EP14: Scaling Your Business with a Fractional COO | Derek Fredrickson | The COO Solution

In this episode, I sit down with Derek Fredrickson, founder and CEO of The COO Solution, to dig into one of the most underutilized levers in business growth: fractional COO services. Derek brings deep experience helping entrepreneurs and small-to-mid-sized business owners build the operational infrastructure they need to scale — without the overhead of a full-time executive hire, and honestly, this conversation opened my eyes to just how much founders are leaving on the table.

Derek breaks down something I think a lot of us get wrong — the difference between the CEO and COO dynamic. The CEO is the visionary pulling the business forward, while the COO is the integrator making sure the engine doesn't fall apart at speed. He walks through the scaling challenges that trip up even the most experienced business owners, from communication breakdowns and accountability gaps to simply not having repeatable systems in place — and how a fractional COO can step in and change all of that.

We also spend a good chunk of time on AI and what it means for business operations right now. Derek's take is refreshingly direct — early adoption isn't just a competitive advantage anymore, it's becoming the baseline expectation. I loved his perspective on empowering your whole team with these tools, not just the folks at the top. We wrap things up with his framework for vetting business ideas before you go all in, plus some book recommendations I'm personally adding to my reading list.

TAKEAWAYS

• Fractional COO services give growing businesses access to senior operational leadership without the cost of a full-time executive hire — especially powerful for businesses in the $1M–$20M revenue range.
• The CEO is focused on vision and external relationships; the COO translates that vision into executable systems and manages internal operations.
• Delegation is a skill that must be developed — without it and clear accountability structures, growth stalls.
• Scaling requires repeatable systems and organizational structure, not just hustle. Build them before you need them.
• AI adoption is no longer optional — businesses that invest in AI literacy and implementation now will have a significant edge.
• The real operational gains from AI come from enabling entire teams to use these tools, not just leadership.
• Project management platforms are rapidly evolving with AI integration — reassess your tools and workflows regularly.
• Stress-test your business ideas before committing time and capital — fall in love with viability, not just the idea.

CONNECT WITH DEREK FREDRICKSON AT thecoosolution.com

Get Business Smart Coaching helps entrepreneurs and leaders build better businesses and better lives on purpose with purpose.

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Transcript

SPEAKER_01 0:01

Hey, welcome back to the Get Business Smart Podcast. And today on the show, we're going to be talking with Derek Frederickson. He is the founder and CEO of the COO solution. So that means he provides fractional COO services for companies. So if you don't understand what fractional COO is, there's this big thing that's kind of come up. What do you think, Derek, in the last maybe 10 years, 15 years?

SPEAKER_00 0:21

10, 15 years it started to scale and get more visibility, the fractional, the fractional route. Yeah.

SPEAKER_01 0:26

Yeah. So in the old days, guys, listen to the show, you know, a business owner had to wear a lot of hats and had to juggle a lot of different things. Really, a COO or CEO should really only be doing one, two, or three things, you know, the things that they're best at. But in reality, when you're a founder, you're a startup guy, you're juggling 10, 15 different hats trying to make the business work. But you want to get that stuff off your plate as fast as possible. And you really can't afford a COO. You have to afford like a fractional COO. And so, and that's where that comes in play. So, Derek, thanks for coming to the show. Now, if I understand right, you're working mainly with like low seven figure, up to double eight figure kind of clientele, you know, when we talk about revenues, right?

SPEAKER_00 1:06

Yeah, basically companies that have got to a point where, you know, they want to grow, they want to scale. So maybe they're doing one, two million, they want to get to five million, they're at 10 million, they want to get to 20 million. We work with the founder, and like you said, fractional, so part-time, but you know, COO, so chief operating officer, not just operations, but the COO is like your air traffic controller for your business. They are like that number two, that second in command. And we are the bridge between what I say is the vision and the strategy and the big idea of the founder down into the day-to-day execution in terms of the structure, the processes, and the system. So we're the glue between the ideation and the execution. That's where, that's where we sit.

SPEAKER_01 1:42

Now, one of the biggest examples I keep hearing when it comes to this concept of like, hey, CEO, creative, visionary versus uh COO, somebody who helps, you know, put clothes on your ideas, is uh Roy and Walt Disney, right? Because Walt Disney was the visionary, the dreamer, and his brother or brother or cousin or whatever it was, uh Roy was the one that came in and put it all together and made it into something. So Yeah.

SPEAKER_00 2:07

I mean, same with uh I think it was Microsoft as well. You had Bill Gates, and I think the guy that was really kind of the day-to-day operator of the business was Steve Ballmer at the time, I think it was his name. And that that is the dynamic because my belief that's the role of the CEO is they are the visionary. I have to say their job is to make it up, right? What's the big idea, what's the big vision? And then our role is we make it real, we make it happen, and then with the right people and the right process and the right structure, we make that recur, you know, on an ongoing basis. So oftentimes we work with companies where they know to an extent what they want, right? Maybe they want a 2X, maybe they want to exit, maybe they want to not work so damn hard in the business as they've been doing for 20, 30 years. So they know that they need to change. But how we do that is we focus more on how you're doing what you're doing, because how you're doing is the structure, the systems, the process, the things that business owners need, but they don't want to be the one to build it. They don't want to be the one to run it. They want to focus on the vision. They want to focus on the next big thing, but they need to have the trust and the faith and the confidence that someone's gonna land the plane and finish the things that have been started and actually move that into what I say traction, you know, momentum progress. Yeah.

