A Chief Operating Officer is a person who takes responsibility for the operational and administrative functions of an organization.
Aaron Alpeter, a former COO at Sustain Natural himself, says, “It’s very easy for startups to throw C-suite titles like COO around but just because you’re prepared to call a cat a dog doesn’t mean that it’s a dog.”
Many startups tend to assign roles based on the current operations that a person is assuming responsibility for. For the title of COO, anyone managing operations in the initial stages of the startup is usually given the title of COO.
This is where, according to Aaron, lies the need to identify the differences between different managerial and C-level roles and the stages of startup financing that your business is currently in.
Organization Designations: Bottom-Up Managerial Role Identification
1- Managers
Managers in an organization are of many types and at every level of the hierarchy. From the ground up, supervisors leading a team report to managers of their respective vertical or department. This means that managers assume responsibility for a specific operation of a business.
Depending on the vertical, one can be
- Fulfillment manager
- Customer service manager
- Production manager
Providing insight into Fortune 500 company operations, Aaron states, “Managers in Fortune 500 companies manage people, but managers in startups manage operations.”
Highlighting the difference in the occupational responsibilities assumed by holders of the same designation in organizations operating at different scales, Aaron clarifies that startups can’t assume that their current operational managers are fit for responsibilities of COOs.
2- Directors
Managers report to directors, individuals that oversee the smooth-running of operations and work to prevent and find solutions to problems encountered in day-to-day operations.
Directors can have several managers reporting to them and depending on the size of the organization, there can even be several directors for departments like marketing, sales, etc.
These individuals streamline work output and ensure collective productivity in the department they assume responsibility for.
3- Vice President
Vice Presidents are considered end-to-end owners of the operations they are in charge of. They have to ensure organizational performance is in line with company goals and values.
With a huge responsibility resting on their shoulders, VPs need to be individuals who know the ins and outs of the business. Aaron states, “Most of the time of these individuals is spent managing up and managing out.”
These are individuals tasked with setting and ensuring the realization of the goals of the vertical they’re representing. Although often referred to as a COO in many companies, VPs in bigger companies report to the C-suite and the board of directors, including a COO.
4- Chief Operating Officer
The difference between a VP and a COO is that the latter takes responsibility for more departments than the former which is what makes them senior to a VP.
Although there are various assortments as to which aspects of an organization’s operations are assigned to a COO in each company, a classic assortment usually involves the following:
- Finance
- Supply Chain
- Customer Service
Regardless of the verticals assigned, a COO needs to be a person who understands and strategizes the company’s mission for their subordinates to execute.
Although they may not be subject matter experts in the areas they’re handling, they need substantial knowledge of the operations they’re responsible for the execution of.
For example, they may not be expert accountants but if their domain of responsibilities includes finance, they need to be able to understand audits and several other major aspects of startup financing.
COOs work closely with the Chief Executive Officer to understand and translate the organization’s mission and values into a strategically executable framework for everyone to follow.
When Should You Hire a COO?
Aaron states, “COOs are typically an early Series B or a very late Series A hire, meaning if you’re not a series B company yet, you should be asking yourself if you really need a COO.”
Referring to stages of startup financing, Aaron highlights the importance of prioritizing hiring the right individuals at the right time. If you hire a COO or give the title to your current operations manager, chances are that the individual’s growth will not keep up with the growth of the company’s operations.
That’s why it’s common for companies to change senior positions when experiencing substantial growth. Another reason you shouldn’t promote someone to a COO outrightly is that it’s more difficult for companies to demote someone.
It’s difficult to make the right decisions at the right time without knowledge and awareness of everything concerning your business. Especially when it comes to hiring the right people. Growth, development, expansion and even sustainability sometimes depend on the kind of hierarchy an organization chooses to follow at any time.
This is why we recommend you get certified Fortune 500 expertise to help you achieve your business goals in the form of supply chain consultants at izba. It’s our mission to help startups accelerate their growth and scale beyond current horizons.
Call us and we’ll help you make the right decisions.
