Transitioning from his role as the chief executive officer to the chief operating officer at thoughtbot, a software design and development agency, Chad Pytel enhances the organization’s operations across its remote locations by streamlining its workflow and providing the teams with the tools they need to be efficient at their jobs.
[1:47] Chad describes the services thoughtbot provides.
[3:00] Chad talks about transitioning from CEO to COO at thoughtbot.
[6:09] Chad highlights the difference between his day-to-day activities as CEO and COO.
[8:06] How does Chad create a positive remote culture, working with remote teams in different countries?
[10:57] Chad explains how he manages the teams in different countries with different time zones.
[13:02] Chad talks about creating custom systems at thoughtbot.
[16:16] Chad gives advice to anyone transitioning from a CEO role to a COO role.
Fascinated with software technology, Chad did freelance web design and development through high school and college.
As CEO at thoughtbot, Chad expanded the organization internationally with teams working in various countries remotely. He currently manages the operations of the teams in their different locations.
Speaker 1: Welcome to the Process Breakdown Podcast, where we talk about streamlining and scaling operations of your company, getting rid of bottlenecks and giving your employees all the information they need to be successful at their jobs. Now. Let’s go get started with the show.
Chad Franzen: Chad Franzen here, co-host of the Process Breakdown Podcast, where we talk about streamlining and scaling operations of your company, getting rid of bottlenecks and giving your staff everything they need to be successful at their job. Past guests include David Allen Of Getting Things Done and Michael Gerber of the E-Myth, and many anymore. This episode is brought to you by SweetProcess. Have you had team members ask you the same questions over and over again, and this is the 10th time you spent explaining it? There’s a better way and a solution. SweetProcess is a software that makes it drop dead easy to train and onboard new staff and save time with existing staff. Not only do universities, banks, hospitals, and software companies use them, but first responder government agencies use them in life or death situations to run their operations. Use SweetProcess to document all the repetitive tasks that eat up your precious time so you can focus on growing your team and empowering them to do their best work. Sign up for a 14 day free trial, no credit card required. Go to SweetProcess.com. That’s Sweet like candy, S-W-E-E-T Process.com.
Chad Franzen: Chad Pytel is the founder and COO of Thoughtbot, a software, design and development consultancy of 100 people that is about to enter its 19th year. They help companies of all sizes create new products or improve existing ones. Chad, thanks so much for joining me today. How are you?
Chad Pytel: Thank you for having me. Hopefully it’s not confusing for everybody to have two Chads.
Chad Franzen: No hopefully not, not hopefully not. Hey, tell me a little bit more about Thoughtbot and what you guys do.
Chad Pytel: Yeah. I founded Thoughtbot, like I said, almost 19 years ago. And we help organizations of all different kinds, all different sizes, from brand new startup founders to creating a new product, existing company who want to do something new or existing companies who have a product that they need help with, whether that be scaling or best practice refactoring, burning down technical debt, doing framework upgrades, that sort of thing.
Chad Franzen: Can you give me an example of a new product that you guys helped with?
Chad Pytel: Well, we helped back when Groupon was just getting started and scaling dramatically. They were a client of ours. We’ve helped other companies that people know about that needed to scale quite a bit in the product side of things, like Uber. And we’ve helped a lot of other companies that people haven’t heard of yet.
Chad Franzen: Sure, sure. Hey, you founded the company 19 years ago and you have been the CEO up until maybe a year ago, is that right?
Chad Pytel: That’s right. Yeah.
Chad Franzen: And then you moved into a role as COO. What led to that?
Chad Pytel: Well, creating a company that lasts is really important to me. And I’m pretty good at sales and business development, but as we were approaching the 75 to 100 person mark, I had built an incredible team of managing directors and business development people that I was really proud of and liked working with. But it became pretty clear to me that, in order for us to get to the next phase of growth as a company, that maybe I wasn’t the best leader for that team of people.
Chad Pytel: And we originally, on our org chart, had a spot, VP of sales and CEO. And my thinking up until that point had been, “We’re going to find somebody to fill that spot.” And as I thought through that more, I had lot of difficulty in my mind and I felt like we weren’t quite at the point yet where we could decouple the role of CEO from business development. I think this might be because we’re a consulting company, so, so much of what we do is sales and business development, very closely tied to the kind of work that we do for people. I think that’s part of the reason why it didn’t quite make sense for us to couple that. And so, once I came to that realization, I realized, well, if we’re not going to decouple the CEO role from the VP of sales role just yet, then what might be best for the company is to have a new CEO that is able to do both of those things most effectively.