SPEAKER_01 3:12

Now, when you're talking about Bill Gates, I had to smile or grimace a little bit because I really don't see Bill Gates as a visionary. I see Bill Gates as a guy who goes and takes other people's ideas and then figures out how to monetize them. So he like he didn't create DOS, somebody else did, but he bought it and then used it, and then he stole technology from uh Steve Jobs. Yeah. So he's more of a, he's not really a true visionary, he's more like an opportunist visionary. Yeah, yeah. But it still works. I mean, he did he did build one of the biggest companies out there uh through Microsoft, which is pretty interesting. So um, so let's talk a little bit with the guys just about what a COO does, like you know, the hats that they wear. Now, the visionary obviously, and I've run into a lot, like even Dave Ramsey when I worked for him, he was kind of like that. Like he was not an operationally minded guy. He was on the show doing the radio and he was creating new business ideas. He would say, Oh, we could go make money doing that. Yeah, and then we would go try it, and it may or may not make money, but it was it was definitely a visionary idea. And a lot of times what visionaries do is they'll go chase a new idea every three weeks and never get any traction, right? So then you wonder why 90% of businesses fail. It's because a lot of these founders or these visionaries are actually chasing too much, they're not really honing in on that one thing that they can put all their energy into uh to be successful. And that's what it takes. It takes energy, guys, yeah, focused on one thing for a while to actually make it profitable or make it work. And then once that one thing is going, then you can go maybe create something new, but you really have to stay pretty hyper-focused on that, you know, just a very few things if you want to be successful. So tell us uh kind of really do the job description for what a COO is, Derek.

SPEAKER_00 4:54

Yeah, I mean, I think so. First and foremost, we do we use a lot of assessment. So I think there's the wiring and the mindset of a CEO and a COO, and they're very different. They're but they're also complementary. So there's yin and yang, right? So the CEO mindset is they love to start things, they love to ideate, like I said, they like to vision, they like to create. They are focused more on where we're going, not so much of where we are right now, and even less so about how we're going to get there. The COO is wired to finish things. They love to land the plane. They are kind of like the string to the kite of the entrepreneur, not to hold the entrepreneur down, but to take some of these ideas and get them into real progress, real executable plans. So the role of the COO, I think, is wears two hats. Number one, they are your trusted strategic thought partner. I often say they're like your consigliere, right? They sit on the shoulder of the CEO and they are the person that they can confide in, they can share, they can throw spaghetti at the wall and see what sticks of those 10 ideas every day. The COO is then going to be able to take that and say, okay, I've got it. Now let me go make that happen. They're wired to execute. They love to implement. The zone of genius of a COO is they love running other people's companies. They don't like the front stage, they like the backstage. And so when the entrepreneur has the ability to rely on someone that they can trust to actually run the ship, it gives them tremendous confidence because then they can go and take bigger risks, they can see a bigger future, and they can have more clarity and say, okay, we're going to expand in this market. We're going to be able to take these initiatives that have been on the, you know, the idea block for quite some time because there's somebody that's in the organization that's going to make that happen. Some of the things that we do with our clients that I think exist in most companies that are looking to scale and grow, like I said, the founder, CEO wants the growth and scale, but sometimes they go like this. They put the good foot on the gas, they're like, I want the growth, I want the scale. And then subconsciously, without them maybe even not knowing, not knowing it, they're putting their own foot on the brake because their backstage can't sustain the growth. There's no structure, there's no foundation. So it's going to feel like it's more pressure, it's more stress on the founder. So they kind of stop themselves. But one of the things that we do, of course, is in the beginning, we build trust. We assess what's really going on in the business, a little bit of like opening up the hood of the business to see what's working, right? And no judgment, right? There might be some good things, there might be some bad things. And we look at the good things and say, great, why are these happening? How do we do more of them? And if there are things that are not working, how can we update, change, and improve them so that we can do things in a different way? And then lastly, the other thing that they bring in is what I call a culture of accountability. The idea is not having the COO be the savior of the company. They're not the jack of all trades that's going to do everything. They are there to kind of elevate up how we're doing what we're doing across the entire organization. So kind of getting team members aligned so that they're more responsible. They're more accountable for what their role is, what their responsibility is. Everybody's rowing in the same direction. And then as a result of that, they can do things more efficiently so they can get things done more quickly and more effectively. So they get it done at a higher level. So it's a little bit of, I'm sorry, you've heard the expression a rising tide lifts all boats. That's kind of the culture we're trying to create as we're moving towards that path to scale and path to grow. So it's a little bit of what the CEO does, but it's I think an important distinction between the mindset and the wiring and the zone of genius between a CEO and a CO. They're very different, but they're very, very important uh kind of dynamic when they're aligned.

