Building Trust With Your Number Two as You Scale

Clare coaches the role nobody talks about: the COO or CFO sat next to a founder CEO, expected to challenge the person who built the company and signs their pay cheque. Most coaches work with the founder. Clare works almost exclusively with the number two, which gives her a different read on why these relationships succeed or quietly fail.

In this episode she breaks down what "permission to challenge" actually requires beyond the sentence itself, why founders should look at their own behaviour before blaming a number two's performance, and the question every founder should ask if they're not sure they've got the right person in that seat. If you've got a strong number two who's still holding back, this is the conversation that explains why.

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Transcript

SPEAKER_00 0:05

Hi, I'm James Johnson, founder and CEO coach. Welcome to the Peer Effect, the podcast where your peers will tell you what's unlocking their 10 million plus business. In today's episode, Claire and I explore how to have the most effective relationship with your number two. Remember to hit the subscribe button before we get started. And now on with the show. So Claire, welcome to the show.

SPEAKER_01 0:30

Good morning, James. Um, lovely to be here.

SPEAKER_00 0:34

So today we're going to talk about sort of the importance of the number two and how founders can really magnify that relationship. I was like, before we start there, what's what's your origin story? What what's what's got you to this point?

SPEAKER_01 0:49

Oh goodness me. Well, my background in a very cotted version is um I've now been coaching for 10 years, having um run a marketing consultancy before. So my whole time there was working with scaling businesses, SMEs, family businesses, and getting very involved way beyond the marketing. And so that's what led me into exploring coaching and where I am today working in those sort of businesses in a different way. And I come from a family business. My parents are farmers and cheesemakers, and my husband runs um a family business as well, a farm. I mean, we run a conference centre. So very much from an entrepreneurial, hardworking um background. Um so hopefully that means that I'm well placed to coach in this space. That's sort of my very potted journey to get here.

SPEAKER_00 1:44

I mean, your journey normally is quite fast, I mean, just you just your first marathon? It was certainly like your certainly a first one.

SPEAKER_01 1:52

Yeah, absolutely. Um, probably too old to be starting marathons, but yes, I did my first one and went straight in with the London marathon and yes, very proudly came in just under four hours and raised about £7,000 for scoliosis research and support as our daughter has scoliosis. But I run all my life, but the first time I've tackled a marathon, so pretty proud of that accomplishment this year. One of the bucket list tick stand.

SPEAKER_00 2:21

And what and what we talked about history about bringing from marketing into coaching. What is it about this, that sort of number two role that makes has attracted you and made made one of your specialisms?

SPEAKER_01 2:34

Um to be totally honest, an inadvertent specialism, in that um often I found I started over the last few years getting referred by other coaches that were perhaps in a business coaching the founder, stroke CEO, and they then realised this is working. Actually, my number two could deal with coaching, and through a sort of coaching network, I've been reached out to um as that person to come in to provide that support because often it's not appropriate, or rarely is it appropriate that the number two is coached by the same coach as the CEO founder. So I found myself um creating a bit of um an unplanned specialism in this area on that relationship with the number two, and in some ways, I suppose just to expand, because I'm from a marketing business development background, often the number two is COO, CFO, although not always, but that's a common um role, and I find that because that isn't my background, almost conversely, that works well because I'm challenging in a different way because I haven't been the CFO or COO, and although obviously I've got a commercial background, um, I'm not having a strongly financial or operational background. So I think I look at things differently for them. Um so where people, I need some people coach in areas that is their background, for me, I found it's worked not being my background, if that made sense.

SPEAKER_00 4:17

And I suppose because if you've got a CEO background, so I suppose you can you can give an insight as to what's what what they're thinking.

SPEAKER_01 4:24

Absolutely, I think understanding how to run businesses, having run my own consultancy, the farming business, and we run a conference centre as well. So having that entrepreneurial background and insight into the minds of founders. I think I have a deep understanding of what's required from a number two and also what the difficulties can be for the number one CEO founder in that relationship. Um so, yes, James, very insightful in your observation there.

