Second in Command? The role of the COO in startups
Last week I had the privilege of chatting to David Ferguson, COO at Trustpilot, and a group of entrepreneurs in Copenhagen about one of the roles in startups that is most hard to define – the chief operating officer.
We spoke about our respective experiences from Trustpilot and Avito, and touched a number of topics: when do you need a COO, what does the role of the COO look like, what are the organisational requirements for a COO to succeed, and what characteristics should you look for in a COO?
When do you need a COO?
For a startup that is still iterating to get the key pieces of the company in place, there is a risk in bringing someone on too early in the COO role. The role of CEO is to work out the product market fit, the vision and strategic priorities of the business. Bring someone onboard in a COO position when this is unclear or still in flux, or the CEO needs immediate direct feedback from all business units to validate, and you risk muddying the water.
Once you are scaling, and business growth is more of an execution game, this is when the COO can have a real impact. Your trajectory is set, and you want to make sure you’re pushing as hard as possible in the set direction.
What does the COO role actually look like?
The short answer: it all depends. I have seen very few companies (but they do exist) where the COO is only focused only on the operationally heavy aspects of the business. There is often an unstructured component to it. At some point at Avito, I would own anything and everything that didn’t fit into the structured buckets like product and tech, finance or sales. It was basically about the founders wanting to clone themselves to free up time for strategic thinking and planning.
But that changed over time as the business grew. That’s another inherent characteristic of the role. The bigger the company, the more important it is that the COO operates through others rather than being a one-person execution machine.
At Trustpilot, where the COO role was created relatively recently, at a time when the company already had more than 500 employees, David’s position has developed into a chief “execution” officer. That basically means he owns and ensures the execution of the company’s strategy defined by CEO Peter Muhlmann and the department heads across business units. In doing so, he works with everyone cross-functionally to make sure the organisation is set up to and actually delivering on their targets.
Setting up to succeed
A successful COO has a unique position in companies to take a holistic, cross-functional view, but for this to work, the organisation must be geared up to accommodate it.
In short, you need to ensure there is sufficient internal political capital to give the COO the room to operate and lead. There is often a balance between the COO and the CEO on who owns what, and you need to make sure the COO is empowered to take charge and lead the team operationally within the agreed areas of responsibility.
How that happens can vary, as exemplified by mine and David’s very different experiences. David joined Trustpilot with over 20 years of industry experience, and could leverage the grey hair factor the get-go. For me at Avito, this was something I had to build up. I started as a nobody, with 6 months at McKinsey to my name. The HR manager had no idea what I was supposed to be doing, so during my first introductory walk around the office, the HR manager kept introducing me as ‘Christoffer, our new Director of the Internet’. No-one knew what she meant, so I had to start building my political capital from there.
Cultural fit is also extremely important for the COO role, due to the cross-functional and people leadership aspects of the role. Also, as the COO is the CEO’s right hand person, taking over what was often previously within the CEO’s remit, they need to be in sync on the vision for the company.
But what else makes a good COO candidate?
Characteristics of a great COO
As I have already highlighted, the role of the COO is to have the flexibility both to tackle different business areas, and also balance the macro and micro perspective.
I think of the COO as someone who can peel the onion and find the core of what drives the business and help drive and focus execution in line with that core. This means you need a structured problem solver, who’s analytical enough to break down problems into their core issues and draw conclusions on what to do from current state of the business. From there, you also need someone who gets things done.
It’s important to note that despite the focus on analysis and process, this is really a people role. You quickly learn that to enable change, you need to drive execution through everyone in the organisation, by bringing structure, process and prioritisation. And a final point from David; the COO role leaves little room for egos. A successful COO is someone who’s comfortable being outside the main spotlight and roll up his or her sleeves to get stuff done.