SPEAKER_01 8:17

Yeah, and I I think you said it this way, but I'm gonna say it again to make it really clear. So usually CEOs are they like to start things. COOs like to finish things. Yeah. So that way they go hand in hand. So you have the starter and the finisher, that way you can see it too through to fruition. And I think that's why a lot of businesses fail, is because they have the starter, but they don't necessarily have the finisher and in place, and the and the business owners don't understand that. And so they either keep spinning things up, but they don't ever mature. The business never really matures. And uh that's one of the models that uh we had put together at Dave's is like a business maturity model. Like at what stage is your business in that it's actually maturing. You know, it's going from a startup to hey, we're getting a little bit more sophisticated. You don't want to put too many processes in place too early because that can actually cause as many problems as not having the processes. So yeah, so you want to kind of build over time and just get things more formalized as you add more people, you want to put more processes in place that actually ensure excellence. And that's really what you're trying to do as a COO is as the company grows, try to make sure at the different levels you're actually still maintaining excellence in the organization. So let's talk a little bit. If you let's say if you're a small business and you bring in a COO, what are some of the things that the business is going to see happening as they bring in this CO? What should they see the organization shifting into?

SPEAKER_00 9:39

Yeah, I mean, we focus on the founder first and foremost, because in most cases, with most companies most of the time, the founder is the bottleneck. Unknowingly, and and without without judgment, again, in that regard, you know, if you look at the evolution of somebody who's started the business, I'll use like a financial advisor as an example. We work with a lot of financial advisors, wealth management professionals. They started and and it was just them. And so they were able to do the marketing, the sales, the client work, uh the finance. But over time, as they started to grow, they brought in team. They maybe started to build a little bit of like the run book of how we do things around here, starting to get some of the operational workflows out of the head of the founder and start to create a playbook of how they do things. But after a while, when it starts to build in complexity, that's not the zone of genius of the CEO to be running the business. They needed to do that in the beginning because they were the jack of all trades. But at a certain point, that's not the model for them to get to where they want to go to grow and scale. And so what they need to do is first and foremost, trust that somebody who is more wired and more skilled at running the company is going to be that kind of strategic thought partner, as I said before. And oftentimes a lot of that is just kind of getting out of the founder's head, how do you run your business, right? And creating more of a structured way of doing it. So that might be, for example, creating SOPs, standard operating procedures, implementing a project management system, creating scorecards and dashboards to create to track metrics and KPIs and build that accountability so we can actually see how the business is doing. And then at the same time, really kind of developing a collaborative organizational rhythm of how the business works. So that might be, for example, like how you run team meetings and how you do project planning and how you do, you know, kind of vision exercises, that sort of a thing. A lot of the structure is the kind of stuff that business owners, in my experience, they don't jump out of bed and say, I want more structure, I want more process, because it feels like it's going to lock them into a box, right? And we want to create this really, really big container for them to ideate and create, but they need to have the foundation in place to support that. So these ideas just don't kind of die on the vine, if you will. So it starts with the founder because we need to remove them as the bottleneck, get some of their time back, and allow them to focus on the things that are really, really gonna move the needle, which perhaps they had more time to do in the beginning, but over time they kind of got absorbed of the running of the day-to-day, right? Business owners don't love to deal with operational challenges and team issues and, you know, minutiae problem solving. But that's the kind of stuff that needs to be addressed. And the operator has that mindset and that skill to be able to step in and do that.

SPEAKER_01 12:16

Okay. Now, when you see that happening, is that like all over the gamut of your clients, or does that mainly at the lower end when people are just kind of like starting to scale, you know, they get over the $1 million mark and they're into the five million dollar mark? Or do you see that that particular problem where you have to go assess the founder? Does that really result all the way up to like $20 million?

SPEAKER_00 12:36

Yeah, it's a great question. I think it varies. I think in in the lower end, you know, one to five, the founder is more of the bottleneck, right? And that just because they've been maybe resistant to change, you know, more of the same is more of the same. And so there's a lot that needs to get done in that regard. When you're working with a company that's doing five to ten million, like they're on the path to scale, but they may be scaling at a level that's providing more complexity. And there's a lot of things that the CEO may need to be involved with in terms of like, what's our marketing strategy? We need to bring out a whole new sales team and you know, our operational components in terms of onboarding and how we're leveraging AI. There's a lot of different complexity elements that get into the mix when you're at five, 10, 15 million. I always say you cannot scale complexity. You can scale simplicity. So when we bring in this kind of simplified way of streamlining things and kind of creating an organizational rhythm so it runs like a oiled machine, that supports the path to scale because you're hiring, you're going into different markets, you're maybe acquiring another company. There's a lot of new stuff that comes up at that level. But at one to five million, you're just trying to do more of the really good things that are already in place and get that founder out of the things that they've inevitably kind of fallen into, which is mostly the delivery, right? Mostly in some cases sales. They sometimes have a foot in marketing, and also they've got a big foot in finance, right? Because they're looking at the numbers and everything else. So we try to look at that and say, where can you be the best use of the COO in your own business as an asset? Meaning, if we were to bring on a team member, we're gonna say, what's the ROI of bringing in, say, a closer for the sales function or a CMO? What's the best ROI of a CEO in his own business? It's not in the day-to-day, it's not managing team, it's not creating structure and process. Again, you need that, but they don't want to be the one to do it. So it might be more focused on external relationships, culture, big delivery, big sales, right? Kind of having them be more, I know you've heard this, in the box of looking down onto the business as opposed to being the one that's always looking at the things that are happening in the business. So it's really kind of getting them out of that mindset, if you will. And also they have to be willing to change, right? And some business owners are very, very like, you know, holding on to the things in the business of how it's always been done. And they need to kind of, you know, relinquish control and have trust and see that there's a different path going forward that doesn't rely on them so much. One of the things that I say to clients in the beginning is listen, Tony, CEO, you need to do less better, more thinking, less doing, right? And their mindset is do, do, do, do, do. That's what got them to two and a half million, but do, do, do, do is not gonna get you from two and a half to five. That's just gonna be burnout. That's gonna be like pushing the heavy boulder up the hill. So this is a different way of thinking about that.