Chad Franzen: What led you to start Thoughtbot, found Thoughtbot?
Chad Pytel: I had actually done freelance web design and development myself since I was in high school. And so I had done that and worked with a small group of people for a long time. And graduated from school, from university in 2002 with every intention of just getting a normal job. But that was difficult. At the time, we had just had the September 11th attacks in the US and the dot-com bubble had burst while I was in university. And so the job market wasn’t everything that I thought it was going to be. And so I, once again, fell back on that freelancing and started to build a team of people that I enjoyed working with. And then after we had a failed startup and worked at a failed startup, fell back on that freelancing that I had done all throughout high school and college. And that’s where Thoughtbot became Thoughtbot.
Chad Franzen: You’ve been CEO for 18 years, you moved now to COO. Can you tell me about the difference between your day to day function as COO compared to before as CEO?
Chad Pytel: Yeah, big part of my day to day for while I was CEO was either talking to potential customers or working with the people at Thoughtbot who talked to potential customers. And actively working on crafting our approach and solutions and to try to win that business and make sure that we were known in the market for doing great work. And now I am more in support of all of those activities, as well as everything else across Thoughtbot. We made the decision to go 100% fully remote last year, we had six offices. And so we got rid of all of our offices. We went 100% remote. So a big part my day to day now is making sure that we’re building the kind of strong remote culture that we want to have as a company, that everyone’s set up for success with the equipment that they need, with the working environment that they need.
Chad Pytel: And once we went remote, we also expanded. We just used to have offices in the UK and throughout the US. And once we went remote, we expanded hiring to all of the Americas and all of Europe, Middle East, and Africa. And so we’ve hired about 35 people outside of the US and UK in the last 18 months. And so that presents a lot of challenges in terms of properly onboarding. We just brought someone on who’s in Rwanda and works with clients that we have in Europe, Middle East and Africa. And getting them a computer, making sure that they’re set up, integrated well into a remote culture, making sure that’s going super successful. That’s a lot of what my day to day is now.
Chad Franzen: Sure. If you could, just take me through your process of doing that, ensuring that international remote culture works to your desires.
Chad Pytel: Well, one of the first things that we did when we started and made the decision to hire people anywhere was we had been through the process of forming entities in other countries previously. We did it in the United Kingdom and we had done it in Sweden. And I didn’t want to do that again. I felt like it was a really unsustainable approach for us at the size that we are. We might only have one person in each country and so establishing full entities. And so we tried to find partners that we could work with to be employer of record. So they establish an entity, they have an entity, but people can be full employees, not contractors. So full, good local benefits and salary and time off and everything that works the way that it should work based on where they live. Finding that was step number one. And creating a culture where people are actually members of the Thoughtbot team with the same… everything might not be the same everywhere, but it is equitable. And that was really important to us.
Chad Pytel: And so we actually have expanded faster than we originally thought we were going to in terms of international hiring. And so making sure that scales appropriately has been a big focus. And then I still haven’t cracked the problem of getting people the equipment that they need. If you’ve ever dealt with this before, you can’t ship computers internationally, they get hung up in customs, something fierce, and it can be difficult in lots of countries. We have all Apple computers, they to be expensive, they tend to be in short supply. And so getting people that equipment is tough. We usually need to find a local vendor that can supply us with the computer. And they’re doing it by somehow getting the computer locally. And then we’re often paying one and a half to two times, maybe even three times as much as the MSRP of that computer.
Chad Franzen: Who would find the computer, the potential employee and then you guys repay them or is that how it’s been working?
Chad Pytel: That’s usually how it ends up working, is that they know where they can get one locally. They’re going to a computer store in their city or something like that. And either then we’re wiring the money to that store or the person’s buying it and then we’re reimbursing them.
Chad Franzen: As somebody who’s in charge of making sure everybody’s on the same page, how do you overcome all of the time zone differences?
Chad Pytel: I mentioned that you have the team, Europe, Middle East and Africa, and then the Americas. And so we’ve organized based on time zone. So the people who live and work in Europe, Middle East, and Africa only work together on projects. And they only work with clients who are based in Europe, Middle East or Africa.
Chad Franzen: Okay.
Chad Pytel: Good time zone overlap with that. And then same thing in the Americas. We have South America, Central America and the United States and Canada. And everyone does the same thing there. So good time zone overlap with each other.
Chad Franzen: How have you enjoyed the transition from CEO to CEO?
