Episode 11
· 18:41
Welcome
Mike Shannon:back to opening the c suite. I'm Mike Corey, and we're talking about, when you first became CEO. I'm gonna ask Corey most of the questions here because a lot of our rising exec audience is on the CEO path. And so let's crack it open. I'll share a little bit about, you know, founder turning to operational CEO.
Mike Shannon:But, Corey, let's let's start with you. Can you give us the context of what the situation was when you first became CEO, and I'll open it up from there.
Corey Ferengul:Sure. I was the, COO, chief operating officer of a company, and it was a founder led company. Okay. He'd run it for 10 years very successfully, and he had concluded that it was time for him to bring some new blood in, step aside. There you know, we needed some change, and he walked into my office.
Corey Ferengul:This is I was going to New York every week, so I'm in an office in New York, and he sits down. He's like, I think I'm gonna leave. Oh, and he goes, and I think we want you to take the job. I was like, oh, you know, and then explain the process of meeting with the investors and all that good stuff. So, you know, it was not a dire situation.
Corey Ferengul:The company was profitable. The company was growing, but the core product of the company was in decline.
Mike Shannon:Okay.
Corey Ferengul:And we knew that that was not going to last very long, so we had to go through a big strategic overhaul Yeah. Which was going to include new products. It was gonna include new markets. It was it was it was going to be big, and we had been talking about that. And that was when he realized he was great at what we were doing.
Corey Ferengul:Yeah. Kinda let some other people do what's new. Sure.
Mike Shannon:Now were you you were the COO. Were you brought in as a COO?
Corey Ferengul:I was. You were a long time ago. I was brought in as a COO.
Mike Shannon:With succession in mind or that was a surprise?
Corey Ferengul:It was kind of suggested to me, the CFO, the head of sales Okay. That maybe one day there could be some succession.
Mike Shannon:Yeah. Okay. Alright. Alright. So so you were you were brought in at a very high level COO, but it wasn't necessarily, like, this is planned day 1.
Mike Shannon:That's right. So now he comes into your office, you know, and I think you're the CEO. What happens from there? What what's your next communication?
Corey Ferengul:Let's I'll skip the interview process because even if you're internal, they're still investors and you dealt with this as you transition CEO, to a person in the company. The investors still wanna get to know you. They wanna spend time with you. There's an interview process. I had to go through a personality assessment and all these other things.
Corey Ferengul:Oh, yeah. Very in-depth one. Yeah. The first question the, they asked me in the 8 hour assessment was, tell me about your father. Okay.
Corey Ferengul:Oh, we're gonna be here a while. You know? So Deep. Yeah. Really deep.
Corey Ferengul:But, there was no tears. I was proud of that. He didn't never made me cry. But, anyway, you go through the whole, process. So you get there.
Corey Ferengul:You get the job. Yeah. And job number 1 is to win over the organization. Mhmm. Because in this case, I wasn't taking over for an unpopular CEO.
Corey Ferengul:He was he he was liked. He was respected. He had done a really good job. And while he we we kept him on the board, he did an outstanding job of just stepping back Okay. And saying, I'm I am not here every day.
Corey Ferengul:I'm not gonna check-in with people. Yeah. He was a, you know, real professional.
Mike Shannon:And and how long are we talking from that first meeting to when the transition occurred? That's 60 days. Oh, it was fast?
Corey Ferengul:Fast. Yeah. It was fast. I thought a year. No.
Corey Ferengul:Okay. No. And then different than your transition, which we'll we'll touch on. No. Because, they all knew that once we got to that point and he was ready to it was we we were gonna go.
Mike Shannon:Yeah.
Corey Ferengul:So it went pretty quick. But step 1 for me and the thing I agonized over was what do I say to the company when it's announced? Yeah. How do I win their respect? Because I was COO, but that means I didn't own parts of the company responsibility wise.
Corey Ferengul:I had no responsibility for sales. Nothing on finance, HR, m and a. Yeah. I owned everything else. Yeah.
Corey Ferengul:I own, you know, all the other parts of the business, but I didn't own, in particular, sales. Yeah. And the sales didn't just like me. They didn't know me.
