Franchise operations, from a Post-it note to 330 cities: Cameron Herold

The best test for franchise operations, or any operating system, comes from Cameron Herold and fits on the object it is named after. If you can write it on a Post-it note, and the worst employee in the worst market in the worst weather can execute it, you can scale on it.

Herold is the founder of the COO Alliance, the network for chief operating officers, and hosts the podcast Second in Command. He was COO at 1-800-GOT-JUNK, where the business grew from $2 million to over $100 million in six years, with six consecutive years of 100% growth, franchisees in 330 cities across four countries, 13 operating P&Ls, thousands of press stories, a ranking as the number two employer in Canada, and an appearance on Oprah. They did it against roughly 17,000 competitors.

Employees first, and he means the ordering

Michael opens with Jack Ma's line about customer first, employee second, investors third. Herold disagrees flatly.

His order is employees, customer, then profit and revenue. The reasoning is mechanical rather than sentimental. Obsess over employee happiness and engagement and they will look after your customers and go through walls for you. Let employees feel they come second to the customer and they will feel overworked and unappreciated, and they will find ways to cut corners.

His observation about what you get in return is the part operators should note. People who feel genuinely cared for look for optimizations, look for automation, stay late and pick up the pieces without being asked.

Hiring people who have already done it

Herold's approach to A players starts with definition, not sourcing. Describe what the person actually has to achieve, then find people who have already achieved it, at a price you are willing to pay. He is explicit that both halves matter, since you can always overpay for someone far beyond the need.

The analogy he uses is the clearest version of this argument I have heard.

Almost anyone can tell you how to swim four strokes, and might drown attempting butterfly. If you hire for knowing how, that is what you get. Now specify someone who has held a world record, competed at the Olympics across all four strokes, and broken records in the medley. That is a completely different person, because they have proven it.

So he hires people who have done the thing he needs done and who already fit the culture, on the grounds that he does not want to spend energy molding anyone.

Culture as a magnet, and how it avoids sameness

Herold's line is that culture should be more than a business and less than a religion, which has earned him invitations to discuss where culture goes too far.

The mechanism he describes is deliberately two-directional. Build something that pulls the right people in like a magnet and pushes the wrong ones away before they apply, creating an energy vortex that compounds.

The payoff is that the right people will accept somewhat less money, because they are coming for the cause, the colleagues, the standard being set, the core values they already hold, the purpose, the long-term goal and the vivid vision.

Asked whether that produces a monoculture, he separates two things people conflate. Personality profiles should vary widely, across whatever framework you use, whether that is DiSC or Kolbe. What should not vary is belief in the purpose and the values.

His example is Apple, where deep technical, financial and manufacturing expertise coexist in very different kinds of people who all believe the same thing about challenging the status quo.

Feedback like you would give your own kids

On performance reviews, Herold thinks business has overcomplicated something simple.

His comparison is his two sons, then 18 and 20. If he waited three months to give them structured feedback it would not work. He praises them continuously, tells them when they are getting it wrong continuously, coaches and raises the bar continuously.

The employee version is the same: proximal, specific feedback, always raising the bar, always attached to thanks and recognition of how far someone has come.

His answer for how a COO builds that at scale starts with hiring for it. Look for people who thank the host, the busser and the server, and who look them in the eye, because those are the people who will do it at work. He cites the Taj Hotel Group's practice of hiring from villages and small towns rather than large cities, on the belief that the instinct survives better there.

The example he keeps returning to is Howard Behar at Starbucks, who spent two hours every Friday handwriting thank you notes to store employees. He did not know who to write to, so a list appeared on his desk and the cards went out by post. Herold's point is the arithmetic: a few percent of a large company CEO's week, spent entirely on gratitude.

The rest is ritual. Open meetings with gratitude. Thank someone specifically for demonstrating a value. Every time you set three new goals, celebrate the three you just hit.

Building the operating system from nothing

When Herold arrived at 1-800-GOT-JUNK there were 14 people at head office, 12 franchises just sold and a couple operating. The call center had processes and the trucks had loose ones. There was no operations manual, no training manual, no marketing plan, no coaching program and no franchise sales program.

