Launch Podcast with me, Roland Frazier and my wonderful co host, Ryan Dice, who is basically going through some sort of drilling activity or construction, I believe. Right?
- [01:04]
Ryan Dice
Yeah, it's my favorite. Like, right. Right when we decided to start, they, you know, somebody's like, you know what I want to do?
- [01:10]
Roland Frazier
Let's.
- [01:10]
Ryan Dice
I'm going to run a circular saw roundabout now. So that's what we're doing. Yeah. So if you.
- [01:17]
Roland Frazier
Are you, like under a medical clinic or something, as you know what, Clearly. Yeah, maybe production studio.
- [01:23]
Ryan Dice
I'm just doing it so I can sound, you know, more manly, more masculine. I'm trying to bring in, you know, a more masculine soundtrack.
- [01:30]
Roland Frazier
Tool Time edition of Business Lunch. I like it. Speaking of tools, I was thinking about or changes and remodels. I was thinking about something that was kind of interesting, which is how the C Suite has changed. Fortune magazine ran an article called how the C Suite has Changed over the last. Since 2015, over the last 10 years. I think that really, especially over the last five years, because we've went through kind of boom time to pandemic, to everything shutting down to crazy pandemic, boom time to slow down to potential recession. It's been kind of interesting and there have been some really cool and not so cool trends. There's been DEI diversity, equity and inclusion, which they had chief DEI officers for a while, and then that seems to be out of vogue now. And they had esg, which was, I think, environmental, social and governance. And that was a big deal and people were investing in ESG funds. And now that seems to be on the Wayne a little bit. So the other thing is, is that like the executive suite itself, you have this wide variety of perspectives. You've got Nvidia with 60 direct reports to the CEO, which probably shouldn't all be considered the executive team. But then you've got people that basically say it's just me and I don't want any reports. So I don't know, it's, it's kind of interesting and I thought it'd be cool to talk about. So I'm going to give you a couple things. Basically it's, my question is, is how is the modern C suite, the whole executive board basically adapting to the complexities of this crazy roller coaster of change of businesses that we're on and a couple of little stats and before we get into it, said C suites at Fortune 500 companies grew 23% on average between 2018 and 2023, from 6.7 executives to 8.2. So the boards are expanding. Skills required for established C suite positions have increased more than 20% between that same period. And I thought that was interesting because we'll see that one of the trends is a lot of C suite players are being asked to take on what were traditionally roles of other C suite players, even though there's more people there. So I thought that was kind of interesting, more that like they're, they're getting cross trained, I guess around other things. And then 82% of chief information Security officers, which is a relatively new C suite position, now interact directly with CEOs, which kind of shows you the importance of security. And we know lots of people now, our law firm friend Grant, their office handles multiple hostage situations where hackers come in and take over and request Bitcoin. So that's a big deal. 80% of those chief Information Security Officers participate in board meetings. So the first thing is, it seems like this is expanding as a result, more of complexity, more than just we're getting more bureaucratic. And I wanted to kind of see if you had any thoughts like in the people that you've talked to, you've got Chief Sustainability Officer, that Chief Information Security Officer, Chief Growth Officer versus or Chief Revenue Officer versus like head of Sales and you know, and head of marketing and things like that, cmo, cso. So the first thing would just be because these are trends that are kind of now funneling down to mid sized businesses that we tend to work with. And I wanted to see what you thought about that. Why are CEOs creating more of these direct reports? And you know, how can we, how can we take what we're hearing from these bigger, more advanced companies and apply it to our world? So that's my, that's my big spiel. And then I Have questions and thoughts, but what's your thinking on all of that?
- [05:37]
Ryan Dice
I'm always suspect of any time roles are created for, I guess, political and social reasons. And it seems like that happens a lot. And that could be external forces, but also internal. So we've seen a lot of roles created because it was just happening. And I think, and I'm not even saying that there's. Sorry, what was that?
- [05:58]
Roland Frazier
DEI sustainability and ESG people for sure. Yep.
- [06:02]
Ryan Dice
And I'm not saying that there's necessarily even anything wrong with, with having these roles, but I think a lot of these could very well be outside consultants and they don't necessarily need to be direct reports into the CEO. I mean, many of these should just be a function of hr, which is likely a function of maybe ops, you know, maybe a different C level position. And they're elevated to a C level, you know, role not because they actually need to be a direct report into the CEO, but more for, you know, status significance, more as a signal of, oh look, we're saying that this is really, really important. And anytime I see that, yeah, it just makes me nervous. And I guess if you're a big public company, maybe you feel like it's something that you have to do. But what you said is totally true. This trickles down. And we see it trickle down to first mid sized companies and then to even very, very small businesses. I mean, I know some companies that have under a hundred employees, but yeah, they had some of these roles within the company, six figure people that were occupying some of these roles.