Mike Shannon:Yeah. So on that point, right, I mean, I you know, we're all sitting out here in public. It'd be everybody loved it, but this is opening the c suite. Yeah. Did you have any challenges from that next layer of leadership?
Mike Shannon:Like, what was the hurdle
Corey Ferengul:you had? The CFO left and the head of sales left.
Mike Shannon:Who thought they may have otherwise been the CEO?
Corey Ferengul:You know, CFO had some different personal issues Yeah. But, looked around and said, sorry. And he and I'm actually really good friends with him. And we had dinner not that long ago. And his thing is, it made sense.
Corey Ferengul:Yeah. And the head of sales was like, then I see I don't have a next step here. So I'm not.
Mike Shannon:Yeah. Okay. So so now you've got 2 main roles you've gotta fill. 3.
Corey Ferengul:I used to have 1. Yeah. You said. Yeah. Right.
Corey Ferengul:I was I had a job too.
Mike Shannon:Right. Right.
Corey Ferengul:Right? So we had to go fill those, and we decided to break my role into 2 roles. Yeah. So I had to go bring in 4 executives.
Mike Shannon:Yeah. Now was that I know it's both, but challenge or
Corey Ferengul:opportunity? It it it was both, but it was a challenge before it was an opportunity. Okay. Because the first thing is, alright. I'm gonna learn a new job.
Corey Ferengul:Yeah. There's concern. What do the investors want? How do I win over the employees? When does it make sense to engage with the customers?
Corey Ferengul:At what level? What's the messaging? All this other stuff. Now we're gonna have all these other changes. How am I gonna talk to those teams?
Corey Ferengul:And so the challenge is much more like, how are we gonna lead finance Yeah. Without a CFO? How are we gonna drive sales without a head of sales in in the seat? I could've keep doing my job before, but I couldn't do it at the same level. So I could run the staff meetings and and projects, but I I couldn't check the work at the way I used to and and get in with with teams and and think through strategy and such.
Corey Ferengul:So it was gathering the other execs that could set in the seat with me and stayed and said, we need you to do that. We need you to do that. Like like and then the opportunity was we brought in a great head of sales. We brought in the CFO, actually came in as an interim temp CFO Oh. And stayed.
Corey Ferengul:Okay. Yeah. This is where investors were incredibly helpful. Went to our lead investors. And he said, I know you're a first time CEO.
Corey Ferengul:I got an agency. We'll have a guy here tomorrow on the CFO side. And, you know, he'll stay as long as we need. Okay. He stayed in And that became you a long time.
Corey Ferengul:He likes it. And he stayed through our exit. You know? Great. Sales was a very hard process.
Corey Ferengul:Took us a while, but we figured out a rhythm there. And but it took well, you know, so the the opportunity did appear. We did build a good team. Yeah. We did have a good rapport, but it's more challenge upfront.
Corey Ferengul:Yeah. And you're combining that with the fear of doing the job you've never done before. Right.
Mike Shannon:Now on that point, I know you in a previous episode, you talked about some of the exec coaching that happened over a while. Yep. But now actually taking the c CEO from a skill standpoint, what did you feel like you were most, focused on working on? Was there was there anything new you felt skill wise you had to develop? Sales leadership.
Mike Shannon:Okay.
Corey Ferengul:It wasn't about knowing how to work with salespeople, and it wasn't having to know how to, talk to customers. It was about knowing how to evaluate sales leaders as a leader. Yeah. It was knowing how to, you know and and, you were great at this, and you're all looking at all the metrics behind the pipeline. Right?
Corey Ferengul:And, look, CEOs, especially in the technology world, kinda grew up through 3 paths. They grew up through sales path, a product path, or a finance path. Right? I came up through the product path.
Mike Shannon:Yeah.
Corey Ferengul:I had plenty of understanding of finance path, and honestly, a good CFO handles a lot of that anyway. But problem number 1 was I've never run a big sales organization. So that was learning curve 1. Learning curve 2 was how to own the model, not just be a consumer of the financial model. So I was I was a consumer of the financial model in my previous role.
