HoldCo CEO vs Regular CEO

HoldCo CEO vs regular CEO

They’re really different – much more than you think.

What to know before you own more than one business:

— Michael Girdley (@girdley) June 27, 2023

There’s a mystique around HoldCo CEOs like Warren Buffett.

Lives simply, McDonald’s every morning, then reads in his office.

But most HoldCo CEOs are extremely busy.

Just as busy as running an operating company.

But the day to day is fundamentally different.

— Michael Girdley (@girdley) June 27, 2023

A normal CEO spends their time:

- Building/managing a staff
- Implementing systems
- Selling customers or raising money
- Getting your hands dirty solving the big problems

— Michael Girdley (@girdley) June 27, 2023

A HoldCo CEO spends time on:

- M&A / growth / deal flow
- Asset and capital allocation
- Supervising/coaching from a distance
- Thinking about systems and incentives

— Michael Girdley (@girdley) June 27, 2023

* Mindset

I think of it as the allocator mindset vs the operator mindset.

An operator CEO is the “person in the arena”.

An allocator has to be comfortable sitting in the stands, only occasionally getting involved.

Instead, you’re deep in the weeds analyzing opportunities.

— Michael Girdley (@girdley) June 27, 2023

Allocators and operators can both succeed with HoldCos, just different types.

Allocator CEOs are more like Warren Buffett, holding disparate, disconnected investments.

An operator CEO is probably best suited to a rollup model.

Everybody gravitates towards one or the other.

— Michael Girdley (@girdley) June 27, 2023

Sometimes you’ll have to do both.

I’ve had to roll up my sleeves and run a turnaround.

If you don’t want to do any operating, you should go work for a mutual fund.

If you want to keep your hands in the details, you should just start 1 business.

Don’t get too black and white.

— Michael Girdley (@girdley) June 27, 2023

* Supervising vs Operating

A HoldCo CEO gives operators lots of autonomy.

That means great hiring is critical, but so is support.

One on ones, board meetings, culture building, etc.

Make sure your people are making great decisions.

But they make sure things are getting done.

— Michael Girdley (@girdley) June 27, 2023

* Laying Groundwork

Above the day to day, your ongoing job is to maximize profits.

There’s allocating capital, and there’s building future deal flow.

HoldCo CEOs are often very community involved, or doing content and branding — investing in your next opportunities.

— Michael Girdley (@girdley) June 27, 2023

Let’s go back to Warren Buffett.

His persona is very calculated. Berkshire Hathaway does a lot of promotional stuff.

Plus their annual meeting is basically Woodstock for capitalism.

That all adds up to serious deal flow and a brand sellers want to join.

The schtick is genius.

— Michael Girdley (@girdley) June 27, 2023

To recap — a HoldCo CEO is:

- More allocator than operator
- Empowering the decision makers, not making the decisions
- Playing the long game, not the day to day

Not for everybody.

And a radically different lifestyle from an OpCo CEO.

But it’s definitely the best fit for me.

— Michael Girdley (@girdley) June 27, 2023

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— Michael Girdley (@girdley) June 27, 2023