SPEAKER_00 5:01

And what what are you saying then? So if you're working across sort of many companies with lots of different numbers, like what's some like common trends that you're saying of like what's working, what's what's not?

SPEAKER_01 5:13

I think it's the CEO founder recognising the importance and value in that relationship. Um, because sometimes they don't have somebody in that position, and there is a willing candidate in the business who hasn't put their hand up and they're probably doing the job at the moment, um, but haven't got the title, and um haven't said, please can I have that, um, but are happily doing it. And I think it's recognising that it's needed, recognising that you might have that person right there next to you, but they need some elevation and um more autonomy in the role and more permission to challenge. I think having that permission to challenge the CEO fan is vital, and often that's lacking in that they may quite happily accept it, but they haven't given that permission. And I think that sort of counteraction and balance of those two at the top can be so powerful, and sometimes it's there and it's not really the fire hasn't quite been lit under that relationship.

SPEAKER_00 6:30

So, what what does it lovely phrase that permission challenge? What does that what does that practice look like in terms of giving someone permission to challenge?

SPEAKER_01 6:39

I I think that sometimes the number two can be slightly in awe, particularly when the CEO is a founder, because um, as I know many founders are listening to this podcast, hopefully, or have listened to many previous ones of yours, you know, founders are invariably full of ideas, full of energy, um, and want to make things happen now. And that number two, particularly because of the CEO C O CFO role, can put the um the calm, the breaks, the questioning, um, the evaluation of a situation into the relationship mix. And if they're allowed to do that, that dynamic is phenomenal. Sometimes they can be frustrated and not feel they're allowed. So when I say commission, it's as simple as um the number one saying, I want to be challenged, you know, in the room, you push back and do that. And I know that sounds really easy and really simple, but sometimes that just doesn't happen. And my role as a coach is finding ways to enable that challenge so that that relationship buyers better when perhaps it's not, or it's there, but it's not quite doing all it can.

SPEAKER_00 8:10

Could when you say that I'm here is that you there's a degree of self-permission, but even if the founder's explicit, let's say the COO needs to give them self-permission at the same time. But also I wonder whether there are things the CEO can do that sort of unsubsequently undercut that permission. That's kind of like, I give you permission, but then with my words, I give you permission, but with my behaviour, I'm kind of removing it.

SPEAKER_01 8:33

Yeah, absolutely. I think like you said, you can verbally say, please challenge me, and then when you're challenged, um be defensive, not listen, plow on anyway. And it's really um again by that relationship. I mean, it's great if both have a coach, a different coach, and um not to advertise coaching, but obviously works if you've got two good coaches, seeing the benefit of that relationship. And yes, saying things verbally is one thing, but stopping, listening, responding, and allowing that relationship to flourish is really important, and there is a responsibility on both sides to enable the development of the relationship.

SPEAKER_00 9:24

And so when you're working, given that you're let's say you're just working with the COO and someone else is working with the founder, what would what sort of things would you be saying to the COO to help them sort of give themselves this permission?

SPEAKER_01 9:39

Um, I think a lot is around confidence. I think we all think you've got to that position in a business, so obviously you must be a confident individual, but that's not always the case. You know, people get to their or achieve their um roles through hard work, through doing well, and working up through the SLT into that C-suite. And sometimes in smaller scaling businesses, maybe even haven't had that much experience of SLT C-suite and have been elevated at pace. And so when that's happen when you have that speed of coming into that role, I think um testing things out. So as a coach, we might talk through scenarios, um, talk through what the reaction might be, what can be said to elicit um a different reaction, and to um be bold enough to do that and to react in the moment. And I think sometimes not feeling confident because of that great respect for the person that's developed the business. Um I think something else that is really important in this relationship. Sorry, Jones, I go off at tangents because I I'm very passionate about this. But it's really important that the number one understands that often the number two is treating the business as their own. But it isn't their own. You know, there may be equity, there may be a part in it, but it isn't their own. I think that the the number one has to value what's being put in in a very similar way to what they're putting in and respecting that relationship both ways, again, to get the best value from it.