SPEAKER_01 15:16

Yeah, you had so many nuggets in there. Let me hit a couple of them real quick. So, one of them, when you're talking about the CEO, uh, it really should just be doing a few things so that you know you can get a micromanager type CEO, so they think they're the best at it, so they got to keep doing it. Yeah, which is, you know, you you can't do that. You gotta move on, you gotta delegate, you gotta learn what delegation is. Delegation is one of the most powerful things you guys can do to grow your business. Like, and I heard once before, it's like as soon as you can hire somebody to do something else that you're doing, do it. Like, make sure you write the check. You know, it could be 10 hours a week for a virtual virtual assistant. Whatever you need to do, do it. Like start getting stuff off your plate as fast as possible, as fast as you can afford it. I think the other one is uh there's a book out there. I never read this book, but uh, it's it's always come keep circling back around. It's what got you there or what got you here won't get you there, right? Have you read that one, Derek?

SPEAKER_00 16:05

Yeah, yeah, for sure. It's a great, yeah.

SPEAKER_01 16:06

Maybe you should give a book summary here, but the concept is, you know, wherever you are in your business, you if you keep doing the same things, you're not gonna get somewhere else. You're not gonna go to a higher level. So you have to constantly be reinventing yourself as the CEO as the business grows. Eventually you're gonna get there where you're really doing the one, two, or three things you were like God designed to do. But until you get to that place, you got to do all these different things and kind of reinvent yourself over and over again, yeah.

SPEAKER_00 16:34

I can give a quick framework that I think might help because you mentioned delegation. That's something that we do with our founders in the very, very beginning, right? Because we're not here to step into a business and like I say, shake the tree of the business and see what falls, right? We're here to assess and evaluate and and then come up with the strategies, the plans, the execution. So one of the things that we do, and if your audience is listening or watching, just pretend to take a piece of paper and break it up into four quadrants. And we do this with the CEO in the very beginning. Our CEO spends time with them to walk them through this because oftentimes they look at doing something like this on it on their own. They're not going to do it. Why? Because it's not exciting, it's not fun. They need somebody to kind of partner with them. So you have four boxes on this page. In the upper left is what we call unique brilliance. These are the things that the found only the founder can do. They are the things that move the needle the most in the business. They love doing it. It's the thing that they could jump up and do it again tomorrow 100% of the time, right? Those are the real key activities that are going to be the drivers of the business. Right next to that in the top right is what we call excellent. It's just like unique brilliance. The difference is if you had to go and do it again tomorrow, you'd feel a little bit drained. But the same type of activities. Then we get to the bottom two quadrants, and then there's competent. Competence, you can do it. You're okay at it. Maybe it's something that you've always done because it's just what you've always done, and you just keep doing it because you've always done it. And then there's incompetence. And this is the category where, frankly, you stink. And every time you do it, you're probably costing your business money because not only do you stink at it, but you don't like it and show you resent it or you drag your feet and you procrastinate. And if you do the work, you're probably doing it not so great. The idea is first focus on these bottom two quadrants because we need to delegate, outsource, systematize, get these activities off their plate so they have more time to focus on the unique brilliance and the excellent activities because those are the activities that drive 80% of the success of the business. But when we do this with the founder, there's a little bit, if I'm just being completely honest, no judgment, there's a little bit of shame. They're like, holy look at look at what I'm actually absolved in, you know, involved in. And it's like, okay, so you gotta stop doing your social media, you gotta stop managing your calendar, stop managing your email, right? People know this, but are they actually doing it? And how do we create the system or the person? So I often say we want to create a process-driven company, not a person-driven company. That doesn't mean we don't value people, but people love to follow a process and get those activities off their plate so they can focus more on relationships, culture, vision, ideation, creation. That's exciting for a founder. That's what's going to drive the business, not in the minutia of the stuff that's taking their time, energy, and effort every single day. So that's a very powerful exercise. And it's not nirvana. You don't do it once and then you're finished. You do it every three to six months, especially as you're going in scaling, because it's going to involve.

SPEAKER_01 19:20

Yeah, absolutely. Yeah. Things kind of creep back in, things you got rid of creep back in too. So you got to make sure they stay off your plate. Now, when you said email, I kind of cinched up a little bit because when I left Dave's as an executive, email was one of those things that kind of like was really under my skin. I just had a ton of email coming in. I was in a situation where the CEO's expecting like 15-minute responses to his email, you know, and it's just like unrealistic. So when I left that company, I just shut it all down. I'm just like, you know what? I don't care about my inbox anymore. Yeah. And I just started really kind of detethering from technology a little bit. I started, you know, leaving my phone in the car when I would go on date nights with my wife, so I wouldn't take my phone phone to the dinner table. Yeah. Even in the house now, like sometimes I don't even know where my phone's at. It's just like I have to go hunt for it, you know. But but I I am like literally is probably as detethered as you can get from it. You know, I think I found a really good balance. But I wanted to ask you this question, and it may put you on the spot here. But uh AI. So one of the big things I've seen recently is people using AI agents to kind of manage their inbox. And I think one of the tools out there that people are that's getting a lot of headway is this tool called Open Claw.

SPEAKER_00 20:35

Yeah.