- [07:12]
Roland Frazier
And so, and a tendency, I think, to, to put these names that they see in bigger companies on positions that really shouldn't have those names on them. Right? Yeah.
- [07:26]
Ryan Dice
And so I think it's the external things to appease external forces. But I think what can be in many cases almost more dangerous and you see it happen more often are when roles are created at the C level or at the executive level to appease internal team members. And I think that's what's happened with a lot of these combined roles. And so the Chief growth officer, very often I've seen at a lot of companies they have a chief growth officer or a head of growth as well as a head of marketing. And oftentimes the reason that they're doing that is because you kind of had two people that both wanted to get a promotion and the CEO didn't want to lose one of them, but they felt like, oh, you can, you, you can both be president kind of thing. And this gets really, really really dangerous. Same very often with the Chief Revenue officer. Now, I do think that there are times where it makes sense to have a unified sales and marketing direct report. I actually think, and I've gone back and forth on this, I now believe that this is not a good idea, having tried it in a lot of different ways. I do think having separate marketing, separate sales, both reporting into the general manager, CEO, whatever it is, is actually really, really important, as opposed to that singular, because one of them is always going to win. And you need that healthy conflict. So often, though, that's done to appease an individual, not because it's the right thing for the company. And so that's just what I see happening over and over and over again. These are not. These decisions aren't being made because they're the right thing for the company. They're being made to either appease outside political forces or. Or to appease internal political forces.
- [09:04]
Roland Frazier
Yeah, I couldn't agree more. I'm curious as to what your thoughts are, because I do believe the roles have gotten kind of muddled. Like the. The Chief Revenue Officer and chief Marketing officer and those kinds of positions. They seem to be the same thing. So. And I haven't seen any good, like, description. I believe revenue would be a broader role than marketing, but it doesn't seem like you would have both of those people on the executive board. And I almost. Excuse me. I mean, marketing is important, but does it really belong on the executive board? Like, is the executive board? Because the old school way, the way that I learned in business school a thousand years ago, was basically CEO and then CFO handles all financial stuff, CEO handles all operational stuff. Those are basically the main reports you might have. Those are the direct, what they call line reports. And then there might be staff reports that would be reporting to the CEO, like legal or, you know, HR or something like that. But that was kind of it. And it seems like the. That span of control has grown to include a lot more people that maybe shouldn't be sitting in those meetings. And I'm kind of curious, I think about, you know, different boards that we have and sit on and things like that. You know, executive boards, not boards of directors. And they seem like they're kind of crowded to me lately. And it seems like that they go on forever about issues that probably shouldn't be addressed in those kinds of meetings, that they. They could be addressed in interdepartmental meetings. Not necessarily. You need the whole team, because the whole team doesn't care about how the head of sales is Coordinating with the HR person, you know, to hire more people or the accounting person is trying to work out the budget with the, you know, the Chief Revenue officer. That's not stuff really to me that should go on there. But I'm kind of curious as to what your experience and opinion is on that.
- [11:15]
Ryan Dice
Yeah, I actually think that marketing and sales should be direct reports into the, into the CEO because they're such critical functions. I mean, if the cash register isn't ringing, then nothing is happening. And I used to believe that, okay, have a VP of marketing and a VP of sales both reporting into. And this is all at scale, right? So this is when you have many hundreds of employees. You really shouldn't have a C level position until you have hundreds of employees. Because the way this works, you have individual contributors reporting into managers, reporting into directors, reporting into VPs. And then that's where kind of the C level is going to show up at that level or above. And assuming that all these folks have seven folks reporting into them, do the math. It's hundreds of people before you really need a C level. So first rule is don't give people the C level title too soon in the, in the life cycle of a business. But so let's say when we're at this point where you, where it makes sense to have a chief revenue officer, when we've tried it, the problem is that one is always going to win. And if you, if you have a business that does have a significant sales function, there are times when sales is struggling and marketing is doing its job and sales needs to be called out on and there are times when the leads do in fact suck and sales is doing its job and it, but it's so nuanced. And if you don't have both of those people in the same room in a high trust type relationship where they can kind of call each other out, then I've just found that it doesn't work very well. So that's, I like that and I like that dynamic happening at that level. My feeling is think about the customer journey. I want, if somebody's touching those aspects of the customer journey, I want the people who own those pieces of the customer journey direct reporting into the CEO. So marketing, sales ops, if they're going to be owning the fulfillment piece and then yes, of course, certainly the head of finance, head of finance and accounting like that, that's it. But I don't think it should be more than about five people. Definitely no more than seven. I cannot come up with a scenario where it's where it should be more than seven.
