Alternatives to installing a Chief Operating Officer (COO) at lower cost and with higher odds of success.

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The responsibilities shouldered by the successful Chief Executive Officer (CEO) increase with an organization’s progress and growth in scale and complexity.  The tension between the need to get things done, get others to do things, bridge the “white space” between organizational units, and to represent the organization externally (e.g. to investors, regulators, partners, suppliers, donors, the board, and the market) typically grows to the point where the CEO seeks to install a Chief Operating Officer (COO) in hopes of spreading the load across another strong executive.

While adding a COO to the management team may be the right thing to do over the long term, it is a difficult, time consuming, expensive, and risky move that is not likely to pay off in the short-term because:

  • The ideal candidate is rarely already ‘in-house’. Those already with the organization are typically too vital in their current role, or not appropriate given their abilities and interests.  Moving them into the role leaves too big a hole and may be too much like asking a rabbit to swim.
  • The cost to find, recruit, hire, and on-board the ideal candidate from outside the organization is significant.  It takes a long elapsed time, consumes precious management time, and is expensive both in terms of search fees and the incremental cost to compensate the new person.
  • The odds of successfully bringing in someone from the outside are low. The failure rate of such placements is high because of how hard it is to bring a new senior player into an existing team of executives, prepare an organization for a new COO, and support the new COO in getting up to speed and powerfully assuming the role.

In light of the above it is a good idea to consider one of the two following alternative approaches.

The Deputy

While the forward-thinking CEO can and should work on a long-term strategy to address their needs, there is an alternate approach to installing a COO that creates short-term improvement that may be adequate for quite some time. The approach is to define a staff role to the CEO that facilitates and drives the management operating framework thereby offloading an enormous operating burden from the CEO.  A person in such a role is often called a Deputy Senior Officer or a Chief of Staff and is common in military and government organizations and in organizations that serve governments, such as SAIC among others.

The Deputy position can be filled by someone with competencies that range from high-end administrative to those of a near-COO or even someone who could eventually some day serve as COO or CEO.  The best strategy is to assign, from inside or hired-in, a low-ego, high-skilled person who is liked and non-threatening to the existing leaders and who is positioned for maximum benefit and long-term potential to the organization.  The higher the skill level, the higher the price, the harder to find, and the more risk of sparks flying when existing leaders realize there is another strong(er) player in their midst.

The Analyst

An even less risky, less expensive, and more easily accomplished solution in the short-term is to fill the staff position with a business analyst that:

  • Has a high-bandwidth intellect with deep knowledge of any important part of the organization and who has interest and energy for all parts of the organization
  • Has a lot of energy, capacity, and drive
  • Is conceptual and articulate so as to be able to develop an accurate big picture from a myriad of details and to communicate complex concepts even to those who are not conceptual
  • Has acumen for management and leadership
  • Has a disposition that is compatible with the CEO, and who has
  • A “long runway”; i.e., early in their career, bright, and an ambitious person who is likely to go far.

Assigning top business analysts to staff roles is common to organizations such as IBM, Apple, and Motorola where top-flight young professionals, often graduates of top business schools with just a few years experience, are assigned as Executive Assistants to the organization’s top executives for a year or two before returning to other roles in the organization.  The executives get extraordinary service and the up-and-coming assistant gets a front-line education and opportunities to grow and perform that are unsurpassed.

To increase the odds of having such talent on staff, hire MBAs fresh-out of the top schools and groom them in the business for a few years and then assign the best to staff top executives as described.  On the other hand, the best MBAs have probably been courted and brought on by top consulting firms.  Consequently, a shortcut is to find and retain a business analyst from a top firm on a consulting basis to work full-time in the Analyst role for a top executive.  If they work out well, hire them as employees.  If not, place them elsewhere or cycle them back to where they came from and try again.  I personally very successfully followed this exact strategy as the top executive at Hyperion Software in the late ‘90s with a Harvard MBA retained from a top consulting firm.

Summary

With either approach the course of action is to define the role, conduct a search, and then design and drive a process to work with the alternative to the COO, the CEO, and the management team to bring them on board and to get everyone on track for success.

One thought on “Alternatives to installing a Chief Operating Officer (COO) at lower cost and with higher odds of success.”

  1. This “apprenticeship model” works really well for the executive and the analyst or deputy. It is a good way for the executive to get excellent support and a good way for the deputy and analyst to learn on the job without all the responsibilities yet. The commitment on both sides is very important. If the executive does not provide the kind of mentoring that is needed, the analyst’s inexperience can cause interruptions that undermines the overall strategy execution and credibility of the leadership.

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