Corey Ferengul:I had, you know, over a 1,000 people working for me at, you know, 100 of 1,000,000 of dollars of budget.
Mike Shannon:And just the pause, when you say consumer of the financial model, assuming me
Corey Ferengul:the CFO Also explaining yeah. Yeah. Yeah. So I had a whole team and I would be told my numbers Yeah. And I had to learn how to manipulate and live within it.
Corey Ferengul:Yeah. The owner of the model, you have a whole different set of decisions to make. Right? And, you and I have talked before about, well, am I gonna change make this budget change? Do we invest here?
Corey Ferengul:If we cut this part out, I could invest in this thing over here. It's a whole different set of decisions. So those were the two areas, but that meant I had to neglect the area of the business that people knew me best Right. And wanted me to do stuff more used to be answering questions. Right.
Corey Ferengul:So it was just a very difficult first 90 days balancing act. No different than anyone else's. Not saying it's unusual, but it's a difficult transition. Sure.
Mike Shannon:Okay. So, who is your surrounding kinda support team?
Corey Ferengul:I have a personal desire to always have a person in the exec team that is kinda my sounding board. And a CFO is a perfect person for that, but I also need somebody who is is gets the strategy of the business, understands the ins and outs. And I had a gentleman, at in this role, Undertone, Rob Schwartz, who I still friends with who, was just a really, really smart person. Okay. Always want him to be smarter than you.
Corey Ferengul:Make sure surround yourself people smarter than you. And, very calm and very organized. And I'd be like, well, we should. And he'd be like, yeah. That sounds right.
Corey Ferengul:Maybe maybe he wasn't right. Yeah. But at least we would stop. We'd think through it. And so I Mhmm.
Corey Ferengul:That someone to walk you through it, surround yourself with that.
Mike Shannon:So your CFO was kinda your your right hand confidant.
Corey Ferengul:Your your CFO is always your if if your CFO isn't one of your closest other exec teams, you have the wrong CFO. Yeah. We're not close on the exec team member. So, yeah, the CFO is the one who you know, the new CFO came in, went through the model. I don't trust this.
Corey Ferengul:I wanna change that. And I I gave him a few weeks to get comfortable and come back to me. Sure.
Mike Shannon:But the, and then outside of your exec team. Yep. How about that? Sales leaders. Okay.
Mike Shannon:I always To give you a sounding board on assessing sales.
Corey Ferengul:And learning, gaining their trust, learning what's going on in that part of the business. Yeah. Understanding. And so I say sales leaders because I came from a different team. If I came out of sales, I would have gone to a different part of the organization.
Corey Ferengul:Right? So it's like, where don't you have the relationships? That's where you invest.
Mike Shannon:Alright. So the rising executive who's on the CEO path. Yep. 2, 3, 4 years in advance, what can they be doing to shorten the the ramp and the learning curve when appointed CEO? So number 1 is
Corey Ferengul:make sure people know you wanna be CEO. And and I think we had this happen in situation, Mike was CEO and transitioned to someone, and we did do a year long transition. But we knew this person was interested in it. And and and we knew it made sense, and that gave us a reason to look at them. Sometimes they may not have.
Corey Ferengul:Honestly, it would come out of all our meetings, and you said, which one of them is the CEO? I'm like, I would have said, oh, that one. But then when you pointed her out, I was like, oh, yeah. That that makes Yeah. Makes sense now.
Corey Ferengul:Right? Yeah. And she's done terrific. And make sure they know. Yeah.
Corey Ferengul:Number 1. Yeah. Number 2, build relationships across the organization. The more yeah. People stay insular to their teams.
Corey Ferengul:Right? The more you know other parts of the org Yeah. A friend of
Mike Shannon:mine What comes to my mind too is not to say, like, every organization has
Corey Ferengul:all these political battles, but, you know, you
Mike Shannon:talk about product and sales. Right? So there, there can tend to be the divide of the product folks and the revenue of the sales folks. And, you know, like you said, both of those can be aligned to see
Corey Ferengul:That's right.