- [13:27]
Roland Frazier
Yeah, it's just, it's hard to have a meeting, you know, and have productive discussion that doesn't go on forever. So one of the interesting things is that, you know, the question is, is the CFO becoming the new CEO? And this, this is kind of interesting because there's a growing trend of, of executives that take on both titles. So like C Chief Financial office Chief Financial and Operating Officer at Salesforce for example, which is interesting because I wonder if the study that said that it's grown from like six point something to eight point something people also contemplates that maybe some of those people are the same people in just two different roles. And I thought it was kind of interesting that the de facto number two right now in the executive structure is the CEO, excuse me, is the CFO. And you know, traditionally it's been the COO. And they're asking CFOs to take on more operational responsibility and in recruiting. Now the top recruiting firms for CFOs are saying that they're being asked to have one of the critical skills be strategy. And I've noticed that like with a couple CFOs that we've hired recently in different portfolio companies that, that, that that strategy is much, much more present than it's ever been. They're much less just a numbers person and they've got, they sit above typically an FPA Finance, what is it, Financial planning and analysis or something like that, forecasting plan analysis and, and a comptroller that is the more accountant person. So that makes sense to me. But, but I thought it was interesting for them to be kind of considered the number two because they need to know a lot about operations to be a good cfo, but operations needs to know a lot about finance to be a good coo. So I just thought that was kind of interesting. What are your thoughts on that?
- [15:21]
Ryan Dice
Yeah, I think the question is, is it easier to teach a finance person strategy or a strategy person finance? And I think the answer is it's probably easier to teach a finance person strategy. And that's why we're seeing this dynamic take place. And so as the COO role has become more about strategy and that, which, which what the COO role in a lot of companies was is it was more on the production side of the business. So when, when companies were more about manufacturing, like when we made stuff in America still and businesses were about manufacturing, the COO was going to be in charge of a lot of the manufacturing side. So they were going to be there in charge of procurement and all those pieces. So they were really in charge of the product. Well, now what we have are businesses where the product function has gotten to be a lot more specialized. So if it's a software company, then you're going to have probably a chief product officer who's over product. Which means the COO is in many cases not touching the product or the service or any aspect of the customer experience. So COOs have gotten more and more away from the product and fulfillment and delivery and they've kind of become more mini CEOs. But the CEOs don't want to completely give up their title. So I think the CEO has kind of got caught in the middle and that's why you're starting to see them sort of get consumed a little bit by the cfo. And I think that makes a lot of sense and we've seen it in entrepreneurial companies for a long time. I mean, if you go back to what, what was talked about in traction with Gino Wickman where he said, okay, you should have a visionary at the top and then an integrator and the visionary just has that one report that's the integrator. I mean that integrator was effectively the COO role. I, for what it's worth, kind of hate that structure. I think that's a stupid structure. We can talk about why, but that's what you have there is the COO role, essentially taking on the CEO role. That works at entrepreneurial companies where the founder entrepreneur is happy to kind of give up. They're happy to get back usually, right, you take it hot potato, you take it, it's yours. But at these larger companies, at mid sized companies and large companies where you have professionalized CEOs, they're not going to give up that seat. So that's where I think the Venn diagram is overlapping and I think the CEOs are getting pushed out. And I think it is easier to teach a. Certainly as strategy is becoming more frameworkized, it is becoming more systemized. I think it's easier to teach a finance versus strategy.
- [18:05]
Roland Frazier
I think especially if I was looking at anything, the roles that seem like they could be combined are that chief revenue officer that has has separate sales and marketing departments that they run, but unifies them because that person is basically mediating between the, you know, your leads suck and you know, your sales techniques suck. That, that always goes on with those people and can.
- [18:34]
Ryan Dice
As long as they're doing that, I'm sorry, as long as they're doing that. So as a CEO, I would want to make sure that I've got a chief revenue officer that is mediating and isn't showing favoritism. Very often. They come up through one of those channels and so they show favoritism to one of those channels.
- [18:49]
Roland Frazier
And would you. I would assume that that would also subsume the chief growth officer role as well.
- [18:57]
Ryan Dice
I don't think that's a thing.
- [18:59]
Roland Frazier
Okay, so the chief growth.
