Need to Scale your Company? Try a COO.
By Erwan Menard
In 2014, I joined a start-up called Scality that had just 20 customers, 40 employees, and was focused on one specific market segment serving one type of customer: telecom service providers. In four years, we worked together to scale the company to 220 employees serving more than 200 enterprise customers worldwide. We became recognized by analysts as a world-class industry leader in our field of cloud and object storage, successfully challenging established competitors like IBM and Dell EMC.
But my pivotal role in scaling the company was not as the CEO, chief financial officer, or even the executive vice president of sales. I was the one executive you often don’t hear much about, particularly in the start-up space: chief operating officer.
The COO’s role is to get all the parts of a company aligned to execute well as a team. I think of it like the maestro of an orchestra. And if some instrument sections need more attention or help, you give it to them, helping the whole orchestra to sustain its performance.
Some of the work I did at Scality included structuring our go-to-market strategy and team, followed by leading a year-long major transformation of R&D. I was also very committed to sponsoring culture initiatives to ensure our mission statement was embodied in action. For example, we revamped our approach to candidate interviewing and trained our people to use it. We coordinated the setting and open sharing of corporate priorities, and assessed progress toward them every four months.
I came on board to help the founder-CEO take his company to the next level. Together with his co-founders, he had built a lean and productive foundation, powered by a strong vision and product strategy. But it was time to broaden Scality’s reach across enterprise markets, balancing its European roots with a sharpened focus on U.S. customers. It was also imperative to ensure that every part of the organization was scaling up and keeping pace with the company’s needs. Executing on that was my mandate.
Since June 2018, I’ve been the CEO of Elastifile, which helps enterprises store application data in the cloud, augmenting the capabilities of AWS, Google Cloud, and Azure. We’ve just entered our growth phase. But it begs the question: Why would someone who’s now a CEO be writing about the value of a COO to a growing company? Besides knowing from experience what makes for a good COO, I also recognize firsthand when to hire one and how to do it right.
If you’re a founder-CEO and feel like you don’t have enough time, energy, or skills to pay attention to every part of the company, consider getting help. You can determine if a COO is right for you by asking yourself three questions:
- Am I on the critical path of everything at this company? Because if you are, at some point, you will be the limiting factor.
- What am I good at as CEO — is it establishing vision, managing investor relationships, and spending time with important customers? None of these are execution-related. Execution includes synchronizing product roadmap decisions with (typically diverging) market demand signals, hiring and onboarding, coordinating how sales works with professional services to wow your customers, or implementing IT infrastructure.
- Can I partner with someone? Foresee yourself at the gym or having coffee, showing your vulnerabilities, lowering your guard, and voicing your doubts with someone you can really trust.
If you honestly answered yes to all three, start meeting people and eventually you will find someone you feel a strong connection with.
Partnership with the CEO is crucial to being an effective COO. It’s two people sitting down, looking at their strengths and weaknesses, and combining them into a more potent force. In fact, it is probably the principal factor that defines the role. Harvard Business Review has noted that while other executives’ jobs are structured by the work to be done, the COO’s job is defined in relation to the individual CEO.
“This makes asking the question ‘What makes a great COO?’ akin to asking, ‘What makes a great candidate for U.S. vice president?’ A Southern Baptist? A foreign-policy wonk? A charismatic campaigner? A centrist?” Nathan Bennett and Stephen A. Miles wrote in 2006. “It all depends on the other half of the equation, the first name on the ticket. This, then, is why COOs remain mysterious as a class: The role is structurally, strategically, socially, and politically unique — and extraordinarily situational.”
Being a COO is not for everyone. When you talk about a boat, you talk about the captain, right? Do you talk about the second-in-command? Almost never. There’s a lot of anonymity that comes with the role. It’s really about getting the job done, and understanding that you’re not the captain of the vessel. But getting the job done is a magnificent and vital role. If you are fulfilled by achievement like I am, you can be very happy as a COO. But if you are looking for fame and glory, it’s probably not the best fit.
And not every company at growth stage must have a COO. Unlike, say, a financial officer, which is pretty impossible to do without, a COO is not mandatory. Help can take many forms. First and foremost, it depends of the profile of the founder-CEO. Some founder-CEOs have the energy, passion, and vision for a company but need help to execute. Others don’t. But it also depends on the time you have to accomplish your scale-up. It’s a lot of work for just one person to lead execution, particularly if you’re growing fast.
While I don’t have stats to back this up, my anecdotal experience with one foot in the French Tech ecosystem is that the idea of a COO — of getting help — might not be as straightforward a conversation worldwide. What one sees fairly often in the U.S. is, at some point, either bringing in a COO to help the founder-CEO or letting the founder go and hiring a professional CEO.
As a leader, it’s hard to be relevant at every stage of a business. Not everybody is a Jeff Bezos. (But even Bezos was not immune to needing an executive to oversee operations; while not a COO per se, Marc Onetto was well-known as Amazon’s senior vice president of worldwide operations and customer service from 2006 to 2013.) Sometimes companies need different types of leadership at different stages. And if that means a change, a COO is a valid option to augment the capabilities of the founder-CEO while not angling for a new CEO altogether.
It depends on the context, the skills in place, on the leadership capabilities of the players — there is no recipe. But the topic is not taboo here in the U.S. It’s about getting the job done.
It’s also important to note what the COO should not be. At some companies, all of the administrative-type functions that the CEO doesn’t want to be bothered with — which typically might include HR, legal, and IT — are simply boxed up and put aside for the COO to manage. This kind of approach can be toxic. It sends the wrong signal; I wouldn’t want to work at a company where people operations are deemed merely an administrative function. The COO is about being the right arm of the founder-CEO and helping to scale the entire company.
The best idea is irrelevant if you don’t execute well. You spend too much money, you waste time, you make the wrong choices in hiring, and suddenly your great idea and the expected differentiation vanishes very quickly. While start-ups may secure their initial round of funding on market opportunity and a spark of genius, later rounds are contingent on the company’s ability to demonstrate that it can get the job done. When you have an opportunity in front of you, don’t be afraid to bring the right help on board — or aspire to be that help — to execute it.
Erwan Menard is the CEO of Elastifile, based in Silicon Valley with R&D in Israel, and was previously the president and COO at Scality. He is also an ambassador for French Tech San Francisco and a mentor for The Refiners, a seed fund program for entrepreneurs. Follow him on LinkedIn and watch his 2015 keynote at La French Touch Conference.