His first day is the story worth telling. Franchise training was already underway for two franchisees signed six weeks earlier. Both told him that if this was what training looked like, they wanted to hand back their franchises and leave.

The diagnosis was straightforward once he looked. The director of marketing opened by introducing himself as a former truck crew member and a lawyer with no marketing experience. There were no pretests, no written content, no role play, no speaker notes, no handouts.

He and the founder rewrote the training every night for the next day.

What made that possible was knowing how adults actually learn. Herold works through a full cycle of conceptualization, experimentation, concrete experience and reflection, and deliberately mixes visual, auditory and kinesthetic material so people are watching, listening and doing.

The 300 page manual nobody had to memorize

Herold wrote the first operations manual, around 300 pages across two dozen chapters. The interesting part is how he made people use it.

Every franchisee and every employee took a 90 minute open book test, working through questions by finding the answers in the manual. Franchisees needed 85% or better before they could open.

His reasoning comes from his own schooling. He remembered concepts but could not regurgitate them on a test, and always knew where to find the answer. In franchising, nobody is memorizing 300 pages. What he needed was for people to look things up, so instead of calling head office, they check the relevant chapter, and only call if the answer is not there. If they find a better way, it goes into the manual.

The behavior he was designing for is what he calls interdependence. Dependent enough to follow the system when one exists, independent enough to improvise when one does not, and communicative enough to report what they did so it can be captured. What he did not want was everyone inventing their own approach, because there is usually a better way, which is why the format exists.

The middle ring most companies never train

Simon Sinek was on 1-800-GOT-JUNK's advisory board four or five years before Start With Why, spoke at their conferences and stayed at Herold's house, so Herold has watched the golden circles from the beginning.

His use of them is a training diagnosis. Companies do the why reasonably often: purpose, values, vision, the history and the stories that made the company what it is. Companies definitely do the what: how to do the job, use the software, serve the customer.

Almost nobody trains the how, which is the middle ring, and Herold's list of what lives there is uncomfortable. Coaching. Delegation. Time and email management. Project management. One-on-ones. Interviewing and hiring. Conflict management. The executive functioning skills he considers most leaders deficient in.

His example is interviewing. Every manager conducts interviews. Almost none have been trained in structuring one, running a reference check, using open and closed questions or a deliberate pause. And then the company concludes that it is hard to find good people.

His parallel is the one everyone will recognize. Saying meetings are terrible is usually a statement about the person running them.

Simple systems, and outcome over process

Herold's rules for process are consistent with the Post-it test.

Keep systems simple enough that they get used. He is unimpressed by process for its own sake, and recalls a CEO proudly reporting 82 documented processes, to which his response was to ask what the critical few things are that must be done perfectly.

His sequence is deliberately low-tech. Document it on a Post-it. Move it into a shared document. Break it, revise it, prove it works. Only then move it into dedicated process software. If understanding the process requires an advanced degree, nobody will follow it.

Then comes the mantra that keeps the whole thing from calcifying: outcome over process. He attributes the illustration to Ray Dalio. If you see a snake in the grass, you do not write a standard operating procedure for killing snakes. You deal with the snake.

He gives examples of overriding his own funnels, in hiring and in membership, when the answer is already obvious. And he adds the necessary caveat: you would not want to run the whole company by winging it.

Vivid vision, and reverse engineering from it

Herold's planning method deliberately does not start with a financial model.

He asks a CEO to imagine stepping three years forward and walking around their own company. What does the space look like. How are the meetings running. What is the culture, the marketing, the public profile, the meeting rhythm, the dashboards. Describe how it looks, acts and feels, without any concern for how it came about.

That description, four or five pages, is the vivid vision. From there you work out the projects that make each sentence true, and the order they have to happen in.

His analogy is building a house. You do not install the cabinets and the stove on day one. Foundation, walls, electrical, plumbing, and the beautiful parts come after the painting. Businesses have the same order of operations.

Only then does the financial layer appear. A one-year plan you can budget against, rough two and three year project plans, revenue and profit objectives at each horizon, and an operating plan for year one that reverse engineers into quarterly and monthly milestones.

Plan, brief, execute, debrief

The weekly rhythm comes from the military, and at 1-800-GOT-JUNK it was written above every whiteboard.