Mike Shannon:And if you wanna be a CEO
Corey Ferengul:That's right.
Mike Shannon:It would seem to be I was from smaller companies, but it would seem to be advisable to not so much get into the rivalry of the departments, but really Yeah. You know, try to
Corey Ferengul:be helpful on both sides. Well, look. The previous time I was up for a CEO role was at the large public company, and our CEO was retiring. They interviewed the head of sales. They interviewed the CFO.
Corey Ferengul:Yeah. And they interviewed me Yeah. The product guy, and they hired the head of sales. Yeah. And the CFO and I eventually left.
Corey Ferengul:Yeah. So not a very, you know, uncommon story, but it was, you know, it it's it's just what it's just how it works. Yeah. Yeah. Yeah.
Corey Ferengul:How it's gonna go. Yeah.
Mike Shannon:So it relates to the cross stakeholder Cross relationships.
Corey Ferengul:And the the other big thing is look for how can you contribute broader to the company than just your day job. Yeah. Right? So, yeah, you've got your set of responsibilities and your KPIs and and the things everyone looks to you to deliver. How do you contribute other places?
Corey Ferengul:Because that's how you learn about those parts of the business. Yeah. Not just having lunch
Mike Shannon:with somebody there. Yeah. Yeah. It makes makes sense.
Corey Ferengul:So so let me ask on a CEO transition, how did you handle the other side of that when you transitioned out as CEO in a very planned and thought through way as opposed to many of us leave as CEO because we just sold the company or it's time for you to go. Sure. Sure. Right? You're in a whole different spot.
Corey Ferengul:Sure. Sure. Well,
Mike Shannon:yeah. So for me, it was an opportunistic, kind of thing. So I wasn't, you know, searching, like you said, who's who would be the next CEO? I saw somebody, you know, taking, I think, a certain style of leadership that I thought our company needed. And there was a bit of, like you said, you know, many CEOs, they sold the company and they leave.
Mike Shannon:Now I knew we were going to market. And so it started actually before anybody. It was just a coffee, with with Kelsey who took over the company and just asking that question. Like, hey, you know, Would you ever wanna be CEO? Right.
Mike Shannon:And I I could have been like, oh, not really, whatever. And then that that would have been it because that was just by the way, the candidate that I thought was was, you know, the right one. So, so when that was, like, an enthusiastic, yeah, let's work it out. Then there was, well, this may never happen.
Corey Ferengul:Yeah.
Mike Shannon:But let's just we were doing, we we were doing sort of, like, growth plans across all of our team members, but particularly execs. Like, what can you get exposed to more? So it's like, alright. Let's just pretend that's the the path. Yeah.
Mike Shannon:So I started having a plan of, like, alright, here's the areas that I felt I needed more exposure to. Yep. You know, as we grew and I became kind of the CEO amongst other cofounders. But then going to the board, yeah, Kelsey, that kind of viewed it almost like a campaign. Right?
Mike Shannon:Like, it was I went to you and Corey, which we used to do a small council after board meetings. I'm sorry. You and Troy. And, and there was a series of conversations and then a plan of, hey. Here's I think you did a few interviews.
Mike Shannon:Yep. I did a few interviews. And there was kind of a collective, hey. Alright. Here's the type of exposure, skill development surrounding people that would need to make this successful.
Mike Shannon:And I wasn't coming at it like it's this or else. It was like, if it works out, great. I'd love to move to the next venture. If not, you know, I'm here.
Corey Ferengul:Yep. Yep. So Yep. That was maybe a little different. Yeah.
Corey Ferengul:Very different, but I'm just pointing out. There are many different ways in which that happens. Right? Yeah. And, it but there was a couple of important things that are common between the two.
Corey Ferengul:First and foremost, and it's the theme of this, you should probably call the podcast communication. Sure. The suite is communication suite. Right? Yeah.
Corey Ferengul:It's it's communication across the board, and it's that person knowing they're raising their hand, let you know. And I can't say enough about how important communication is to the organization and to the customers when you take over. Yeah. And CEO transitions are stressful for people. Totally.
