BACKGROUND

The responsibilities shouldered by the successful Chief Executive Officer (CEO) increase with the venture’s progress and growth in scale and complexity. The tension between the need to get things done, get others to do things, help bridge the “white space” between organizational entities, and to represent the venture externally (e.g. with investors, regulators, the board and the market) typically grows to the point where the CEO chooses 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 move 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 venture are typically too vital in their current role, or not appropriate given their abilities and interests.
• The cost of finding, hiring, and on-boarding the ideal candidate is significant. It will take a long elapsed time, consume a lot of precious management time, and be relatively expensive in terms of search fees to find, recruit, hire, orient, and assimilate someone for this role from the outside. This in addition to the incremental cost to compensate the new person.
• The odds of successfully bringing in someone from the outside are extremely low. The failure rate of such placements is high. This is principally due to the challenges associated with bringing in a new senior player into an existing team of senior executives. This includes preparing the organization for the new COO’s arrival as well as supporting the new COO in getting up to speed and powerfully assuming the role.

ALTERNATE APPROACH-I: The Deputy Senior Officer/Chief of Staff

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. The person who fills this role, often called a Deputy Senior Officer or a Chief of Staff, is common in military and government organizations and in organizations that serve governments, such as SAIC and others.

The position can be filled with an individual 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 non-threatening to the existing organization and 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 managers realize there is another strong player in their midst.

ALTERNATE APPROACH-II: The Business 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,
• Acumen for management and leadership, and who has
• A “long runway”; i.e., a young, bright, ambitious individual who is going far.

This strategy 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 firm’s top executives. The executives get extraordinary service and the up-and-coming assistant gets an education and opportunities to grow and perform that are unsurpassed.

Now is a good time to find strong candidates of this sort as the market is still soft for top-end MBAs two to five years out of even top schools. The best candidates are probably being guarded by the nation’s top consulting firms. Consequently, rather than hiring outright, it may make the most sense to retain one or two such individuals from a top firm on a consulting basis to work full time in this role. If they work out, you can bring them on board. If not, you can place them elsewhere in your firm 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.

SUMMARY

For both approaches, the course of action is to define the role, orchestrate a search for the person to fill the role and then design and drive a process to work with the person, the CEO, and the management team to bring the person on board and to get everyone on track for success.