SPEAKER_00 11:34

Create also quite a delicate dance there, because I mean a lot of founders have a co-founder, and so by by nature, you've got two different roles which are in a very similar power position. And I think what you're exploring there is just that it can feel like a symbiotic relationship, but that is there's a certain fundamental power imbalance.

SPEAKER_01 11:55

Yes, and I um I think particularly when you're not co-founders, you are actually in the job and um the founder, or whether even if it's not a founder, if it's just a CEO, but I think my experience is quite often with founder CEOs or CEO founders that have become the CEO, um, and that's where that relationship can perhaps be more delicate because the founder themselves may not be fully equipped to be a CEO. So they're feeling their way being a CEO and they're learning, hopefully with a very good coach, um, but they're learning as well. So everyone's learning on the job. Um, you know, my reference point here, what I'm talking about, is scaling businesses, not so much corporate established businesses. Um, so there's a lot of learning and that openness to learning and recognizing that both parties are learning together, like any good relationship. I think the number two recognising that the founder isn't perfect in their role, they are learning as well, and if they can be open with each other and um almost call that out, then they can learn together in different ways.

SPEAKER_00 13:15

Because that's a quite interesting point to say the idea that the CEO might not be perfect, might be learning as well. Because I suppose that also might make them a potentially a bit more defensive when challenged as well. If they're feeling insecure, potentially out of their depth, or like they're not experts. That could lead to quite an interesting dynamic.

SPEAKER_01 13:35

Yeah, totally. I think we're all learning, aren't we? That's what makes life so interesting. I mean, what we do as coaches, we're learning all the time with every new person we meet, every business we go into. Um, and there's never a complete finished package. But I think in skating businesses, not only are you learning your role, your role changes as the business changes, as the business grows, the pace it grows at, the current world environment, politics, economics, wars, um, everything that's affecting us at the moment, um, investors, those relationships, you know, there is constant learning. And um, yeah, and I just think that's where any good marriage or personal relationship, a level of vulnerability and openness that people are comfortable with. I feel that coaching plays a part in enabling people to see that's okay, um, it's it's not dangerous to let people in. Your number two should be someone you implicitly trust and you want to drive your business forward with. And if you don't have that level of trust, then perhaps there's a question mark whether you're the best duo to be taking the business forward. And you perhaps have to ask yourself that question as well.

SPEAKER_00 14:55

Interesting. So what what might if you're a founder listening, think, oh maybe I don't trust this person enough, how does that play out? What signals are you seeing?

SPEAKER_01 15:08

I I yes, but I hope some of those questions aren't asked after this podcast, but if they are, that's good. Um I think if you're listening to this and anything resonates, um, you know, my my thoughts if you don't have the relationship, you should be asking them into the room and and developing a relationship like this. And if you're not doing that and you're not feeling that you can develop in an open yeah, absolutely. Ask yourself questions. Why is that on your part? Um, are you holding something back? And do you need to work on yourself to enable that? Is it something about the person that you've got in the number two position? Are they right? Are they ready? And I think an interesting question there, um, or thought is some people in that number two position, that's where they want to stay, and that's what they're really good at, and they are brilliant number twos. And some of there, they're they're sort of number ones in waiting, whether it's in that business or whether it's in another business in the future, and the CEO founder recognises that they may go somewhere else. So that's a slightly different sort of person as well. Someone that's got that ambition to be a CEO versus someone that is a really, really good number two, either equally fine. Um if you've got someone that's a CEO in waiting, um, you know, make sure that you're you're comfortable. That are they CEO waiting for you your business, or are you equipping them to move somewhere else and make sure you're not holding them back because the right decision might be at some point they do go somewhere else if you're not stepping away, and you'll get the best out of your number two if you support them in their career development rather than much as any role in career development.

SPEAKER_00 17:08

Do you think whether you've got a number like a number one awaiting or someone who's happy to, do you think it makes difference to trust lovers or is it just purely a developmental sort of type of conversation that you're having with them?