- [19:02]
Ryan Dice
Yeah, that, that came out of a. When. When growth hacking and digital marketing and all that. Yeah, when it was separate from marketing and you basically had marketing that was way more of the traditional brand PR strategy. And then, then there was this separation. Really. All marketing is now digital. They largely have come together again, I think in certain traditional companies that have more of a traditional brand or PR component, then maybe the CMO and marketing is just that they're the ones that make sure that everybody's got a pen with the company logo on it and that, by God, you're using the right corporate colors on all those posters and ads that you're running. But I wouldn't call that marketing. Right. So that's, I mean, you're just a chief design officer, I guess. But if we're, if you're, if we're talking real marketing, I don't think that you need a growth quote, unquote growth person.
- [19:57]
Roland Frazier
Well, your revenue, your chief revenue officer should be doing all of that. Right. They should be overseeing marketing, overseeing sales and growth opportunities, whatever they may be, whether it's hacked growth or strategic relationships or all those are people under them who should be reporting to them. So you have that unified, let's get more business mindset. And then I like that person. And then combining the, the finance and operational role, those chief roles is kind of cool because I think they naturally overlap and you really want somebody that knows the numbers helping with finance. Now we're going to do, in a different episode, a breakdown of Nike's $70 billion thing. And they brought in a tech executive to, to run Nike, and it didn't go so well. But, but the, the danger, I think, would be that if you've got operations and finance overlapped or unified under one, you've definitely saved some money. And you could probably buy a way nicer person. Like you could take 2,200,000 salaries and get the 400k person, and that would be most likely a way better investment, you know, and I think that's driving some of this. But, but then having that person in charge of operations, I think that you probably put more over like the, the brand integrity stuff needs to stay over with the chief revenue officer and they're in charge of that. And that way you're not getting, you know, bean counted out of. Well, we should do some brand stories that, that's going to cost too much to, you know, to do or, or, or loss of the focus on product because we're focused on the cost savings, which is a natural thing. I think that a, a finance based person would be looking at more than we need to invest in, you know, radical marketing strategies and more ways to get, you know, to capture more, more market share. So I think if you've got that, those three roles of growth revenue, sales, excuse me, growth revenue marketing under chief revenue officer and you've got chief financial officer and chief operating officer under one. But then you need a head of ops or somebody under the CFO that is going to be dealing with manufacturing because it's got its own stuff or all kinds of staff people. Now the other interesting thing is that head of HR reports in most of the companies I've seen recently to the CFO and the CFOs have no real training in HR, but they're overseeing the HR people. They've kind of moved from a staff function advising the CFO down under, I mean CEO down under to under the cfo, which is kind of interesting. And, but that basically leaves you kind of two main people reporting to the CEO, which is different than some of the other episodes we've done where we talk about 60 reports and you know, and everybody reports with. I forget what Elon Musk's, you know, show up and manage hit and run kind of thing is like those are crazy successful companies but they're run by very big individuals. So I guess that like if you're a super human, have no life going to put everything in, then maybe a giant flat organization with all these reports is good. And if not, and you're trying to be, get like high quality people that are working with you that are competent and not have too many people reporting, then you consolidate these and then how many reports do you have under this scenario to the CEO do you think? Besides these two kind of combined unified.
- [23:46]
Ryan Dice
Things, I, if it's me, I would want somebody who is uniquely charged with the getting of the customers, at least one. I would want somebody who is uniquely charged with the fulfilling and the making of the happiness of the customers. And I would want somebody who is uniquely charged with the keeping of the money. All CEO, all of those direct reporting into the CEO. Because that to me is the life cycle of the business. Right. If you think about it, what do we do? We make stuff, we sell stuff. Right. And we figure out a way to turn those two activities into profit. So if those are the core functions of business, I need to know that there's at least one person who owns those three core functions. So at a bare minimum, I want that. Now if it's me for a while, I really would want to have a marketing person and a salesperson if we have a big sales function at the business. Those two functions both direct reporting into me. Because marketing now has gotten to be so broad. Like you said it is brand and brand now I think matters more than ever. It's it actually I think brand matters more now than it did 10 years ago.
- [24:53]
Roland Frazier
Brand.
- [24:54]
Ryan Dice
Brand has, is coming back around again. But so does all the direct response stuff, like all the digital stuff matters. But so does PR and so does comms. So they still own all of that. So that whole big function is still all under marketing. That's a lot of stuff for somebody to own. And they got to make sure that they're generating the top of funnel activities to keep sales fed.
