If you’re a start-up or scale-up founder reading this, then you’ll likely have a basic knowledge of the COO role and the part it plays within a growing business; traditionally seen as the founders’ ‘right-hand person’.
However, in today’s market, they are so much more than that and you are putting yourself and your business at a disadvantage by not exploring the full capacity and potential of the growth-focused COO role.
As start-ups have evolved, so have the leadership roles within them. We’re seeing the rise of the growth-focused COO within earlier-stage businesses to support the founder, draw the boundary lines to block out activities that will steer the business away from the north star, as well as deliver new growth opportunities and global expansion success.
This article outlines the need-to-know elements of the growth-focused COO role that is continuing to build in popularity across start-up and scale-up communities, as well as what experience and expectations founders should hire for.
The COO positions that we see businesses hiring typically fall into three groups:
In group one: the traditional COO who has usually come up through the finance channel and moved into operations. They tend to oversee finance, HR, compliance, internal and approval processes, and assist in decision making. These roles are still critical, especially in highly regulated businesses like fintechs.
In group two: a COO to run the business through and through. These roles are typically more CEO-like in nature as the majority of the business normally reports to them. However, the founder has retained the CEO role as they are steering the ship from a vision point of view, often whilst staying close to functions they are passionate about such as product or engineering.
In group three (which we are going to expand on): the growth-focused COO role. This is someone that has usually come from a background where they have had some sort of impact or ownership on top-line revenue.
This changes from company to company but includes; Strategy, Product and Sales or Marketing. This means they are normally close to the product, engineering and revenue functions of the business, and most importantly clued into how these elements intertwine to create growth. They have a view of how to go-to-market and how a business can rev its engine to deliver and execute strategy.
The real advantage of hiring this type of COO is to take a significant burden off the founder. The founder has limited headspace and time and as the business grows they need to spend more time on things such as; vision, strategy, board, capital raising and key relationships. A growth-focused COO can take the day-to-day reins of growing the business off the founder and effectively harness data and analytics to drive more evidence-based decisions throughout the organisation.
-What are the next key markets we should expand into?
-What is the growth opportunity for our current product set?
-How will we hit profitability this year?
As the ecosystem matures, founders, boards and investors understand that the earlier you can operationalise a business and get the engine humming, the better the results. Many start-ups fail due to indigestion and the right COO can prevent this from happening.
Mature and seasoned founders are aware that they need operations principles, as well as an excellent leader in place ahead of executing a growth strategy. As funding rounds have grown, so too have the expectations placed on founders so a seasoned pair of hands that can help you navigate A to B is imperative. This is a critical hire that has “been there and done it” and wants to “do it all over again”.
Let’s also add into the conversation that as COO roles have evolved, so too have CFO and Chief People Officers within scale-ups, which is partially the cause for the COO role pivoting more towards growth and everything that encompasses. For example, CFOs have become more outward facing and driving the commercial strategy of a business. Chief People Officers on the other hand are often taking on a broader remit, taking on general management responsibilities of a team, product line, or a specific project.
An experienced COO can act as that much-needed scar tissue when expanding to a new market and location. They will do due diligence, assess the competition, look at risks and opportunities before heading into a new market and make sure that the decisions that are made will be successful.
For example, which products should be released first, how to put the first boots on the ground and which roles they need to be? Essentially, the COO will bring the expansion to life and make it happen.
If you want to find out more about how we can help you hire a COO or any leadership role, drop me an email (email@example.com), book a free call with me here or connect with me on LinkedIn and I’ll be happy to chat with you.
You can also check out our Executive Search service.
*Reference from 22/23 Australian Start-Up Salary Guide
ARTICLE by Dan Spencer, Partner, 1 April 2023