SPEAKER_01 17:23

I don't think it makes I think as with anything, it's about the two people in their relationship. I think some people openly take someone on as a successor. Um don't. They they're it's a CFO perhaps that's then accelerating and developing. Um and yeah, I don't think it should make any dis difference in the relationship, but you have to be open with yourself and with each other about and it may evolve and develop. You know, you have a high-flying number two that comes in at a certain age, and then they grow and they've got potential to develop into the next role as well.

SPEAKER_00 18:05

And when when it comes to building that trust, I mean, do you seem kind of like part of it's a performance thing, but something's partly a relationship thing. Which do you feel comes first? Like are you as a founder, are you focusing on building a relationship first over performance, or are you focusing on performance and then so the relationship comes?

SPEAKER_01 18:26

That's a tricky question, James, isn't it? Um I feel like I'm definitely being coached here as well. Um I I don't think I can say that there's a blueprint for that. I think it depends on the person. For some people, they just cannot develop a deep relationship or a sort of functional skills-based delivery relationship without that personal element first. Some people it's all about delivery and they can tolerate somebody if they deliver in the right way. I do feel from my experience, and obviously I can only use my experience, that in um scaling businesses, I think relationship, personal relationship does play a very big part because it it's sort of their baby, their business. And I think if you can have that personal relationship where the number two feels really invested in the business, um I if I had to choose, I'd put that first. I think there's almost you can teach skills, you can develop skills over time and delivery, but if you've got a good personal relationship, but that doesn't mean you have to be best friends. I think they're different things. I think there's a recognition that you've got different skills. Someone who's number two often isn't well not a founder by definition, they may become a CEO, um, but they some leave and found the things, but um, you know, you're different personalities. So it's recognising the strengths in your differences. You don't have to be best friends, but I do think respect and trust are foundations to having a good relationship and having openness and transparency as far as you possibly can.

SPEAKER_00 20:21

Would you go so far as say like you should enjoy the relationship?

SPEAKER_01 20:27

I think it makes work is always better if you can enjoy the relationship. Um, you know, I know from a coaching perspective, I don't have to be best friends with the people I coach, and I coach all sorts of different people, different personalities, different genders, different ages. Um, but I respect the people I coach and I enjoy working with them and I enjoy seeing their development. Um, I think that's the same in any good functioning ship, and I feel it depends on your definition of enjoyment as well. But that we could go down a whole different rabbit hole there.

SPEAKER_00 21:03

Well, if we if we let's say again, founders are saying you're thinking, oh, my number two isn't performing. It's somebody's tempting to think, oh well, there's something they're not doing right. Maybe there is. But what what do you see like founders do that they could do what what could they change about what they're doing before they they sort of point the finger too much at their number two?

SPEAKER_01 21:27

I think you always have to look at yourself first, don't you? I think it's very easy at any level in a business with any team to jump to lack of performance. So my question is always are you equipping them to perform? Are you setting them up to be their best? And I know it sounds cliche, but are you setting them up for success? Um, and maybe you're not. Maybe you're just assuming they're getting on with things, and you're not opening the door in these conversations, you're not letting them back to our Said you know you have permission to challenge, maybe you're not challenging them, um, and you're not developing them. And I think you have to really look at the conditions that you're setting up for them before you start pointing the finger, and look at all of that first and give them every opportunity. If then there's still question marks, that's when you have to look. Is it outside of yourself? But it you know, usually when something's not functioning, there's something on both sides. Now it might be as number one founder, CEO, you're like, well, this is the way I am, and I have to find someone to work with that. That's a decision you have the prerogative to make. But usually in a relationship, those people have to work at it.

SPEAKER_00 22:50

So it's as we've got we've got permission to challenge, we've got sort of almost caring about their development and understanding where they are. Like, are they sort of a number one in waiting or are they a sort of fundment number two? Sort of it so that it there is a still this kind of slight there is an employee dynamic, there's an employer-employee dynamic in this. As w as well as this also trying to get almost a peer-to-peer relationship at the same time. So it feels feels quite complex as a as a as a relationship.