- [25:16]
Roland Frazier
Yeah. Who's the fulfillment person though? Who's that person that's reporting to the CEO?
- [25:22]
Ryan Dice
That's where it's going to depend on the business. So I mean it could be, if it's a technology company or software company, it might be a, you know, a chief product officer or a, you know, VP of engineering or something like that. So I mean I would definitely want somebody who owns the product owner, owns the customer experience, direct reporting and very often it's brand managers. And so that's when you see these companies that are really, really big. They've got the brand manager who kind of owns that customer experience. At like CPG companies, you've got basically.
- [25:50]
Roland Frazier
One to three or four brands that are somewhat related to each other. You probably don't have separate brand managers for all of those. You might have a head of product. Although that's not something that I see a lot in a lot of companies. I'm not saying it shouldn't be there, but it, it definitely like if I look at who's in charge with being sure that the stuff gets done and gets to the customer, that seems to be one of the weakest points in almost every company I come into contact with.
- [26:22]
Ryan Dice
Which is, which is exactly why I'm suggesting it should be there. I mean we're adding these made up roles very often that have no, they don't touch the customer experience at all. And we're forgetting about the customer experience. And it's because it used to be the COO and in many cases it still is the COO. But if you're talking about a software business SaaS company, it usually is a Chief Product officer, it could be a brand manager. For us it's going to be ahead of programs at many of our service based companies. So this is where I think it's important. And you do have, in a lot of cases the CEO says that they're uniquely responsible for that, but that's tough because they got a company to run. So I don't buy that. But it was a big trend for a while to say, oh, I'm a product centric CEO, that's. But, but you also have a company to run. So I think that's tough. So that is the one where I would absolutely. That is a C level role or a VP level role or a head of role that I think that every single CEO should have reporting to them who is somebody who's uniquely charged with making sure that our customers are happy and successful with our products and services.
- [27:31]
Roland Frazier
I love it. It also leads to the next topic I wanted to talk about which is the rise of the Chief Commercial Officer. So this is, this is that person that you're talking about. So you've got all of these Chief Commercial Officer or chief Distribution officer. One of the Fortune 500, Zoetis or Zodus, I don't know how to say it, appointed their first ever Chief Commercial Officer in November. And this is, this is basically blurring the lines between marketing, sales and finally customer experience. And that this is the person who is going to be the customer advocate that's gonna basically unify the product fulfillment and customer experience. So product in. What is it? How do we make it better? How do we improve it? What are the new ones we should have? How do we deliver it and get it into the hands of the customer and, or the service to, to make them have what they bought and then how do we ensure that the experience was positive? And I think that's a Chief Commercial Officer sounds kind of vague, but I. It's. Of all the things that I've heard, you know, from diversity and sustainability and ESG and everything else, it's the one that really makes the most sense to me as a new thing that probably ought to be there. Based on what we talked about. What are your thoughts?
- [28:56]
Ryan Dice
I completely agree. Out of all the made up ones that have arrived in the last decade or so that's the only new one that seems like it should exist. It's poorly branded though. It's a bad name. I had heard of CXO before, like Chief Experience Officer. That one sounds at least a little.
- [29:12]
Roland Frazier
Bit cooler, but it doesn't. It doesn't all three of those things.
- [29:17]
Ryan Dice
Yeah, I agree. Yeah, it's too limited.
- [29:21]
Roland Frazier
Chief Commercial Officer, you know, and Chief Product Officer I don't really like because it feels like it's only focused on R D and development and delivery of the product to the company, not the delivery of the, like the fulfillment of the product to the customer. Chief Fulfillment Officer would probably even be better than, than Chief Commercial because now we're focused on how do we fulfill what, what do we fulfill, how do we fulfill and how do we measure happiness and fulfillment. That, that seems, you know, but then you've got what is that? Then it's cfo, which is already taken, you know, so it's taken.
- [29:59]
Ryan Dice
Yeah, so probably Chief Commerce. That's probably why they settled on Chief Commercial Officer, because they went through the same thought process we did. I do like that that that show should, whatever you call it, that function should exist.
- [30:13]
Roland Frazier
Yeah, I actually think so too. And it's something I think we might want to talk to our portfolio companies about. How do you think the best way is to get that person integrated into the organizational structure with the other roles that we've talked about?
