08 Feb Beyond the CEO: Why Every Startup Needs a COO
When you think of the most innovative and successful companies in the world, the face you associate with that company is that of the CEO. When you think of Virgin you picture Richard Branson. When you think of Apple you think of Steve Jobs and now Tim Cook.
A CEO, the Chief Executive Officer, is the highest position at companies from Fortune 500 giants to small startups, but their role in a company is often misunderstood, which causes confusion and leads to costly mistakes.
In A.G. Lafley’s article What Only the CEO Can Do, Lafley cites Peter Drucker’s thoughts on the role that a CEO plays in a company. “In 2004 Drucker said, ‘The CEO is the link between the Inside that is ‘the organization,’ and the Outside of society, economy, technology, markets, and customers. Inside there are only costs. Results are only on the outside.”
My take on this quote is that the CEO must be the leading visionary for a business–bringing their insight and what they view as opportunities from the world outside of the business inside the business. Once inside the business, it’s the job of the executives and team to develop these insights into products, services, and most importantly — a feasible and actionable plan that will work best for the company. Here’s where the COO enters the picture of a startup.
In my decades of experience in organizations both small and large, CEOs have ranged from stable and well-seasoned corporate executives to brilliant but impatient dreamers who jump from one thought, and project, to the next in an instant. The one thing in common with all of them who achieve any level of success is a competent team that can lay the groundwork and help build and guide their ideas and insights. My job as a COO is to take the goals of and information from a CEO and turn it into the right plan for the company.
For example, let’s say that we work in a tech startup that’s creating an app to help construction sites save money on labor and materials while building a structure for a client. The CEO sees an opportunity to use some of the existing technology and infrastructure to create a second app designed for custom car shops so they can save costs on parts and labor when taking on a customized project for a client.
After making the decision to go in this direction, our company will have to determine what needs to be done in order to create this second product, the possible ways to create it, the costs of those ways to create it, how current staff will need to shift in order to participate in the design and development of this product, hire on additional staff if necessary, and create a timeline and goals for product completion when the other decisions have been made.
Without a COO, the responsibility of everything that comes after the decision to create the second app would fall squarely on the shoulders of the CEO. The CEO would then need to take his or her focus away from all of the other operations of the company in order to create this new product. This is why a COO is so important to a startup. Not only do they allow the CEO to keep their focus on the growth and overall direction of the company, they provide insight on how the CEO’s vision can come to life within the company, and develop the plan to execute on that vision.
An effective COO makes the ideas of the CEO happen in the most effective and efficient way possible, and in a startup, that may just be the determining factor between success and failure.