Why Startups Love Hiring COOs
Hint: They lay the foundation for growth
Among the C-level positions, the COO might be among the most nebulous and difficult to outline, however it is also one of the most crucial. Especially for a startup with a small but rapidly growing team. So what exactly is a COO?
The ‘Chief Operations Officer’ is responsible for just that, the operational efficiency of the entirety of the company. While the CEO is responsible for the overall direction and goalsetting of the company (and in the startup world he tends to own a lot of it as well). The CFO, on the other hand, is responsible for the financial health of the company and making sure that the CEO’s vision can be realized.
So with the CEO and the CFO one is responsible for vision, the other means (well, ideally anyway). This is where the COO comes into play. He is responsible for creating the processes, overseeing the operations and managing the team in order to help the company reach its goals. He might decide what kind of KPIs to use or what kind of metrics the team is going to be using to measure progress, be they Objectives and Key Results (OKRs) or some other system.
These are some of his higher level responsibilities, but on a day to day basis he might be responsible for making sure the OKRs are followed, that major milestones are being reached in a timely manner, and generally making sure the company is on course to realizing the CEO’s vision.
The COO is crucial to an early stage start up
The role of the COO in a larger company is very clearcut. The CEO just can’t be involved in the outlining of daily processes because, well, there is usually (but not always) just one of him and he can only do so much.
But with a small team it shouldn’t be too hard, right? Wrong. The role of the COO in an early stage startup is naturally even more diverse than it would be at a larger, more established corporation.
He is laying the foundation on which the company is going to be built. He is designing processes that will have to be able to be scaled effectively with growth. These processes can’t just be stop-gap measures that help you get from A to B. They need to be able to support the company’s journey from A to Z and be able to withstand the inevitable restarts and backtracking.
The ability to build and manage such systems comes from experience. If the CEO doesn’t have this experience, it is going to be very difficult to just improvise.
The COO at a startup also often acts as the right hand of the CEO. He might do all kinds of things that the CEO would have had to or wanted to do on his own but just doesn’t have the time for. These kind of tasks, whatever they may be, are often delegated to the COO. In this capacity the COO is something of a free safety.
The COO in practice
Jean-Philippe Godard, a graduate of IESEG school of management, came from a consulting background and 10 years of experience in management consulting in the United States, Switzerland, France, and, most recently, Hong Kong where he launched and managed a consulting firm over 5 years.
“I really liked what I was doing in Hong Kong but, to be honest, after 10 years helping CEOs and COOs improve their processes and manage their companies, it was time for me to finally listen to my gut and be a part of building a startup.”
Jean-Philippe has been exceptionally busy at Homeloop over the past couple of months as the team has swelled from three to eight and is now expecting to grow to ten shortly. And with this growth the importance of his job has been increased substantially.
“I worked as a kind of right arm of the CEO at first, but as we have grown my focus has shifted more to building processes to ensure the scalability of our business and to developing a solid and cohesive team,” he says.
This last one is one especially important to him. “Coming from a military high school and playing Rugby I attach great importance to team cohesion and the development of a strong corporate culture”
“I know that a cohesive team is our greatest asset in the development of a great company and will help us face new challenges and competitors! We want people to be happy and proud to be Homeloopers, proud of our mission, proud of their work.”
Evolving company, evolving position
“Like most positions at a startup, mine is more fluid right now than it will be next year.” he says, “With a team of eight my job often involves helping to relieve the CEO of certain duties that may be distracting him from more strategic things. However, after a year of expansion I will be filling a more traditional COO position,” he says.
As the company grows and as he helps guide the team culture and build strong, established and scalable processes, he is also trying to avoid falling prey to reactive management. Reactive management is the vicious cycle of constantly responding to problems or other impetus rather than being able to plan in advance and proactively decide the course of the business.
“Reactive management is something that we are really working to avoid, and I think that the best way to avoid it is by implementing a strong data-driven culture backed by the right tools and a high level of automation” Jean-Philippe says.
As a small company the threat of reactive management is greater and the potential damage it can do is far higher.
Master and Commander
Jean-Philippe compares the COO role with the Main Trimmer to the CEO’s Skipper . “The CEO is the captain, he tells us where he wants the company to be and when. I take this destination, and figure out what has to happen day to day, week to week, month to month and adjust the sails to get us there. In doing so I help to steer the company around potential points of failure,” he says.
“There are a lot of potential obstacles that can come up on any given day,” says Jean-Philippe “so we need to be able to react to them or, better, predict where we will meet them and totally avoid them.”
Of the major C-Level positions, the COO is among the most hands on. At a startup, especially in the early stages, there’s always something to optimize, something to fix, and something to change and improve upon. It’s really important for the COO to have a clear understanding of the role, position and responsibilities of all the team members.
From its very first hire a startup begins creating a culture and its main processes, intentionally or unintentionally, that will form the foundation of the the business that the startup will eventually become.
With a COO, that foundation can be laid properly and with care.
Le Studio VC is a Paris-based startup studio. Providing seed capital, expertise, and guidance, Le Studio acts as a launchpad for startups. By both investing and participating in the initial stages of development, success is more likely and more rapid.
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