- [30:28]
Ryan Dice
I think they're likely on your team already. There's somebody who's already owning some aspect of the product or the customer experience. They're on the product team, they're on the services team. So they're probably somebody who is taking ownership of that. And I know for us, like our head of client, success is always talking to sales for better and typically for worse. Because usually it goes something like this, hey, you said to this person that we were going to do this and this and that. Well, we don't do that, so stop saying that. Right, but they're at least talking cross departmentally to them. Same with marketing. Hey, you're advertising that we do these things. That's not what we do. But also what they're saying is, hey, we just launched this, we're now able to do this. You should say that we can do that. And so this, this collaboration between the two, I've just found that there are some people who are excited to do that and they see it as a collaboration and they see it as a challenge. Anytime sales is like, boy, if you could do this and this and this, we could really sell a lot more of it. And they go, oh, love it, let me see if I can do it. I think that's the person that you want in the role, not the person who's constantly defensive and bristling and oh, how dare you, you know, make me do more work and have me go back to the drawing board on my precious product or service. I just want to sell what I've got. That's not who you want in that. In that role, right, Exactly.
- [31:55]
Roland Frazier
So then one more role that I think would be good for us to chat about would be this, this Chief Security Officer. Chief Information Security Officer. What are your thoughts on that? Is that. Does that rise to the level of importance that that's a CEO direct report or does that belong under the CEO or cfo?
- [32:16]
Ryan Dice
Yeah, I mean, I guess if you are a company that manages a lot of consumer data where you're, you know, if you're a credit card company or you're some type of security company and the liability is that high, then if it is a critical function of your value delivery, then probably. But in that case it's likely an aspect of your product. So it almost falls under the same banner as what, as the role we just talked about.
- [32:43]
Roland Frazier
Because just the customer data privacy, you know, the liability that you have for managing that, the ability to be. Have your entire company shut down, you know, employee security, back and forth, protection of employee. It seems like it's interesting the statistics are 82% of CI CISOs directly interact with the CEOs and 80% of CISOs participate in board meetings. That's. That's interesting to me and I guess because there used to be was it Chief Information Officer and that person was in charge of kind of like all things it. So there seems like they're basically saying, you know, what computer stuff and making them. That's so common. It doesn't really rise to the level anymore. But it used to be when it was how do we computerize our business? Right. How do we digitize, how do we have, you know that. But I think security and I'm arguing against kind of what I thought, I thought in saying this, but I get it that it's that important. I mean it's.
- [33:50]
Ryan Dice
I guess my feeling is as a CEO, depending on the company, do I add any value to their role and do they add any value to mine by that being a direct report or do I just need them to do their job? Like that's the thing I want people directly reporting to me where I need to go. To them on a regular basis. Cause I'm the CEO. I can talk to anybody I need to talk to. And I can invite those people into a board meeting. They can come and they can present at the board meeting, but I don't necessarily need them there for the full discussion. So participating in a board meeting, giving a presentation or giving information for the COO or the CFO to give, totally fine. I don't know. There is obviously a level if your visa, MasterCard. Heck yeah. That person's almost certainly Visa on the board.
- [34:33]
Roland Frazier
Indirect report, even at the, like, the entity, you know, Formation, Business prime. That. That.
- [34:38]
Ryan Dice
Heck, yeah. Yeah.
- [34:40]
Roland Frazier
It's, it's. It's actually, you know, a big deal and a constant pain in the butt to not have. But the reason I'd want them in the, the executive board meetings is that everything that we talk about is impacted by that. And so it's nice to have the marketing and salespeople there talking about, you know, how do we market and sales that? And the finance person, they're saying, you know, how do we pay for it and what's the return? And the security person saying, okay, great, you guys, you need to coordinate with me on this because we've got some, you know, some exposure here and we need to do, you know, pen testing on that. We need to, you know, we got a data security issue with that program you're thinking about running. So I think there's. They need to be so plugged in in the current world that we live in for now that it probably makes sense to have them in those meetings. I don't know about reporting directly to the CEO, other than it doesn't allow anybody to sweep security under the rug so that they can get their initiative through that. That would be the reason there. But I think in the board meetings, it does make sense. You know, in the executive board meetings, it does make sense. What do you think about that?
- [35:44]
Ryan Dice
Yeah. When you're setting strategy, I mean it, because I think I agree what you just said there makes a lot of sense to me. So I'll reframe what I said. In the same sense that you cannot set strategy absent finance, because strategy ultimately is going to be constrained by finance. So also strategy is going to be constrained by security and technology constraints. So I think you're going to want that person in the room when the strategy is set. Now, do they need to be a direct report to the CEO? I think the answer is it depends. I think that's the broader thing to all of these, these different roles and the exact structure of a C suite, it is going to vary wildly depending on the company. What makes sense to have the direct report is going to, you know, is going to change the ones that I think absolutely, positively should be there. Somebody who's uniquely accountable and responsible for making the cash register ring. Somebody who's uniquely responsible and accountable for making sure that the customers are getting what they paid for and they're happy that they did it. And somebody who's uniquely responsible and accountable for making sure that the business doesn't run out of money. At a bare minimum, I think you need those three people. And if you choose to break some of those functions up into multiple roles because it benefits your knowledge, then I think that's, that's great.
