The right time to hire a chief operating officer (COO) is just before trouble appears in your company. But, unfortunately, the reality is that most businesses realize they need a COO too late.
Signs that you need a COO:
- You spend too much time working in your business and not on your business.
- You find yourself stopping business growth activities to maintain your everyday.
- You are feeling constantly overwhelmed and struggling daily in your company.
- You know you need to strengthen and solidify your leadership team.
- Your company needs to grow significantly in scale operations.
A COO — especially your first one — should come from outside your company. Insiders are typically part of the problems you are facing. However, they lack the perspective, required knowledge, skills, or experience to view your company objectively and with checked emotions.
The COO Position
A COO is quite different than any other employee in your company.
Typically, the leader of a company is a visionary. As the visionary, you operate best when thinking long-term, generating big ideas, fanning a fabulous culture, and cultivating strategic relationships. Without a COO, you become mired in the day-to-day operations, which can cause your business to stagnate, wither and eventually die.
A COO is your team’s number 2, your MVP! As your integrator and executor, the COO brings your entire company together to deliver products and services effectively and efficiently.
The COO is the quintessential “change champion.” They define needed changes, lead the change effort, manage the change and even celebrate the success of the change.
Your COO is your closest partner, coach, and mentor. The COO is trusted to run your company when you are not there. They have the ability to take your vision and execute it to an extent unimagined. As a coach and mentor, your COO not only supports your personal and professional business development but that of the entire company.
Your First COO
When you need a COO, you are looking for someone typically with years of experience and education — much more than most companies can afford for their first COO.
A COO is much more than a highly paid operations manager. However, companies typically make one or all of these four mistakes when they need a COO:
Mistake #1. Possibly the most egregious mistake is they hire the COO last. Instead, the companies prioritize the CMO, CTO, VP of Sales before hiring their COO, causing an effect that leads to dysfunctional and siloed organizations without a clear vision and priority.
Mistake #2. Instead of hiring the C-suite executive they need, they seek a director or vice president of operations. This choice saves them an executive salary, benefits, bonuses, and perks. People hired in this role are expected to operate at the position of a COO without the title but usually cannot.
Mistake #3. They lowball the salary of their new COO position. This forces them to hire someone capable of being a director or vice president of operations but who will fail to meet the expectations of a COO.
Mistake #4. The company treats the COO position as if it were any other position within the company. Thus, the hiring process, benefits, bonuses, and perks all mirror those of most other employees.
The reason companies make these mistakes are because of two things. One, they cannot afford the true talent they need. They do not understand the inherent differences between this position and every other position in their company.
The first COO is one of the most critical positions to get right. Hiring the wrong COO can cause your company to struggle significantly.
Consider A Fractional COO
If you cannot afford what your company needs, how do you move forward? You cannot keep struggling in your visionary role while being the full-time integrator.
A fractional COO is a business professional with many years of experience willing to work in a temporary capacity, part-time. That would typically amount to the same as hiring someone full-time. However, you can bring on talent with experience as a business owner, business coach/consultant, or former full-time COO without all the costs. Fractional COOs might get paid the same as a full-time COO, but they bring to your company much more. Plus, there are many other benefits to contracting with a fractional COO.
- A fractional COO will take a company through a process that produces the tools to answer the essential questions of how can we grow?
- A fractional COO works in a hybrid model, saving you from creating a separate executive office.
- Fractional COOs do not require an elaborate executive hiring process — thus, you do not have to build separate HR processes for just one position.
- Being a contract employee, the fractional COO does not require executive benefits, bonuses, or perks.
- A fractional COO creates a try-it-before-you-buy-it experience, allowing you to kick the tires and determine what you need from a full-time COO.
- The fractional COO is there to work themselves out of a job — they focus on building your company so you can truly afford a full-time COO in the future, and they can even help you find and hire their replacement.
- If the fractional COO does not work out, let them go — firing an executive can be a grueling situation fraught with cost and legal dangers, but allowing a contract employee to go is relatively easy.
If you take anything from this blog, invest in a COO if you want to grow your business, produce franchises, make a sellable business, or achieve whatever goal you have. They’re your partner who specializes in making your dream come true.
If you want to discuss if your business is ready for a COO, click the link and sign up for a one-hour strategy consultation. Remember, the best time to change was yesterday, so you better make the change today.