SPEAKER_01 23:27

I think it is complex, and I think a number two also has the added um element that they're sort of conduit between the founder CEO and the broader SLT. Um, so they are, you know, they've got a lot of things to do because they are perhaps the operational head to a certain degree of the business. Um, they are sat at the table with the investors, they may be privy to information that the rest of the SLT isn't, privy to that they have to carry. Um, there's a lot at play for them, and I think it's a really fascinating role. Um, they may, you know, CFO, COO, or joint role, they're they're in charge of the numbers. You know, that that's a tough, tough gig, and it's tough right there at the moment as well. And um, yeah, I think they have an awful lot on their plate, and I think there has to be a respect from the number one for what they are behind the scenes as well. You know, something I do encourage with clients that I work with in this um in this role is to go out and build your own profile as well, to build your own networks, your own relationships. That's good for the business. Um, because it's not all just about the number one, but it's also good for your own career, your own development, and you can get very sucked in to being there in the business, and you need to make sure you're out learning from other peers, listening, seeing what's going on out there, and don't get isolated. Because everyone always says about the lonely number one. I think it can be lonely with a great deal of complexity at the number two um level as well.

SPEAKER_00 25:15

Yeah, I can see that. You're sort of you're you're not quite a peer to either level, like you're you're not quite a peer to the CEO and you're not quite a peer to the SLT. You're kind of stuck a bit in no man's land.

SPEAKER_01 25:26

Yeah, yeah, it can be difficult, definitely. And that's obviously where a good coach comes in because you've got someone to talk to and work through those. It also gives you a lot of strength because of your position of really understanding um what's going on at the top table and then what's going on in the business, and you have perhaps can have eyes down through the business in a way that a number one can't always have, and I think that's really important as well.

SPEAKER_00 25:58

That leads on to realistic. So we've talked about like where it's not working, but like when when it's really working in this relationship, what sort of how do you feel that and what's the benefit to the to the business?

SPEAKER_01 26:12

I mean, it's just if that's working, it really just helps. You know, that's it's great to see. I think both people um enjoy it. Um obviously, from my point of view, I usually just see one side because I think you're from that said have two coaches for confidentiality and um just makes it cleaner in those two roles. But that dynamic, that balance, I think it's like if there is such a thing, perfect marriage, but those you can have good arguments, stroke debates, discussions in a healthy way, and you get the best from both persons. It doesn't mean they always agree, um, but it does mean that you get those two skills, those two different characters relationship management. I think it helps the broader business. And um, they both enjoy it. I think it's really important, and it's important when business is tough, particularly. I mean, that relationship is easier when things are going well. It's really tested when things are harder, and I think great things can come from it. Their job is to bring the best out in each other, and that benefits everyone and everything, and importantly, the business.

SPEAKER_00 27:32

And if you I mean, this is gonna be a hard question, I'm just gonna flag that. Sometimes I speak to founders and like, oh, I wish I had a co-founder, and they always try and create like a mock co-founder. I mean, from what you've seen, do you think there's anything inherently better about having a co-founder or having a CEO and a COO dynamic? In both cases, you've got two people at the top of business, but it's set up slightly differently. Do you have any view on like which one's better?

SPEAKER_01 28:07

Here I have more reference of not co-founder and having a number two um in the business rather than a co-founder taking that role. So it's definitely more my point of reference. I think it depends who the co-founder is. Is the co-founder a friend, um, a partner in terms of you know a personal partner? And then you've got other dynamics at play as well that can add complexity. Um then if it is possibly it's more equal if it's co-founder, but that can also maybe be more um potential for clash because you haven't got that like step between the two. Um, but it is it is a tough question for me because most of my reference is not with co-founders, um, it is more with someone in that role separately. So I'm not sure if I've clearly answered the question, but I've done the best I can, James.

SPEAKER_00 29:03

Well, it if it feels like it's they are different relationships, but both can be dysfunctional, both can be highly functional. Thank you.

