How To Hire a COO
COO is one of the more common C-level executive roles behind The CEO and CFO. . The specific process for hiring a COO compared to the other C-level roles isn’t much different; however, the methods which people prioritize when they are going to hire a COO do change, and the specific requirements, compensation, and expectations often do differ a lot. So here I’ll show you how to hire a COO and the best practices when doing so.
What does a COO do?
The COO, sometimes referred to as EVP, SVP, or VP of Operation (depending on the size of the company), is usually the second in command and reports directly to the CEO. This role is responsible for taking care of the daily operations of the business and normally has a high-functioning relationship with the various department heads like Finance, Sales, Marketing, Operation, Supply Chain and Logistics, Human Resources, etc.
The COO watches over the daily aspects of the business and ensures everything is running smoothly. Doing this well allows for the CEO to focus on strategic issues.
Best Practises when hiring a COO
You may not know how to hire a COO or any C-level executive, so I’ll walk you through my thoughts on the process as you move forward in your journey.
Plan ahead (4 months + if possible)
A typical oversight that many make when looking to hire a COO is not comprehending how long the process may take. If a C-level executive, like a COO, leaves unexpectedly, the average time to replace is around 76 days. Remember that is an average, and I’ve seen search processes take much longer depending on the complexity of the need. Sometimes you only have as little as three days’ notice that your COO is leaving, and many companies do not have a succession plan for the position. Internal appointments make up around 35% of the appointed to the C-suite.
As you can see, getting a new COO can be a long and complicated process, so I would highly recommend starting the process as early as possible as it’s not uncommon for the process to take 4+ months.
Furthermore, the instability a company faces without a key C-level member can be very damaging. So ensuring a smooth transition by being prepared will, in the long run, make everyone in the company more comfortable.
Create a Search Team
The team responsible for hiring the COO would normally be comprised of the CEO and CHRO. In some cases, the CFO will also participate, given the close working relationship operations has with finance. If you are a company with a strong board and one of the members has a solid operational background, they could also be invited to participate.
If you intend to conduct a confidential search, your search team may need to be smaller. It will need the assistance of a partner from an executive search firm to aid in the search due to the difficulty in finding candidates and approaching them in a way that does not alert the current standing COO.
If you require more guidance about this topic or help in executing a confidential search for your next COO, please contact me! If your need is urgent, I can help set up an immediate consultation. Boyden has staffed thousands of COOs and can aid you in this critical time.
Create a Job description
What your COO is responsible for can differ greatly from one company to the next. The operational structure of your company will impact what type of COO you require. The goals of your company will play a major factor.
Some key responsibilities to consider when you create your job description, as seen in many of my clients:
- Ensuring proper direction in daily operations. This can include coordination with sales, marketing, HR, finance, manufacturing, legal, and IT.
- Filling in for the CEO if ever absent and assisting in onboarding a new CEO who joins the company.
- Keeping the CEO abreast of the daily operations.
- Provided support to the leadership team and employees.
- Creates and implements policies for daily operations and works with the organization to make sure these efforts are communicated effectively.
Start your COO search
With your team aligned and a top-notch job description made, you are ready to start approaching candidates and promoting your position.
Where to find potential COOs to hire.
Internally – internal candidates such as your VP, Operation, or other senior management often make great candidates. It is always good to advertise the role internally (unless you are trying to replace a current standing COO confidentially). As internal candidates know exactly how your business operates, they can often be an excellent choice with a very smooth transition into the role. That said, even if you have a solid internal option, you should consider comparing that option against what is available externally.
Referrals – internal suggestions can also be good for getting candidates. Many times your existing executive team has worked with competent operational leaders, perhaps from their previous place of employment.
Externally – The majority of C-level hires are external hires. Often my clients are looking for a fresh perspective. A source of new ideas coupled with a track record of success.
Refine your selection + Interviews
Hopefully, with a selection of COO candidates identified, you can narrow your list down and begin conducting interviews. You can expect to interview candidates multiple times at the COO level, and you continue to bring your list down to just a few. Eventually, your committee or CEO will choose one to move forward with.
Once the final selection of your COO is determined, effort needs to be put into due diligence. You should verify the following:
- Degrees, designations and certifications
- Employment history
- Criminal record and credit history
- Public record
- Social Media
These crucial final steps are critical and should not be overlooked or mishandled.
How much should I compensate a COO
The Annual Salary of a COO in the USA, according to salary.com. Is as follows, per percentile:
- 10% – $265,488
- 25% – $358,900
- 50%(Median) – $461,500
- 75% – $598,100
- 90% – $722,467
The average salary when including bonuses and benefits is $793,428
This may appear higher than many other C-level roles, but this is skewed due to the fact that COO only generally exists in larger companies with 100+ people. Until a company grows significantly, most have an operations lead.
Common mistakes internal search teams make
When a team isn’t familiar with how to hire a COO, they often make the same common mistakes which leads to them missing that top talent COO candidate they where hoping for. Of the mistakes I’ve seen, these top the list:
- Underestimating the time needed to fill the role.
- Not being organized
- Failing to properly define what is needed in the profile
- Mishandling candidates during the search process
- Neglecting to reference properly
I hope my guide helped you understand the best practices for hiring a COO. Please contact me if you are looking for tailored advice or help with your executive search. I am a Managing Partner with Boyden and bring 25+ years of experience in executive search. I’ve helped place many COOs and can help you directly or connect you to someone in your country or with expertise in your industry. Even the project needs to be confidential.
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