Keep the year visible, know the month, and then define the top five things for the week. Assess whether people know how to do them, which determines whether you coach, mentor, cheer or stay out of the way. They commit, you brief, you get out of the way. At the end of the week you debrief on what worked, what did not, what to adjust and what support anyone needs, and set the next week's plan.

The results were remarkable. Herold says they hit 59 of 60 forecast months over six years, with each year's forecast set three months before the year began.

The discipline underneath was daily measurement. They reported numbers daily and tracked the monthly trend daily, so they never waited until month end to discover where they were.

Why seasonality made him a better operator

The origin of that intensity is College Pro Painters, and the numbers are worth stating.

Four months to recruit 800 franchisees. Two months to hire and train 8,000 painters. Four months to paint $64 million worth of houses. Then on September 1st, 8,800 university students quit and returned to school, and the whole thing was rebuilt from scratch the following year.

His conclusion: when you construct an 8,800 person company annually, you become genuinely excellent at operations, execution and planning.

The specific pressure was time. Seventeen operating weeks meant a single week was 6% of the year, so daily measurement was the only way to course correct in time.

He carries that urgency into businesses that have the luxury of not being seasonal, and refuses to let the absence of a deadline create slack. His framing is that a business has three inputs, people, time and money, and the job is maximizing the return on all three.

The tactics are small and psychological. Nothing is due Monday, it is due Friday. Nothing is due January 1st, it is due December 31st.

His delegation method is the most immediately stealable thing in the episode. He does not ask when something will be finished. He asks how little time it would take to get a good result, not a perfect one, and then asks the person to find that block in their calendar. Tell me how little time it takes and when you are doing it, rather than when it will be done.

And when he assigns work, he sets both a time budget and a money budget, because otherwise the work expands to fill whatever space it is given.

Speak last

Herold was named a CEO whisperer in Forbes, by the publisher, in a piece about the vivid vision concept. Asked when to whisper, shout or stay quiet, his answer is structural.

The leader should always speak last. The job in a meeting is growing people's skills and confidence, and a leader who talks constantly damages both by never letting anyone else contribute or be seen to be right.

The rest follows: use two ears and one mouth in proportion, watch the nonverbal signals, and ask the leadership question, which is what underlying system is broken or missing. That creates a no-blame environment.

His title for the top job is chief energizing officer, infusing the organization with the energy that moves it.

On shouting, his position is clear. Possibly in private, never in public, because it destroys energy and trust. Be firm and fair, remember there is always something else happening in someone's life, and keep praise public and criticism private.

The CEO and COO as a single force

Herold is writing a book on this relationship, and his summary is symmetrical.

The CEO's job is to make the COO look good internally, and the COO's job is to make the CEO look good internally. Behind closed doors you can argue and fight. In front of the team you are one force.

Each removes obstacles so the other works only in their areas of unique ability, and each takes off the other's plate the things they dislike or are bad at.

His criticism of CEOs is pointed. They focus so much on their own development that they miss the opportunity to grow their second in command, which is the reason he founded both the COO Alliance and his leadership course. Grow the people and they grow the business.

So the CEO's list is: grow the COO's skills and confidence, find them mentors, remove obstacles, be a resource, be clear about vision and culture, and then get out of the way.

Skills, confidence, and knowing when to stop cheering

Herold's leadership course codifies twelve core skills he considers durable, on the argument that these have not changed in a century. Coaching is not software. There is a craft to raising someone's bar and building their confidence, and sports demonstrates the difference between good and bad coaches plainly.

The pattern he describes is a two-rung ladder. Confidence enables an attempt, the attempt produces skill, skill produces confidence, and so on.

His illustration is learning to ride a bicycle, where a parent's encouragement after falling twice is what produces the third attempt. And then the counterpart: teaching his eldest to drive required constant reassurance, and now that his son drives him home at midnight, praising him for braking well would be absurd.

The management lesson is knowing when to withdraw the praise because the skill no longer requires it.

Interviewing for behaviors, not comfort

Herold's caution about hiring processes is one every operator should sit with.