- [37:03]
Roland Frazier
So let's kind of re review. Who's out, I think is chief of Diversity, chief of dei, chief of esg, Chief Information Officer.
- [37:20]
Ryan Dice
In a lot of cases the CTO is out as well. Like Chief Technology Officer.
- [37:24]
Roland Frazier
Unless it's a. Unless it's a software company, right? Yeah.
- [37:26]
Ryan Dice
If it's software company, that's almost like the product.
- [37:29]
Roland Frazier
Product person. Exactly.
- [37:30]
Ryan Dice
But technology now is called. It's in every department. Like don't really want to centralize it.
- [37:36]
Roland Frazier
Who's in? Consider combining COO and CFO and get a higher quality person that you can double those salaries up and get somebody that's a rock star knowing you'll have to support them. But maybe you take two, 200,000 people and get a, you know, a three or 400,000 and then add to 100,000 supports under them and you've got a just a killer team.
- [38:00]
Ryan Dice
Yeah, I love that.
- [38:02]
Roland Frazier
Then the. What are we doing with the chief growth, Chief Revenue, Chief Sales, Chief Marketing. How are we thinking about that? For direct report to CEO Executive board.
- [38:14]
Ryan Dice
I'm going to have a VP of Sales and a VP of Marketing reporting into me for a long time, a very, very, very long time. And probably not have any C level roles at those two functions. And then maybe at some point either bring somebody in or send somebody in that role that I trust into a CRO function now.
- [38:34]
Roland Frazier
Now kind of adding new person Chief Commercial Officer to be that liaison that marries product development, product delivery, fulfillment and customer experience. We like that.
- [38:47]
Ryan Dice
Yeah, there's gotta be somebody who's responsible for that, in my opinion.
- [38:50]
Roland Frazier
So we got three people now plus two non C level people that are reporting. So that gives us five reports. Anybody else? Security person, chief Security officer, guy or gal.
- [39:04]
Ryan Dice
I would have them. I would either have them under if, if, if the Security is product related, then I would have them on the same team as the.
- [39:11]
Roland Frazier
It's not commercial.
- [39:12]
Ryan Dice
It's.
- [39:13]
Roland Frazier
It's got to be. And I'm not saying it to be argumented. I'm saying it doesn't. If it's product related, you got to have somebody doing that. But we are definitely talking here about security of the business and its ability to continue because that's where it is right now. I think it's that critical with the attacks and hostage holding and all that kind of stuff.
- [39:31]
Ryan Dice
Yeah.
- [39:32]
Roland Frazier
I don't know.
- [39:33]
Ryan Dice
Yeah. With a company like Prime. Yes. With a cup, like with Scalable, like we're not holding any. Somebody could. I don't know what somebody would hold hostage.
- [39:43]
Roland Frazier
Yeah. You know what I'm saying? I think that. A little bit bigger. Yes. You know, like, because as we like if. If Scalable evolves, as hopefully it will to. We are the repository of your precious information about your company. That's your plans and everything. Because we've software ties, all of our, you know, tools and things like that. It's going to be a big deal, right? It could be, yeah.
- [40:08]
Ryan Dice
That's a different business, though. I agree. Yeah.
- [40:11]
Roland Frazier
We're not big enough yet to do that. And you know, where is that level then? You know, that's the political answer, Right. It depends who else. Anybody else on that, on that board. In that board meeting we got five people and we're pretty. Feeling pretty good about that.
- [40:27]
Ryan Dice
Well, I think six if you're adding the. The security. Unless you drop down to five because you got the CRO. So, yeah, five or six.
- [40:35]
Roland Frazier
Legal was legal in there.
- [40:39]
Ryan Dice
I mean, I might. You might have an attorney hanging around here, but I don't know that I would necessarily have like a chief legal officer.
- [40:44]
Roland Frazier
I would.
- [40:44]
Ryan Dice
Yeah.
- [40:45]
Roland Frazier
Yeah.
- [40:45]
Ryan Dice
I wouldn't.