Corey Ferengul:Because change is stressful for people. What about my income? What about my job? What's gonna happen? Your job is to make it not stressful for them.
Corey Ferengul:Make them comfortable. Make them understand, why what it's gonna mean to them. And, yeah, you may have to make a whole bunch of changes. Doesn't mean you can't communicate while you're doing
Mike Shannon:it. Yeah. Right.
Corey Ferengul:Right. And, I I will say a little funny story. When I became, CEO, we decided we're gonna have a big company meeting. Yeah. And we were going to announce that our CFO was leaving.
Corey Ferengul:Our head of sales was leaving, and the CEO was leaving. He changes. And then I was taking over. Business new CEO. Yeah.
Corey Ferengul:And then I'm taking over. And I had rehearsed my speech all weekend. And I was ready, and I I had, you know, here's my message to sales. Here's my message to everybody else. Here's how we're gonna do strategically, and I rehearsed it as, you know, and and, I'm sitting there, and the CEO says I'm gonna be stepping out and there's a groan in the crowd.
Corey Ferengul:And it wasn't it wasn't let it was it was they weren't happy.
Mike Shannon:Yeah. Right. And he's like, no.
Corey Ferengul:Also, these other guys and there was more like like almost, oh, wow. Yeah. And one of the, one of the women in the office just turns and looks at me, and I'm sitting in a sport coat in office. We don't usually wear sport coats. She knew right away it was about to happen, and she just gave me a look.
Corey Ferengul:I was like, they don't wanna hear anything. Oh, no. So I changed. I just completely changed, backed that up and I said, we're gonna hold small group meetings over the next few days and we'll talk all evening
Mike Shannon:Yeah. Right. Right.
Corey Ferengul:And just take some time to digest this and ended it. So reading the situation Yeah. Was my first lesson. Like Yeah. Forget my plan.
Corey Ferengul:It just disappeared. Yeah. Right?
Mike Shannon:Well, my my oh, go ahead.
Corey Ferengul:I was saying the small group sessions were critical.
Mike Shannon:Yeah. This was so I my town hall story with that was that Kelsey was operating as COO for a period of time. And then I was gradually stepping away from some of these key communication meetings. So she had been meeting all hands, for example. Then if you remember, our path was conveniently, I had a second kid coming.
Mike Shannon:So I stepped out on maternity leave. Yep. And that was part of the board plan was okay. That's then a period of time where, you know, you you can have hold the vote of approval or not Yep. While she's at the helm.
Mike Shannon:Yep. And so what I thought was convenient for me, I then came back. The board had done the vote of approval. And then I let an all hands and basically said, well, you know the way things have been going already? Yeah.
Mike Shannon:We're gonna keep them going that way. So the change had already occurred Yep. Versus what you're just describing when the grown is like, I wanted to avoid that, like, any shock to the system. Yeah. Yeah.
Mike Shannon:Real change. It's like, that was convenient. Change had already occurred. Yeah. And then it was just, we're gonna keep it going that way.
Mike Shannon:Everybody felt good. And it was congratulatory. Yeah. Yeah. Perfect.
Mike Shannon:So there's a little bit on the the point we're out of time, though. But, the the point of the CEO going from peer to then the CEO Leader. And that's an interesting one where you said you were COO, and then your exec peers actually were not their following. For me, and what I think a lot of cofounders go through is, like, that was I probably made it more awkward myself because it was unnatural for me to now be kind of the manager Yes. Amongst other, you know, otherwise equal cofounders.
Mike Shannon:And so I remember, like, tentatively, saying, okay. I'm gonna start holding, you know, these meetings and then Yeah. You know, I'm gonna do these reviews or whatever. And I think part of that is just, like, you know, internally just getting over that and just owning it. Okay.
Mike Shannon:Everybody needs to play a role.
Corey Ferengul:They want you to play this role. Just own it. Yep. Yep. So there's some ideas of things to think about if as you work your way up, broadening yourself to become CEO, and things to think about when you take on the role.
Corey Ferengul:Thanks.
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