Hiring a Chief Operating Officer

“No 2 COOs are alike—and it’s likely still true today that the COO is one of the most misunderstood roles in the C-suite.”
—Belinda Johnson, COO of Airbnb

“I would rather be COO working for someone I respect in an industry I love than be CEO someplace else.”
—Steve Burke, former COO of Comcast, former CEO of NBC Universal

Hiring the right chief operating officer (COO) can be a critical step in setting you and your company up for long-term scale, but it isn’t a given that every CEO should hire a COO or that every company will be better off for hiring one. A COO–CEO relationship is a true business partnership, with shared accountability for company decisions. So you, as CEO, must be certain you want to share operational control and oversight of the company you built with someone else. If you’re just looking for someone to take over key functions in the company, you’re likely looking for a different executive.

While other roles are defined by functional outcomes necessary to drive business, the COO is largely defined by what the CEO doesn’t want to or can’t do. From the perspective of hiring, then, this makes the COO one of the most elusive roles to define. A successful COO at one company might not be a successful COO at another. That said, best-in-class COOs are generally intrinsically motivated—they thrive on doing work for its own sake, not for external validation or reward. This is one of the most important qualities CEOs can vet in the interview process. Intrinsically motivated COOs are humble and team-oriented, avoid the limelight, and understand that they’re #2 in the organization. 

A great COO complements the CEO’s capabilities, keeps the organization humming, and frees up the CEO to focus on their strengths. Tactically speaking, this might look like managing the day-to-day operations of a company while the CEO focuses on long-term vision and product, or acting as the connective tissue that allows teams to work together effectively. That said, every COO hire involves compromises. No COO is going to excel at all parts of their job—they’ll inevitably manage functions they don’t have first-hand experience with—so you’re looking for someone who is a great manager, experienced recruiter, and a world-class operator who can translate their functional strengths to oversee almost any area of the company. This is someone who can put out a fire anywhere in the organization, whenever the CEO needs them to. 

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When to hire 

The demand for COO roles fluctuates over time for both public and private companies. Over the past several years, 32–48% of Fortune 500 companies have hired a COO. So how do you know if hiring a COO is right for you? 

Companies typically bring on a COO when the CEO lacks the time or experience to manage multiple aspects of the company as it scales and becomes more complex. This typically manifests in a few ways:

• The company scales to a point where the CEO is taken away from day-to-day operations—typically focusing instead on regulators and customers—and needs someone on the “inside” to keep all parts of the company operating. 
• The CEO self-identifies as weak or uninterested in running certain operations. Some CEOs, for instance, want to focus on product and engineering and dislike running HR and people practices, so they’ll hire a COO who can manage those functions. 
• Some companies bring on COOs to run the entire go-to-market organization to prepare for a period of significant growth and transformation. 
• Consumer companies typically hire COOs more often than enterprise companies because they interact more with regulators and external industries (like renters, restaurants, grocery stores, etc.). They often need a central executive to manage the operations between and among these different units. 

When not to hire 

One of the areas where we see COO hires hinder orgs the most is executive hiring. Part of your COO’s job will be to uplevel the executive bench, but most CEOs don’t realize that it’s much more difficult to attract and retain top-notch executives if those executives will report to the COO instead of to you. Consider very carefully if you have the key leaders you already need in place and who you want to include on your executive team. 

Other common mistakes when hiring COOs include:

• Hiring a COO too early, which prevents CEOs from developing a strong understanding of the company’s core elements. For instance, we often see CEOs hire sales leaders before they themselves understand the value proposition and sales cycles of their products, which inevitably leads to a mishire. Simply put, if you, as the CEO, don’t own those parts of the company long enough to understand how they work, how can you ever expect to understand what they need to scale? 
• Hiring a COO to fix broken parts of your company is also a losing battle. If 2 out of your 4 direct reports aren’t pulling their weight, for instance, it’s unrealistic to expect a COO to fix that problem.
• Hiring a COO who actually wants your job as CEO. We’ve seen instances where CEOs hire someone who isn’t intrinsically motivated and wants their time in the spotlight. In these cases, the COO spends too much time interfacing with the press and other teams instead of running the company.
  
  It’s very difficult to hire a COO as an explicit successor to the CEO for a couple of reasons. First, you run the risk of running a CEO search under the guise of a COO search—they’re fundamentally different hires with different competencies and experiences. Second, COOs are a fundamentally reactive hire—they work for a particular company at a particular point in time. By the time the CEO leaves, the company will likely have evolved and have new challenges and goals, which might not be well-suited to the COO’s strengths. 

Writing the MOC 

We discuss writing a mission–outcomes–competencies (MOC) document in greater detail in The Hiring Process.

Majors and minors

Unlike other executives, the COO doesn’t have a standard list of core competencies. COOs will also sniff out any hint of misalignment in the interview process, so it’s critical that, from the start, everyone in the company and on the board is aligned on what parts of the company the COO will own and why. That’s why writing the MOC is especially important for this hire—it systematizes what you’re looking for in a famously amorphous role. 

We find it helpful to start writing a MOC for a COO by dividing their outcomes into “majors” and “minors,” then deriving core competencies from those major and minors. 

First, the CEO should itemize the functions they no longer want to lead, and then rank those functions by those most in need of leadership. These functions are the “majors,” the ones that your COO should have deep experience in scaling. The other functions are the “minors,” the parts of the company the candidate should have had direct experience with, even if they perhaps haven’t managed these functions themselves.