- [40:46]
Roland Frazier
I know that people do. I've been in those meetings and they just seem unnecessary. You know, it's like it's better for them to talk to whoever needs the legal stuff done and then, you know, get it.
- [40:56]
Ryan Dice
There's probably a time when it makes sense to have a general counsel, but yeah.
- [41:01]
Roland Frazier
Is HR important enough to have in the meeting in like your weekly or, you know, meeting of the executive team, do you think?
- [41:09]
Ryan Dice
I don't like send. I don't like it and I'll tell you why. So I like having an HR function for the purposes of facilitating recruiting and they're essentially running an internal recruiting process because at scale it is a lot. Recruiting is a lot of work on your managers. And so to ask them to manage the teams and to do that while also running a recruiting process is a lot. So I like HR to run the recruiting process, but I believe that managers should manage their people and not outsource that responsibility to hr. And we've, I've been some. There have been times where we've had that in our company where essentially we had a very strong, robust HR team. And because of that, the managers basically abdicated all management responsibilities, all, anything to hr. And so they didn't have any difficult conversations. It was just. Nobody managed anything. So, no, I don't like elevating HR that high. And we've seen a trend where HR is also getting kind of pushed down a little bit for that reason. I think great HR professionals are amazing and they're wonderful at what they do, but they should serve in an advisory role to managers so that managers can manage their fricking people and so they can help with recruiting.
- [42:28]
Roland Frazier
Yeah, I agree. Okay, well, I think that's a pretty cool team. I like the, I like the addition of the commercial. You can choose to separate or not, depending on, you know, how big you are. But I like the CEO, CFO combination. I like the sales and marketing people being there but, but ultimately having them under a roof in the company and, and the other support, I think it's a good, I think it's a good team. And if you get, if, like, if you're listening to this and you're thinking, yeah, I'd love to have that, but you know, we have 10 employees. Then, you know, several of our companies are smaller companies and we have, and I got this from Ryan. So I really like not, not calling them CEOs or CE anythings, calling or see any things, call them head of, head of sales, head of marketing, head of hr, head of, you know, whatever. I think that's a, at the, at the smaller company level. But it's still good to have those roles and it's still good to have those weekly meetings so that the departments are communicating. Because I think too many times in a smaller company, you've got five or 10 employees and you're not meeting regularly. You're just going on about your business. I know that that's how I ran things for a long time when I had smaller companies. And it was just I talked to whoever I needed when I did. Cause they were all there, but I never had them all there together. Cohesively talking about what are we doing in each of these things, which I think is important for all of the people in the company to Know, which is why people like Nvidia, you know, have everybody in the company hearing everything all the time. It probably makes for a better company. So if you. If you are listening to this and thinking, you know, that's not me, it doesn't apply to me. I think it does. You know, you might not have C people, but I definitely think that organized thing, which we have meetings in scalable set up for that, that we call Pulse meetings. Correct?
- [44:21]
Ryan Dice
Correct.
- [44:21]
Roland Frazier
Yeah.
- [44:22]
Ryan Dice
And people like to crap on meetings, but meetings done well can be and should be some of the most efficient, highest leverage time that your team spends together. And this idea that, oh, we don't need meetings, people can just kind of send emails and talk asynchronously. Now, when you get sharp people who are all moving in the same direction, when you get them together discussing ideas, magic can happen. And if you've ever been in a Mastermind before, you've experienced that with your peers, the same thing can happen in your company. So to not get them together once a week for 45 minutes, you're missing out. And so I would absolutely make sure that you're doing that.
- [45:05]
Roland Frazier
Love it. Awesome. Any resources for Pulse? Do we have any kind of thing that we do on how to do those or anything like that to hold those meetings?
- [45:14]
Ryan Dice
I did. I recorded a YouTube video on how we do meeting rhythms. So if somebody wants to check out my YouTube channel and we can maybe drop a link to that as well in the show notes or something like that. But yeah, I go through all the different meeting types, including, but not limited to Pulse meetings.
- [45:30]
Roland Frazier
Nice. Awesome.
- [45:31]
Ryan Dice
Well, hopefully this was helpful to you.
- [45:32]
Roland Frazier
Guys in thinking about your executive teams. The C suite, if you are a an executive, maybe getting some skills to be able to be in one of these new unified positions or to occupy that new Chief Commercial Officer position and kind of see how this can help shape your company and make it even better. If you enjoyed this, then we would love to hear from you. If you did not, then we would love not like to hear from you. And unless you've got good, constructive criticism, we do always appreciate that. We're on all the socials, and we'll see you next time on Business Lunch.
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