SPEAKER_01 29:11

Yeah, but like all relationships, yeah. And it is about the working at it. And I think recognising, you know, if there is a I mean, I do have good reference from family businesses, which I suppose is similar, you know, where there's uh do work with sort of spousal integration, intergenerational relationships, siblings, and you know, you have a whole different set of emotions at play that sometimes can blind what a business needs. Um, and I said you don't have that element if you don't have those relationships. Obviously, that's more from a family perspective. Um, but you know, sometimes that deep knowledge of people through family and friendships is really powerful, but it can also be used to hurt people as well. So I think there's there's pros and cons all around um and us uh coming back to just needing to work at it and recognise that.

SPEAKER_00 30:05

Yeah. And in some ways, the clarity of that often co-founder pairings do have a senior, despite shareholdings might be equal, there is often a senior, a senior one and a junior one. And I suppose in some ways a CEO, COO dynamic just makes that more explicit. And often you end up in a CEO, COO, co-founder pair, or CEO, CTO.

SPEAKER_01 30:29

I think also, James, just to add that somebody has to be the CEO, I think. And where where I have where I've seen it work, Beth, if you recognise that if you've got two or three of you, or whatever it is, if someone's actually given that title, then they're given the mandate to be the one in charge. I think that's important, otherwise decisions perhaps aren't made, and ultimately somebody needs to be that ultimate decision maker.

SPEAKER_00 31:00

I think that's quite a hard transition to go through for co-founder pairings, is that sort of one person stepping up to be the it often happens at the scaling phase as you build a management team, someone needs to be that person, and if it's already defined, then I suppose you're dodging that particular bullet.

SPEAKER_01 31:16

Well, not everyone wants to, sometimes nobody wants to step up and someone has to be pushed, and that's hard because it you know it's difficult to step into that or feel you you are the one now in charge with perhaps friends or um you know partners as a sort of personal partner point of view. It's about giving permission, isn't it? I think it's back wherever it is, if there's permission, then you all have to stand by the permission that you've given.

SPEAKER_00 31:44

Yeah. Well for for Trap Atlanta, for like for fans listening, what is one thing they they finish this podcast, they go back to their office, and they and they're thinking about what's the one thing I can do to really magnify my number two? What would you suggest?

SPEAKER_01 32:03

If you haven't actually labelled the number two, because sometimes there can be a really good, you know, head of ops sat there or head of finance that is as operating as number two, but you haven't given them the title because you think, oh, it doesn't matter, they don't mind, and they don't want to put their hand up. Actually, it does matter. It matters for them, it matters because you'll probably respect them a bit more, and it matters for the rest of the business and externally. So make sure that you are recognizing the person who is playing that role. Um, I think that is really important. And if anything that we've discussed this morning resonates in some way, and you think, I really need to have a chat with my number two, go out and take them for lunch, go and have a really good talk. Um, make sure that you are working on that relationship, whether that's ensuring that you are having touch points, because sometimes there's just this assumption we busy through businesses talk about touch points with heads of and their teams, and um it all this goes on, and there'll be a structure, particularly as um businesses grow. But that number one, number two, perhaps don't have a one-to-one because they just get on with the job and they have autonomy. But even if it's just a one-to-one to check in that they're okay, on a one-to-one and two, a one-on-one to ask some difficult questions or have difficult questions asked of you. I think that's really, really important. So, if nothing else, make sure you're not ignoring the good person you've got in the business. Give them the title. If you um are listening to this and think, I don't have a number two, go and try and find one if you need one, if you're at that stage, as many probably need a number two and haven't got them. And this hopefully will help you think about what you need from that person, but most importantly, put some regular time in with them and work on that relationship constantly, consistently, continuously, particularly in the challenging times we've got out there at the moment, because it could make you know massive difference to where you're at if this relationship is flourishing.

SPEAKER_00 34:20

Thank you for this. This has been super helpful. I love the permission to challenge concept beginning, but I think that's a really nice technical and just focus on the relationship, make it explicit, and uh don't don't take it for granted.

SPEAKER_01 34:36

Don't take people for granted and respect them.

SPEAKER_00 34:40

Remember subscribe if you want more actual insight from founders scaling now. See you next week and happy scaling.