Experience and background

CEOs should then pattern-match the majors with executives who have deep expertise in those areas. These are world-class leaders who have scaled their operational functions and teams extraordinarily well at their previous companies and are “graduating” to manage functions outside of their core competencies. We think the following line from the hiring guidebook Who describes these executives well: they have “at least a 90% chance of achieving a set of outcomes that only the top 10% of possible candidates could achieve.” 

A note on internal hires: not many companies have the opportunity to promote someone internally to COO, but when the option does come up, it’s often a win-win. Homegrown COOs almost always earn the title organically, and generally have very solid working relationships with the other executives on your leadership team. They have great familiarity with the organization, how it’s evolved, and what needs to happen in order for it to grow.    

Recruiting

Your COO should also be a world-class recruiter so they can overcome one of the trickiest challenges of the role: they need to build out and uplevel the executive bench beneath them, but it’s harder for them to attract best-in-class talent if that talent is reporting to them and not to the CEO. Many executives might feel like second-class citizens if they don’t report to the CEO—particularly if you include only your direct reports, and not all functional leaders, in your regular executive team meetings. 

To vet a COO candidate’s hiring chops, we recommend looking for a track record of leading high-performing, diverse teams across different companies with consistent success. Below are some outcomes to test for during the interview process: 

• Designed and built their organization to respond quickly and effectively to meet business needs
• Developed a clear leadership and talent methodology that attracted and retained ambitious hires
• Has a reputation of being great to work for
• Knows when to coach reports, and when to uplevel or hire someone else
• Delivers balanced feedback

Sample MOC

 

Setting up your COO for success 

We cover best practices in The Hiring Process, but we’ve included some recommendations below for what different members of your executive team may want to focus on when interviewing engineering leaders.

Are your values aligned?

Your ideal COO is similar enough to you to share your values, but different enough that they can cover the parts of the company you can’t. We recommend spending a significant amount of time with your candidate and being candid about your shortcomings as a leader. This helps you develop the right relationship with your second-in-command, so there’s no mistake about why you’re hiring them and what they need to focus on. Talk through difficult situations you’ve each worked through separately, or challenges you anticipate you’ll have to navigate together. Many engaged couples do this before getting married, and there are a lot of parallels in this situation.

Is your candidate intrinsically motivated? 

This is the key orientation to test for when assessing a COO candidate. Early in the interview process, consider asking what their best job was and why, how they stay motivated and engaged with their work even when it’s difficult, or what the most important takeaway of their work is. As you spend more time together, you’ll gradually understand how and where your candidate finds value in their work. 

Can you maintain a cohesive executive bench? 

While it’s important for your executives to know who they’re accountable to, you generally want to avoid creating an “us versus them” feeling among executives who report to the CEO and those who report to the COO. One way to avoid this is to organize leadership meetings by functional area instead of direct reports, and to make sure that you, as the CEO, take the time to develop relationships with every leader on the executive bench—not just those who report to you.

Ask for opinions and observations—not approval

The COO is your #2, so it’s critical that the push for this hire comes from you, not the board, and no one else holds veto power. Once you’ve discussed bringing on a COO with the existing executive bench, you should bring in only qualified, reference-backed candidates for interviews. Instead of asking your executive bench to rubber stamp the COO, ask them for their opinions and observations on the candidate’s cultural fit and managerial expertise. 

Encourage your COO to focus on their weaknesses

It’s important that your COO quickly learns how to manage functions that are new to them. So once they’re in the role, consider directing their attention away from running functions they’ve managed before and toward the ones they haven’t. If you hired an experienced chief revenue officer as your COO, for instance, consider asking them to spend only 30% of their time on sales and the rest of their time learning to manage the other functions that report to them. That COO might also need to hire a more experienced senior vice president of sales to uplevel that function. Let them assess what teams they need in order to execute on the goals you both agreed on in the hiring process. 

Thanks to Matt Idema, Karen Peacock, Jeffrey Samuels, Hatim Shafique, and Gil West for contributing their hard-earned wisdom and expertise to this guide.

Further reading

Below, we’ve listed some key resources for understanding the COO role and operating at scale.

Riding Shotgun: The Role of the COO, Nathan Bennett and Stephen A. Miles
While this book is designed to help those who are looking to serve as COOs, the authors have dived deep with CEOs and other executives about their first-hand experiences with COOs, which can help you identify who you’re looking for, avoid common pitfalls, and gain a realistic understanding of what success looks like. 

Scaling People, Claire Hughes Johnson
An early leader at both Stripe and Google, Hughes Johnson answers key questions about what it takes to be an effective leader and manager in a rapidly scaling company. This hands-on book offers templates, worksheets, and other exercises to help you create the right framework to successfully hire and scale your team. 

The Advantage, Patrick Lencioni
Not only do healthier organizations outperform the competition, they can attract and retain top talent. This book helps you understand the foundations of organizational health and take a unified approach to management, operations, and culture. 

Designing a Company’s Operating System for Hypergrowth, Belinda Johnson
During her time at Airbnb, Johnson went from sharing a desk with one of her cofounders to a team of more than 4,000 in just 7 years. In response to this hypergrowth, she developed a new “operating system” to help employees better share information, make decisions, and increase productivity.

Who: The A Method for Hiring, Geoff Smart
Hiring mistakes are costly, but you can take steps to avoid them. In this book, Smart compiles advice from CEOs, investors, thought leaders, and more, and outlines a 4-step process to increase your hiring success rate. 

Stepping up: What COOs will need to succeed in 2023 and beyond, Darryl Piasecki
What skills and talents should you be looking for when hiring a COO? Here, current and former COOs weigh in on what the next batch of COOs need to succeed. While this article is directed at COOs, they’ve identified 5 proficiencies that can help you make the best choice when evaluating candidates.