SPEAKER_01 20:35

So are you familiar with that tool? Or are you seeing anybody as a COO kind of instituting AI to help manage uh email and some of these other things?

SPEAKER_00 20:44

Yeah, so a couple things. I'm not an AI agent. I'm sorry, AI agent. I'm not an AI expert, but I use it heavily. All of our COOs, I mean, there's a lot of our business on the back end in terms of how I run my company, is leveraging AI more and more, right? So I'm sure you've observed like everyone's kind of abandoning ChatGPT and they're using things like Claude and Manus and Gemini. So we've got a lot of automations that are in place and a lot of those tools, not just in the running of our business, but supporting our clients and how they're running their business. Because the founder might think about, again, this is their job to make it up. Like we should be using more of AI. Yeah, okay, great. Let's the COO define how do we make that real? What's the use case? What are the things that I think most people, not just business owners, but even personal, make a mistake on in terms of AI is that they say, let's use AI, but they haven't defined the use case. They haven't defined the problem that they're trying to solve that AI can solve. And so sometimes we go a little bit like bright, shiny object squirrel, like, oh, there's this other tool and this other tool, and we kind of go down a rabbit hole. And so I think it's really important to first say, like, what's the objective? What's the problem that we're going to solve? How is it going to benefit the organization? And then define what does it really look like. To answer a question on email, I've seen some of these tools, I've tried them. It doesn't work for me. I'm not saying it couldn't work for other people. And we have recommended it and implemented it with some founders that are drowning in email, right? And they just have always used email. That's their standard form of communication. But again, going back to the CEO mindset, I've never met a business owner that jumps out of bed and can't wait to get to their inbox and see 425 messages on Red. I have to think that's just like a sword to the gut, right? So leveraging AI, leveraging an assistant, leveraging the delegation of letting go and coming up with a system so that they can still be in communication, they can still be in the know, but it doesn't mean that they're living and breathing in their inbox all of the time. And some of the things that we've done in some organizations, similar to what you've said, we've like completely shifted the communication and collaboration off of email entirely. And in some cases, like for example, in my company, we don't use email internally as an organization. We use Slack and we use Asana as a project management tool. That's how we communicate, that's how we collaborate, that's how we get things done. And that's kind of the structure of how we build things in an organization because they're so dependent upon email, right? And they're like, Did you get Tony, did you get that email? I C C'd you last week? No, I thought it must have been my inbox. I missed it. Like for me, that makes my blood boil. So like you can't run a company with that type of complexity. And I know we're just talking about email, but it's the little things that get in the way of the big things. And I'll tell a quick story. When I was working as a COO with this one organization, uh, it was like a healthcare consulting company, about two and a half million, you know, sizable operation, quite a big team, et cetera. And we created this culture and the structure of using Asana. I know it's just a project management project management system, but it really revolutionized the company to create an environment where never would there be a team member that would show up and kind of check in online and say, So, Tony, um, what would you like me to do today? Like, again, for me, if I hear that from a team member, it's like my blood boils because using a structure like Asana, they know what to do, when to do it. The SOP is the living, breathing document on how to do it, and they bought into the vision of why we're doing it, right? So it gives them their run book of their day-to-day. And that's the machine. That's the that's the process-driven, not person-driven environment that allows team members to be more effective and be more kind of taking up more ownership in the business. So that was a long-winded answer to your question about AI, email, project management systems, et cetera. But yeah, I mean, AI is is huge in everything that we're doing now.

SPEAKER_01 24:27

Yeah, yeah, that's good. Yeah, I've I've started using it. I started using it about two years ago. I was actually doing some contract work with a guy. He was a little bit unbearable. Um, he was, you know, great guy, not a very good leader, but he wanted to build his entire company on AI as a platform. Yeah. And and I it was new. Like that was my first interaction with AI, but he was creating courses with AI. He was creating a little avatar that was him that was AI. It's like ask this guy, and he's got a little guy sitting on his desk talking to you and uh you know, and uh content like blog articles and stuff. So that was my first foray into it. Now I'm doing it, yeah, you know, and uh I've kind of like finally absorbed it all. And so it is it is very cool. Now, what you guys listening to the show, this is something I I think is uh very valuable to you guys listening to the show. So I think, Derek, when you talk about a COO trying to figure out what uh AI is an organization, how it should be implemented, I think that's the wrong approach, and here's why. So when you roll back the clock to like 1999 when the internet was starting to get a little bit big, a lot of companies were very late in adoption of the internet. And so what could they have done differently? And I think this is where a lot of companies make a mistake, is when innovation comes along, they soft pedal it and they try to figure it out. And and that's what happened with the internet. They they came in slow, they didn't invest heavily, and they were behind the curve instead of early. So what I think should be happening right now with AI, if a company can afford it or they can afford as much as they can put in place, is they should go, hey, this is an industry shifting thing, and we need to invest what we can afford to invest, not overinvest, but to go, hey, who is our AI expert who is going to carry us into the future? And that needs to be a person, whether inside the organization or outside the organization, that their whole job and focus is to go, how do we innovate with AI inside of our organization? You don't leave that up to the different departments to figure it out. You actually have a spearheaded person who is looking at your business, but also looking at AI and fully invested in what AI is doing, yeah, and then how it can be leveraged for your organization. I think that's the trick that's the difference. So, like when Dave hired us, he hired a guy in 2000 to start spearheading the internet. Yeah. And then that guy, he didn't invest, he invested what he could afford. I think it was like $50,000 a year. This guy was getting paid, which was way under market. Yeah. And then that guy hired four people, which was me and three others, and then we came in. So that was a pretty sizable investment in the business. The business at that time was about three, four million dollars. And so he hired four people. He didn't pay us much either. I was making 35, and my cohorts were making 23,000 a here. So we were bargained basement to get there. But what that did is it put four, four to five people in the organization who were trying to figure out how to leverage the internet for the business. And some of the early things we did was we put in an online lead management system. So we were taking real estate leads online through real estate agents and then having them log in to get these real estate leads. That was very groundbreaking back in 2001. We did early stage e-commerce, so we had our own online store back in 2001. December 2001 is when we launched that. So we were doing all these innovative things, but it was because Dave had invested into that space at a pretty early time. I mean, 2001, 2000, 2001, that's pretty early for the industry.

