Article from Forbes on how to hire your first COO and if a Fractional COO is right for you.
The right time to hire a chief operating officer (COO) is just before trouble appears in your company. The reality is that most businesses realize they need a COO too late.
Signs that you need a COO:
• You are spending too much time working in your business and not on your business.
• 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. They seldom have the required knowledge, skills, or experience to make the leap.
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 you are 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 most valuable player! 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 change success.
Your COO is your closest partner, coach, and mentor. The COO is trusted to seamlessly run your company when you are not there. They may even be your successor in the future. 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 three mistakes when they need a COO:
Mistake #1. Instead of hiring the C-suite executive they need, they seek a director or vice president of operations. This 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 normally cannot.
Mistake #2. 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 #3. 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. Two, 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 significantly struggle.
Consider A Fractional COO
If you cannot afford the likes of what your company needs, then 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 who is willing to work in a temporary capacity, part-time, for an hourly rate 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.
Benefits:
• Typically, a fractional COO works remotely with your company. This saves 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 letting a contract employee go is relatively easy.
When it comes to hiring your first COO, do not wait. However, consider whether a fractional COO is right for your business.
Written by John Knotts, Forbes Councils Member