His claim is that no genuinely great salesperson would survive a standard screening process, because the behaviors that make someone effective in sales are the ones a policy-oriented screener finds alarming. The mismatch is not a judgment on either group, it is a failure to specify which behaviors the role actually needs.

His prescription is clarity about the behaviors and skills, hard questions, and actual competence in the mechanics: reading a resume, taking notes, mixing open and closed questions, probing, using silence, and knowing what to ask to surface leadership, tenacity, introspection and interdependence. That is the process he built at College Pro Painters, where they hired 8,800 people a year, which he notes very few companies in history have done.

The $100 million company that could not make payroll

Herold's answer to the standing question is a warning rather than an anecdote.

1-800-GOT-JUNK was doing $100 million and had been consistently profitable, and it ran out of cash. They had spent $5 million on a renovation, an office move, a glass stairwell, bonuses and taxes, paying cash for all of it, proud of never having needed a credit line.

Then they went to the bank, which pointed out that they had no cash. To make payroll they borrowed $420,000 from the founder's mother.

His comment is that this is not taught in business school, and it is the reason he thinks the CEO and COO have to be a genuinely trusting pair, because when it goes sideways they need to be able to move together.

The 5 things I took away from this conversation

1. The Post-it test. If a system cannot be written on a Post-it note and executed by your least experienced person on their worst day, it will not scale. That single test would eliminate most of the process documentation I have seen in operating companies.

2. The open book exam. Do not ask people to memorize the manual, test whether they can find things in it. It teaches self-service, keeps head office out of routine questions, and creates a feedback loop where better answers get written back into the manual.

3. Ask how little time, not when it will be done. This inverts the delegation conversation entirely. A deadline invites work to expand into it. Asking for the minimum viable effort and a calendar slot produces both a smaller estimate and an actual commitment.

4. Train the middle ring. Companies train purpose and they train tasks, and skip coaching, delegation, interviewing, meetings and conflict. Those are the skills every manager uses daily and almost none have been taught. It is the cheapest available improvement in most organizations.

5. Speak last. If the most senior person in the room talks first, everyone else calibrates to them and you learn nothing. Herold ties it directly to growing people's confidence, which is the argument that makes it stick rather than a meeting-facilitation tip.

FAQ

What makes franchise operations work at scale? Systems simple enough for the least experienced operator in the hardest conditions to execute, documented centrally, and enforced through comprehension rather than memorization. At 1-800-GOT-JUNK that meant a 300 page manual paired with an open book exam franchisees had to pass at 85% before opening.

How do you scale a franchise training program? Design it around how adults actually learn, cycling through concept, experiment, experience and reflection, and mixing visual, auditory and hands-on material. Herold's rewrite included pretests, written content, role play, speaker notes and handouts, none of which existed in the version two franchisees threatened to walk away from.

How much process is too much? When it stops being used. Herold's sequence is a Post-it, then a shared document, then dedicated process software only after the process has been tested and revised. His mantra of outcome over process exists to stop teams following a procedure when the situation calls for a direct decision.

How do you run effective meetings as a leader? Speak last. Herold's reasoning is that the leader's job in the room is growing skills and confidence, and a leader who talks first prevents both. Combine that with asking what underlying system is broken rather than who made the mistake, which creates a no-blame environment.

What should the CEO and COO relationship look like? Symmetrical and united in public. Each makes the other look good internally, removes obstacles so the other works in their strongest areas, and takes on what the other dislikes or does poorly. Disagreement happens privately, and the CEO carries explicit responsibility for developing the COO.

Also mentioned

• The COO Alliance and the Second in Command podcast
• 1-800-GOT-JUNK and College Pro Painters, the two franchise systems behind Herold's operating playbook
• Simon Sinek and Start With Why, developed while Sinek advised 1-800-GOT-JUNK
• The One Minute Manager by Ken Blanchard and Paul Hersey's situational leadership model
• DiSC and Kolbe, the profiling tools Herold uses to keep teams varied
• Parkinson's law, the reason he sets time and money budgets when delegating
• Herold's Vivid Vision method, and his Invest in Your Leaders course

Listen to the full episode

Cameron Herold on Between Two COO's

Between Two COO's is hosted by Michael Koenig. Subscribe on Apple Podcasts, Spotify, or wherever you listen.