SPEAKER_00 28:02

Very early, yeah.

SPEAKER_01 28:03

Yeah. And so we did a lot of innovative things. We launched uh we did podcasting back in 2006. So that was very early to do podcasting. Took Dave's show, put it online, and then we also did online budgeting. We had online budgeting in 2005. Like I don't even think mint.com existed until several years after that. Wow, yeah. So yeah, so we were like one of the earliest ones doing that. Now, did we do exactly what we should have done? No, we should have invested more, we should have had a better vision, but that was the restrictions of the company. The CEO didn't have a digital vision. It was us trying to bring the ground up. So now you fast forward, you're doing AI. Companies should go, hey, what can we afford to invest in this space so we can bring innovation and leverage into our business? And a lot of companies aren't doing that, but that's what they should be doing. They should have a point person, somebody who carries that torch for them.

SPEAKER_00 28:52

Yeah. I agree. We have some I'm sorry, go ahead. No, no, you're fine. I was gonna say we have some kind of, I would say tech forward companies that we work with where they have that and it makes sense because otherwise it's it's a little bit of a hodgepodge. People are, you know, using different tools for different purposes, there's different skill sets, there's different awareness, and it can, again, can create some complexity. And then we have other companies that are just trying to step into it. And one of the things that one of the companies has done is that they've invited some of the key team leads to allow their team members to spend about five hours a week just getting familiar with the tool, right? Because some of these can be pretty complex. Like if you go into OpenClaw, you may have a left, you may need a little bit more of like a programming background. This is not something, it's not, it's not that easy. It's not like just click a button, you know, easy button and it's all done. And some of these other things like Claude and Manaus, like it involves things like APIs and webhooks and all the stuff. Business owners aren't going to really know that type of stuff. So you need the right person in place that can kind of create that environment. But then it's also, I think, really important for team members to get familiar with the tool and allow them to see how it could help and benefit what they're doing. Because what that forces them to do is it forces them to step out of the doing of what they're doing and look at how they're doing what they're doing. Ask the question themselves can I be doing this differently? Can I be doing this better, more efficiently, more effectively? Most team members don't think in that way because they're so focused on the day-to-day. I've got my list is full, my asana list is full. Well, how can we think about doing things differently? You need to give them the space to spend the time to focus more on the how than the what. And also, like you said, have somebody that's that in-house expert that can be that, you know, resource to lean on in terms of like, how do I use MANIS to connect it to, you know, my Slack account, to send it to the Calendly Invite, to automate that whole thing, right? You know, possibilities there.

SPEAKER_01 30:41

Yeah. So, guys, listen to the show. Uh here's what I think about that is if you can't afford somebody full time to go, hey, who is our in-house AI expert that's taking us into this new world that exists, then you need to find a contractor. You need to drop 30 grand a year to 60 grand a year to to afford somebody that can guide you, at least have conversations. And then I love what you were saying, Derek, where certain employees were given so much time a week to actually dabble with it. I think that's a really good investment because you can uh uncover some things, learn some new things inside the organization, which I think those are good. So be very intentional. I mean, I'm I'm behind the curve on AI, but uh I'm doing more with it. I'm using it for social media, I'm use I used a hybrid. Like I just started using Claude probably um a month or two, maybe a maybe I started dabbling with it maybe two months ago, got more serious with it this month. But I've been primarily a chat GPT user, but I find that I think Claude produces better content, so I like it more, but then I use Chat GPT to do my AI images for my social media. So I use Claude for the writing, a chat GPT for the for the uh artwork, and then uh other things I've played with, a little bit Claude coding. I've done a little bit with that, not much. But uh you've you've given me an idea because I've got an app I want to build, Derek. Okay, uh a money app, and I've dabbled with Claude, but now as I'm sitting there talking to you, I'm like, I got some friends, maybe they could help me with this now and put something together. So we'll see where it goes. Now uh you mentioned Asana. So uh guys listening to the show, just give you some background. We uh had a lot of projects at Dave Ramsey's Derek, but we did not formalize project management as a company until probably maybe it might have been oh six or oh seven, maybe. I think somewhere in that range, we started getting more serious, maybe maybe in 08, where the company itself started doing project management. Prior to that, you know, we're all using Excel spreadsheets and things like that to keep track of stuff. And then we put in uh Microsoft Projects because that was what I was familiar with, and you didn't have a lot of this cloud-based project management stuff back then. Uh there were a few things, but there weren't anything that was very good, like Asana. But you guys listen to the show, what we're talking about is clarity. So clarity of your tasks. And so that's a process. Um, if you are managing your business with Excel spreadsheets or email, which some people are going, hey, we manage all of our work through email. We just say, hey, do this. Yeah. And that's what the CEOs do, right? They fire off an email and go, hey, I need this done. And then they send this, they send this email with no real details in it. And then the staff, because it's so easy to initiate work as a CEO and a business owner, you can just have an idea and all of a sudden you can spin something into creation that may or may not be a really good idea. You didn't go through a vetting process, you didn't analyze it, you just send it off because it's easy, and that's really not what you should be doing. You should be vetting like everything, every task you create should be vetted through some kind of lens of value. Like, what business value is this task bringing to the organization? Not just because I got somebody that'll do it if I tell them to. Yeah. And I had a lot of that. Like I got a lot of that from all the senior leaders at the company. They were always firing something off they wanted done. Eventually I got bold enough to push back and so, no, we should not do that. That's a bad project. It's not gonna make money. They did not like that. It would get elevated to Dave Ramsey. Dave Ramsey would be the tiebreaker, and then sometimes he would say, Yeah, that's a that's a sucky idea. We're not doing that. And I'll be, thank you. That's great. So we just saved ourselves about a hundred thousand dollars of work by saying no to that one project. But Asana, like other projects like Monday.com would be one. Uh I think is it Basecamp? Is that a project management tool?