Chad Pytel: I was ready for it. Probably more so than I realized at the time. 19 years is a long time. 18 years is a long time. And I think part of why once we made the call, I made the call, it’s one of those decisions where it just starts to feel right, it’s because I’ve done this for a long time. And it was not that I don’t love working with our customers, but I wasn’t learning anymore. I had already done everything there was to do in terms of the different kinds of sales we might make or the different kinds of problems our clients might have. And I can provide guidance and everything, but for me to be the one doing that work was just no longer as exciting for me because I had been there, done that. And I think that is the perfect opportunity to really make sure we’re training others in the organization to be able to do that, so I can focus on other things that are either bigger business needs for us or more fulfilling to me. And so I’ve really enjoyed the transition.
Chad Franzen: Good. Good. Have you implemented your own internal tools to help with operations?
Chad Pytel: Well, I have to admit, as a software developer, I have. It’s one of those things where, when we were first starting out, because we’re a design and development company, we had that tendency to build our own stuff. And we just weren’t at the scale to be able to justify that. And it was a real burden when we did it. And so we made the commitment early on after learning a few painful lessons that we don’t have special problems. We shouldn’t be building software to solve our problems. And we went from, whatever it was, 10 to 75 people with that mindset. And it served us really well. But there came a point where we started to encounter problems at our size or with the way that we were doing things internationally, that I started to say, “Well, let’s see what else is out there to help us solve this problem.” And we legitimately saw that there didn’t appear to be anything out there to help us work the way that we wanted to work or to manage our schedule the way that we actually manage our schedule.
Chad Pytel: I think you can still fall into the pitfall of saying, “Well, we do it this way and therefore we need our software to do it this way.” And a lot of companies are better served to say, “Maybe we should change our process to match the way the off the shelf software works.” But there are certain things, just in terms of the way our scheduling works, it is tied to our business, and we you’ve reached a certain scale where it makes sense. But I try to be cautious about what I build. And also know that it creates a dependency on me, when I’m building something that we use internally, I’m going to have to be the one to maintain it, or I’m going to need to hire somebody who does. And I don’t take that lightly.
Chad Franzen: You guys do have some programs that you knew that you need that can serve you and it only serves you.
Chad Pytel: Yeah. We do at this point. Yeah. And the big one is a scheduling system that integrates with our CRM. We use an off the shelf CRM, but we use the API provided by that CRM. And it’s a database of everybody at the company and all the skills that they have, for example. So when a salesperson is working on an opportunity, they can instantly see all of the people who are available because they have their project ending, who have the skills that project would need. And I’ve just not quite found something that does that in the way that we want to do things.
Chad Franzen: That’s the benefit of being a software developer, huh?
Chad Pytel: Yes. It’s the benefit and the curse.
Chad Franzen: Yeah. Yeah. Hey, I have one more question for you, but first, how can people find out more about Thoughtbot?
Chad Pytel: Oh, they could go to Thoughtbot.com T-H-O-U-G-H-T-B-O-T.com.
Chad Franzen: Hey, last question for you. What piece of advice would you give somebody who’s transitioning from a CEO role to a COO role? Maybe a surprise that you came up like, “Oh, I didn’t think I was going to run into that.” Or something like that. What kind of advice would you have for somebody?
Chad Pytel: Well, one thing that I did anticipate, but it still has been a challenge, is that, especially as founder, as someone who had been with the company for so long, was seen as the position of ultimate authority, really making the transition to the new role and establishing Diana, who’s the CEO now, as the one who is now in that position of authority, I think has taken extra special care to make sure that goes well, that people understand that’s the transitioning that’s happening and we really mean it. And that means there are times where I need to take a step back and not contribute to a conversation or a decision that’s being made. Or maybe do so behind the scenes so that we’re establishing and I’m giving Diana the ability to come into her own in the role.
Chad Franzen: How much of adjustment is that for you? Was that like muscle memory or is that something that you could tell yourself not to do right away?
Chad Pytel: If I’m honest, I think it was something I needed to be very careful about. It was a natural reaction to be the one to respond or to be on a meeting. Because we’re still on lots of meetings together. To be in a meeting and to be expecting that I’m the one who needs to answer that question and realize, no, I just need to stay on mute right now and let somebody else answer.
Chad Franzen: Hey Chad, it’s been great to talk to you. I really appreciate your time and your insights. Thank you so much.
Chad Pytel: Thank you very much. I really appreciate it.
Chad Franzen: So long everybody.
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