Have you considered hiring a Chief Operating Officer (COO) for your growing business? If so, you’re far from alone. Many SMEs are now increasingly recognising the value that this role can bring, with many private equity-backed businesses leading the way.
While in many large corporates the role of COO in recent years has tended towards leading a specific strategic imperative such as driving efficiency, in a high-growth company the COO takes a much more hands-on approach. They are the architect and project manager working behind the scenes to ensure all the building blocks are in place for the business to scale up successfully
During our investment in Portman Dental Care, we appointed a COO to ensure a consistent patient experience across the rapidly expanding dental estate. The COO focused on driving revenue growth through extended opening hours and improving patient satisfaction, as evidenced by a market leading net promoter score. To achieve this, Portman invested in data and MI tools to track progress and drive key decisions. The COO worked closely with the clinical director to ensure each existing and newly acquired site is consistent with Portman standards and ethos.
Having the right COO on board can turbo-charge growth yet finding someone who dovetails perfectly with the organisation can be a challenge. Personal chemistry, trust and respect between the CEO and COO are vital: the COO needs to be able to challenge the CEO’s thinking privately but remain solidly aligned when communicating with stakeholders. The CEO and the business also need to be ready to accommodate and integrate the COO, with a clear demarcation of roles from the outset.
So, what should businesses look for in their COO? Based on our experience of helping to bring in 12 COOs into our portfolio companies, we believe the individual should:
1. Combine pragmatism with vision
A successful COO translates vision into operational reality. They are resourceful, creative problem-solvers who relish a challenge and have the experience and skills to map out the practical steps necessary for a business to scale up and deliver on its growth plans. They provide the framework, building the platform from which a company can grow and so should be detail-oriented and prepared to roll up their sleeves to get the job done, while also keeping an eye on the bigger picture.
2. Be prepared to challenge the status quo
COOs need to have a clear understanding of what is and isn’t achievable, so they can focus on execution. Rather than accepting the way things have always been done, a COO should be able to – and, importantly, be given the space to – shake things up a little to get great results and create the right culture that will enable the organisation to grow. High energy levels and a good dose of emotional intelligence are also vital if the COO is to get buy-in from staff and the board. The most effective COOs are champions of continuous improvement, preventing businesses from becoming complacent and growth from stalling.
3. Be a master integrator
The role usually entails responsibility for a wide array of functions across the business, from IT and the supply chain through to human resources and legal issues. Strong communication skills and an ability to connect with people are important attributes that will ensure the COO can enforce the systems they are putting in place and co-ordinate work across different teams.
4. Have strong analytical ability
Progress is most effectively measured using key performance indicators and other metrics. COOs must be able to analyse the information generated by the business not only to track how new systems and processes are performing, but also use data to make informed decisions about the next steps necessary to grow the company.
5. Leave their ego at the door
Successful COOs achieve all this in the background. Success often takes time to achieve and, more often than not, is hard to attribute directly to the COO’s efforts. This is a role for someone who gains satisfaction from the strong performance of the business as whole; it is not a role for glory-seekers.
To find out more about how our in-house talent specialists have helped identify world-class COOs for fast-growth SMEs, please contact us at investments@livingbridge.com
