Why, When and How to Secure a COO
By Jennifer Diamant Foulon, Organizational Development Coach
Hiring a Chief Operating Officer is a recurring focus as startups lay the groundwork for scale. Since most early stage CEOs oversee and facilitate the administration, finance and talent acquisition of their growing companies, the decision to create a COO role requires a readiness to delegate these responsibilities to someone else.
I’ve worked with Founders, CEOs, COOs and external experts in 2022 to gather data about the COO role, and how to find and promote people that can ensure smooth internal operations and increase your business intelligence. Read on to hear their valuable lessons learned and recommendations.
What exactly is the job of a COO?
Founders and CEOs refer to the Chief Operating Office as “the backbone,” “the Scale Master”, and “Richie Sambora to my Bon Jovi.” And yet no two COO roles are the same. The four CEOs quoted in this Inc.com piece describe four very different kinds of people.
Business schools teach that the COO role is about culture, strategy and change — a highly appealing description which results in approximately 20 percent of EMBA students listing startup or scaleup COO as a career goal. But what the role actually consists of depends a lot on the maturity of the business.
Early stage COOs admit that their job is a bit of everything that needs to be done. From finding an office, to choosing a CRM, to setting up accounts payable, to interacting with recruitment agencies — the COO role addresses administrative needs across the business to ensure operational flow. The job effectively changes once commercial activities are well underway.
It’s the range of skills needed and the promise of helping to shape a growing business that draws ambitious business people to the COO role in a startup. Scott Orn, a COO himself at Kruze Consulting, reminds us that the COO has to be the chief enabler to the CEO.
“Be the bassist to the CEO’s lead singer,” he recommends. His youtube video is an excellent introduction for anyone considering becoming or hiring a COO.
When should you hire a COO?
There is no critical MRR, ARR, or Series A marker that says hire a COO now. One thing is certain, however. Given the time it takes to screen and find a good COO fit, hiring sooner rather than later is wise.
“Admitting that there is enough work to delegate administration topics to someone who is more skilled can be hard. Most Founders and CEOs that come to me to recruit a COO should have done so months earlier,” shares Peer Goudsmit, an experienced talent acquisition consultant based in Amsterdam.
Hiring a COO is ideally a proactive decision and something that is part of personnel strategy. “A strong COO will enable the CEO to spend more time facing outwards, evangelizing and expanding the vision, and ensuring commercial opportunity and success,” shares the often-quoted Jeremy Bromberg in a Medium article by Victor Sabo.
Jurjen Van Rees, Chief Commercial Officer and Co-founder at Rheocube in Amsterdam, feels that the key marker is sales activity. “Get your sales engine up and running first. As revenue becomes more predictable, you need to design and start looking for your COO. You may soon be drowning in commercial activities and even fundraising when that hockey stick growth hits.”
And yet, the decision to hire a COO is often a reactive one, resulting from growing pains that can exhaust functional leads and leadership team members. When I see heads of product, development and sales spending a huge amount of time in meetings talking about administrative topics that nobody seems to own, it is time to delegate them. Biz Journal points to a few symptoms that spell the need for a COO. I would add the following:
- Founders without experience in business administration or finance
- Feeling overwhelmed by due diligence, reporting or tax topics
- Tension in board or leadership team meetings around the administrative workload
- Regrettable departures (unwanted attrition) due to unaddressed back office workload
Hiring versus “growing” your COO
When speaking with startup teams, I found out that not everyone wants to shop for an experienced COO to bring aboard.
“We needed to grow our COO,” says Jaime Jorge, Co-founder and CEO of Codacy, referring to Joao Rosario, who joined Codacy as Head of Finance before he was promoted to COO in early 2022.
Joao’s background is in Finance, Strategic Planning and Strategy. “Codacy has doubled its business since 2020,” he shared. “My team and I have to provide each functional area with consumable bites of data and insights that can help them achieve their goals.”
Growing a COO or Ops Lead resonates with a lot of Founders. Many prefer to start with a Director of Operations, while hiring external Finance or Sales Ops experts on a part-time basis to create processes that are needed.
Jaime also refers to the important partnership and synergy needed between CEO and COO.
“I needed to grow into the kind of CEO that can work with a strategic COO. I may have slowed my company’s growth by not surrounding myself with the right people at the right time,” he admits.
Designing your COO role to fit your business
While finding a COO job description on a website can be a start, it is essential to design a role that provides relief, insights and can contribute to culture and organizational strategy. If you need help, a good headhunter or consultant can conduct internal interviews to help you understand what kind of COO will be most effective for your growing business.
Here’s a sample list of potential COO skills, experience and behaviors:
Where to find your COO
You would be surprised at the candidates that apply for a startup or scaleup COO role — it’s a lot fewer than you might expect.
“Only 10 percent of the candidates needed for COO job specs are active candidates, responding to job postings,” shares Peer. “90 percent of the people you want are passive candidates, currently working elsewhere. They need to be convinced to come and see what your company is doing to see if they can get excited about it.”
Headhunters agree that startup COO talent can be hiding in medium-to-large decentralized companies, among people that have experience across sales, business intelligence and product functions.
It took Peer some time to find Roxane Hentz, the recently hired Director of Operations at Rheocube in Amsterdam. Roxane brings 20 years of experience in sales, operations, IT solutions and strategic projects across EMEA to the Rheocube team. This is her first startup role.
“If you’re thinking of joining a scaleup, you need to be prepared to demonstrate resilience, persistence, and the ability to adapt to anything coming your way,” Roxane shares. “There is a lot of self-learning and self-doing. Your main goal is readiness to scale. And readiness is about people as much as it is about process, metrics or finances. As such, communication towards the team is at the core of this role.”
Avoid these potential pitfalls
Knowing all the valuable perspectives above, we should also look at the potential challenges associated with hiring a COO. Here are a few suggestions I’ve gathered in my research:
Design first, then look both inward and outward. Design your role first, then look at internal and external candidates — both people you know and don’t know. You need specific business skills for a COO. Resist the quick hire of an old friend and be sure to screen for the skills your business needs.
Don’t forget to set a place at the table. When you do find the right person, know that their success might be dependent on the leadership team’s ability to let someone into the inner circle who wasn’t part of the original vision or founding of the business. The COO will need full access to cross-functional information.
Put all hands on deck to onboard your COO. The onboarding process for an externally hired Ops Lead or COO is cruelly underestimated. While skills in finance, sales ops and administration can bring fast relief, it can take months before someone can navigate the existing culture and add value to the different functional areas. Every single functional lead and member of the team will need to provide input and participate in this person’s learning curve.
Whether proactive or reactive, the design, search and onboarding of your Chief Operating Officer or Director or Operations can bring critical focus, analytics and support to your growing business. Don’t underestimate how much your business will benefit from operational expertise, and don’t wait to hire or grow your COO.
Want more perspectives from Jennifer? Connect with her on LinkedIn.