SPEAKER_00 34:25

It still exists. Yeah, it was one of the first in the market. Yeah, yeah.

SPEAKER_01 34:28

So, so really just going, hey, what are your tasks? And these tools are really good at letting you look at your team and what your team's working on, too, so you can assess it as a business owner to see it. Because you're not going to keep all those details in your head, you don't know what everybody's working on, but we can go to a dashboard and go, hey, what's the workload? Yeah. So as you get more disciplined, so how do you guys use an asana with that? Give the the listeners a little oversight.

SPEAKER_00 34:50

I'll I'll say a couple things. Um, I'm very interested in this because I'll put the caveat here that for most business owners, most founders, CEOs, disclaimer, you don't have to use it. Because I've experienced uh I've worked with my wife who's been an entrepreneur for for 25 years, and um I run when I was the day-to-day COO of her company, I built the structure of how do we use Asana. She doesn't use it. The rest of the team does. The reason why, and most entrepreneurs, I think, uh operate and think in this way, when they look at it, it doesn't compute. It looks like they want to just kind of like like, okay, that's not my lane. This is gonna, this is too complex. There's too much structure, there's too much information there. But for the rest of the team, it's amazing. It's actually the path for them to do really, really good work. And I'll say this as well, whether it's Asuna, Click Up, Monday, whatever, spreadsheet, doesn't matter. The form of what you use should follow the function of what you're trying to do. So I always say form follows function. The function is how do we execute on strategic projects to completion, right? Founder, new idea. We need to completely revamp our client onboarding because we have 50 new clients coming in the next six months and everything's archaic, it takes too long, there's complexity, the team members aren't aligned, et cetera. Great. So the function is we need a project on how to revamp our client onboarding experience. What's the end goal? What does it look like in the finished state? What are the key result criteria that are going to make it be a 10 out of 10? Then the COO, their zone of genius is to reverse engineer. That's where we're going. This is where we are now. What needs to happen in week one, week two, month one, month two, et cetera, for us to have really, really good momentum and progress and traction to get to a desired completed state or really, really good momentum. And then when you create that function of how we're going to execute on that project, Asana, click up, monday.com, it just feeds right into it and it provides the run book in real form. So you can see progress, you can collaborate on tasks, you can resolve issues or challenges and answer questions in a much more efficient and effective way. So you've got really, really great momentum. You don't need to have status meetings, you don't need to have a lot of discussions, like people, we know what to do. Let's just go and execute. And the tool, like Asana and the others, just kind of fit like a glob with that type of structure of what we're trying to accomplish in terms of delivering on new projects and new ideas. So I think it's it's it's a really revolutionary idea that we bring into pretty much every company that we work with.

SPEAKER_01 37:22

Yeah, I think it's necessary. I think as you get more a bigger, I don't know that you have to get too complicated up front, but with ours, when I left Dave's, we had started full-blown project or program management where we had, you know, gosh, 200 different people working on projects. And so we had to go through a whole analysis process of what our big rocks were, like you said, strategic initiatives were. And we would identify three of those a year that we would try to go, hey, these are strategic initiatives. Every if nothing else gets done, these three things get done. And then we had to prioritize that workload and go, hey, here's the hours we have available. Here's where those hours go per job, and this gives us our workload. And all these other projects below this line, we either got a staff for them or outsource for them if these projects below this line are gonna get done. And so it just gives you a better assessment tool. You can also judge the ROI on your projects. I think small business owners, a lot of times, they're just gonna throw a bunch of stuff up against the wall and see what sticks.

SPEAKER_00 38:16

Yeah, exactly.

SPEAKER_01 38:17

And and you know, unfortunately, 70% of the stuff doesn't stick, you know, and and if because you're not going through some vetting process on your projects to know if they're gonna deliver ROI. Yeah. And I think that's the biggest key is to, you know, do a real assessment on the the work that you're creating as a business owner. And uh, and I think if you do that, you're gonna get much better results as an organization. Yeah. You you guys that are trying to get business smart, you know?

