The Abridged Guide to Hiring a Chief Operating Officer

top considerations for ceos and business owners seeking a second-in-command

You have an ambitious vision for your company. The question is: How will you turn that vision into reality?  
 
Hiring a strong Chief Operating Officer is your answer. This second-in-command, also commonly referred to as a President, General Manager, Integrator, etc. will help translate your vision into an action plan for success. Set ambitious but achievable quarterly goals. Hold your people accountable to results. Run the day-to-day aspects of the business.
 
There is a delicate balance between hiring a COO and recruiting and retaining the right leader to act as the glue of your operations. Rushing or mismanaging the hiring process can lead to hiring the wrong individual. The cost of a bad hire affects more than the financial bottom line. These individuals can negatively impact employee morale, productivity, and performance. This guide will help you in mapping out a hiring plan that will yield results.
The Abridged Guide to Hiring a COO
 

Five Signs it is Time to Hire a Chief Operating Officer

icons8-people-50 (1)  People Issues Are Present

icons8-account-50 (1) Growth Has Stopped or Slowed

icons8-schedule-50 (2) Time is Limited

icons8-error-50 Lack of Execution

icons8-decrease-50 Profits are Down


Are you considering hiring a COO, but not quite sure that you are ready to bring on a second-in-command just yet? Here are five signs that you may be in need of a Chief Operating Officer:

1. Time is Scarce

As a CEO, when you have too much on your plate you may find it hard to delegate, meet expectations, and maintain balance in your personal life. In addition, if we consider ones Unique Ability® there will be things that a CEO/ business owner either does not want to do, or is not good at. This is where a COO with opposing strengths comes in. Hiring a Chief Operating Officer will allow a CEO to focus on the areas of the business that bring them the most enjoyment, such as new growth initiatives. Conversely, the COO can manage the people, processes, and procedures in the business. In emerging growth industries, such as the cannabis industry, a CEO who does not have a COO may begin to start feeling like a babysitter. 

2. Delegation

Delegation may be a difficult task for the CEO who does not have a second-in-command as they typically struggle with handing off important business initiatives and priorities to their team. Too many high-level tasks will begin to burn out the CEO who lacks a Chief Operating Officer, and in turn, the CEO will spend more time 'in' rather than 'on' the business. 

3. Meeting Expectations

When a CEO is spending more time 'in,' rather than 'on' the business they may begin to underdeliver on expectations from various investors, customers, and staff. When this happens, the CEO may feel immense pressure to meet the expectations of these individuals. Most often, once this takes place the only thing for the CEO to do is to spend more hours working in, as well as on the business.

4. Balance

Like the 'domino effect,' time is constant and the only way to gain time for one area is to eliminate it from another area. Unfortunately, more than likely a CEO who is facing time management issues will pull time away from their personal life. 

5. Profits are Down

Is your revenue steadily decreasing and you cannot seem to narrow in on the cause? A strong Chief Operating Officer will be able to pinpoint profit loss and initiate a plan to turn it around.

For more information, please review:

Three Traits to Seek in a Chief Operating Officer

In this video, we detail three key characteristics of high-performing Chief Operating Officers. Learn more about the following traits we have identified: Humble confidence, quiet passion, and goal orientation & discipline here:

  1. Humble Confidence: Your Chief Operating Officer needs to be both comfortable and confident while engaging with customers, employees, and other stakeholders. 
  2. Quiet Passion: You should seek a COO that has a hunger for the business the way you do, all while approaching it in a manner that does not draw too much attention to themselves. This passion should be contagious and focused on the business.
  3. Goal Orientation and Discipline: Your COO needs to buy into your vision and should be committed to executing the business plan.

See the full list of top qualities to seek in a Chief Operating Officer here.

 

3 Important Traits of a Chief Operating Officer

Recruiting a Chief Operating Officer

Many small and medium-sized enterprises (SME) question whether or not they should partner with an executive search firm, or use their in-house team to recruit for the COO role. Here are a few things keep in mind when faced with this consideration:

Cost

Keep in mind that the upfront cost of engaging with an executive search firm will always cost your organization more than it would if you used your in-house team. However, not all search firms are alike - some agencies will charge a percentage of first-year's salary for the new hire, while others, like us at Kaplan Executive Search will charge a fixed-fee.

The biggest cost to your organization will not be the fee of the search firm, but rather the fee associated with making a wrong hire. In fact, you should expect to see this cost made up in the first one to two years when the right operations leader is hired. 

Expertise

While your in-house recruiters will be experts in your organization, they are typically not specialist in recruiting for a specific function, such as the COO. In addition, is your internal team prepared for the hiring process that is involved with such an important hire? Here are a few areas to consider in your COO recruitment process:

  1. Crafting a compelling COO job description
  2. Creating an in-depth research and recruitment plan for hiring your COO
  3. Preparing a structured interview process
  4. Conducting thorough reference checks on your final candidate(s)
Chief Operating Officer Guide for Hiring

Reach

  1. Tools: An executive search requires extensive research and sourcing. These efforts will involve a number of tools and techniques. Often times, in-house recruitment teams do not have access or experience with the tools used in executive search firms.
  2. Network: Executive Search Consultants are known for building a strong network. These individuals rely heavily on their network during each search to source out referral sources, as well as candidates. This is not to say that an in-house recruiter will not have a vast network. However, one thing to keep in mind is that most recruiters are people-focused, where executive search consultants are sales-focused. This differentiation makes a big difference in how one builds and manages their network.
  3. Engaging Passive Candidates: It may take 300 or more applicants to yield 2-3 highly qualified candidates, most of which will be passive candidates. Executive search firms specialize in outreach methods to engage passive candidates, also known as top performers that are not looking for another opportunity. Does your in-house recruiter have the capacity to build and maintain this number of candidates all while delivering an exceptional candidate experience?
  4. Competitors: Frequently, we speak with CEOs who are interested in recruiting talent from their competitors, however, they are not compelled to "poach" the talent themselves.
  5. Rich Database: By partnering with an executive search firm that specializes in a specific function, such as the Chief Operating Officer, your search is given access to a deep database of candidates. Executive recruiters have access to a stronger talent pool built through networks and relationships rather than relying on a pool of applicants that is made up of those scanning job boards.

Here are some additional things to consider when hiring an executive search firm. Check out the complete list of in-house recruitment considerations here.

Executive Search: Retained Vs Contingent Search Firms

If it has been determined that you are going to partner with an executive search firm to hire your next COO, you may now be questioning whether you should work with a retained or a contingent search firm. In this video, we detail the difference between the two different types of firms.

Retained

Retained searches are exclusive, and most often used for higher level searches. A retained model allows the search consultant to spend more time understanding the client business and needs. These searches are typically charged on a flat fee basis or a percentage of first year's salary for the new hire.

Contingent

Contingent searches allow the client to work with multiple recruiting agencies. These searches are very competitive as there is more pressure to present a candidate sooner, rather than later. Contingent searches are best suited for lower level positions. 

08 - What is the Difference between Retained Executive Search and Contingent Firms
Checklist for Hiring a COO Search Firm

Checklist for Hiring an Executive Search Firm

Ready to partner with an executive search firm to hire a COO? If so, here is a list of must-knows when engaging with an executive search firm. Use this list to ensure you are hiring the right executive search firm for your business needs.
Download