SPEAKER_00 38:41

Yeah, and that's I think that's what a COO does. Uh, you know, they are, you know, I think in most cases with most most team members, when the business owner comes up with a new idea, the answer is yes, boss. I mean, and and then quietly they're like, well, what of the other 10 things are on my plate? Do you want me to pause and put it on the shelf while this other new idea came in? But the role of the COO, they're gonna have some healthy conflict. There's gonna be some pushback. We're not the no machine. We are the yes and. Yes and, and sometimes what we'll do after there's a really good element of trust between the CEO and the COO is we'll say to the COO, that's a great idea, and I want you to sell it to me. What does it look like in the finished state? They get excited just about the idea. They don't get excited about the path of how it's going to get there. They can see what it looks like in the end state, but we need the CEO to sell themselves on the idea before they try to sell it to the organization. And like you said, 10 ideas a day, maybe only one sticks. The other nine just get vetted, be like, oh, it's a really good idea, but now that I think about it, it's probably not gonna work, right? And we don't want to kill the enthusiasm of the idea creation, but we want to support the vetting of the idea so that it can actually get executed to completion. So that's what that COO does is that kind of healthy conflict partner, if you will.

SPEAKER_01 39:53

Yeah, I love it. And I think a better way to say it maybe, or a simpler way to say we want to make sure that the best ideas rise to the top so that our focus goes into our best opportunities to create revenue, to create growth. And I think that's something that we a lot of us as business owners miss is that we just we treat everything kind of the same instead of going, no, no, what is the really the absolute best thing we can do right now or over the next year or over the next three years or over the next five years? And I think when you start, guys, when you start looking at your business that way and treating your business like you have a scarcity of resources that you need to, you know, not spend everything very loosely, but also kind of like go, okay, what's the best thing, the absolute best thing we can put our time into? And then not just you making that decision, but having good people around you think through that, make that decision too. So, Derek, here's your last question for the day, and then we need to make sure everybody knows how to find you as a fractional COO. But what are the two best business books that you've read that you'd like to recommend to the group?

SPEAKER_00 40:53

Okay, so I've been thinking about this in the back of my mind, and the first one is not a business book, but it impacted my progression and how I've evolved in the business and kind of the professional path. Uh, and I read the book, I think, back in 2009, 2010, and it was called One Year Abroad. And the reason why I share that is because, as you know, Tony, we live, I live here in France and Paris. I'm originally from the States and Connecticut. We've been living here for 10 years. And I read that book because I was in a mastermind and I met somebody who just did a one-year around experience with his two children. And to me, that sounded extraordinarily cool. I said, that's on my bucket list. I would love to do that. And he gave me a resource of this book called One Year Abroad. And it really started to plant the seed of this idea that my wife and I had to spend one year in France. Now it's been 10 years, we never came back to the US, and we're very happy here. We do miss the US in some cases. But that was a real kind of pivotal moment of then shifting. So if we are going to move to France, what do we have to do with our business? What's that going to look like? So it really impacted the kind of business evolution of what we were building. The other book that I read shortly thereafter, I think this was maybe in 2013, 14, uh, is a book called Remote. Uh, you mentioned Basecamp, and it was written by the founder of Basecamp, which is a project management system. What I loved about Remote is that it was the first book talking about virtual before everybody was talking about virtual, before Zoom, before remote teams, before all of this stuff existed, which really obviously took off, you know, around the COVID period. But because we were moving to France, we needed to pivot our business online a few years before we moved to France. So we consumed that business book and like really understood about project management systems, uh, what they call asynchronous communication, using tools that obviously things like Loom and Slack didn't exist, but just more online systems that could be implemented that allow an organization to run better in some cases in a virtual environment. And one of the things that we did sounds crazy, but we were a year out of moving to France. And we had an office, we had about 25 team members and a video studio and everything else. We lived about a mile down the road and we would go to the office every day. But we knew we were moving to France, and because of the things I was learning in that book remote, we basically pivoted the business online. Everybody was in the office, but we ended up working from home. So we would do meetings online through Skype and doing other things remotely to position the business to be successful. So when we did move, it allowed us to still do things in a very efficient and effective way. So those are the two books that really kind of shaped me in my journey.

SPEAKER_01 43:28

Awesome, Derek. Yeah, I appreciate it. I never heard of those two, so that's pretty fascinating to see that. EMyth Revisited was one of those that kind of shook things up for me a little bit.

SPEAKER_00 43:36

That was in the list, yeah.

SPEAKER_01 43:37

Yeah, similar to uh remote in some ways because it talked about global, global influence of the economy. But all right, Derek, how do people find you, get in touch with you as a fractional COO guy?

SPEAKER_00 43:47

Yeah, so Best Way is just on the website. So the website is theCOOSolution.com. Um you can find out a bit more about you know, kind of who we are, what we do. There's also a quiz there if somebody, you know, oftentimes people might be listening. To themselves. I wonder if now is the right time to think about bringing on a fractional COO. There's a quiz there that might help kind of you know see their readiness about where they are, where they want to go, and how a COO could perhaps be a solution to help them. So that's at the COOSolution.com.

SPEAKER_01 44:14

Awesome, Derek. Thanks so much for being on the show. Really appreciate it. A lot of energy. I like it when the guests have a lot of energy.

SPEAKER_00 44:19

I appreciate that. It was really great. Thanks for having me.