Hiring Your First COO: 5 Challenges That Come With this Growth Milestone
Your business is growing, and you find that you need more leadership capacity. The symptom is familiar: there simply aren’t enough hours in the day to focus on the things you, as the owner, should really be working on. Instead, you spend much of your time helping others accomplish the responsibilities they already own.
It’s not that you dislike doing this work, you probably enjoy it. In fact, your business is successful precisely because you’re good at it. But that raises an important question: who is going to focus on the other list of priorities if not you?
At this stage in your company’s life, you likely already have front-line or subject-matter leaders in place. Roles such as Plant or Warehouse Manager, Office Manager, or Sales Manager probably already exist. (If they don’t, that’s a topic for another post.) Still, someone must support those leaders, coordinate across functions, and handle the many issues that don’t neatly land on any one person’s plate. Today, that person is you.
Perhaps it’s time to hire your first General Manager, Director of Operations, or COO. For the purposes of this article, I’ll use the term COO to describe all of these roles.
Congratulations. This is another major milestone in your company’s growth. It’s an exciting step, and, as usual, it comes with new challenges. Below are five of the most common ones.
1. The cost feels significant.
In most companies, this will be the highest-paid position after the owner. It adds overhead and does not directly generate revenue. Initially, it may reduce your bottom line and put pressure on cash flow, which can make this decision hard to justify.
As with many growth decisions, this hire should be viewed as an investment in the future. A strong COO can improve operations so that future sales growth requires proportionally less expense and delivers greater contribution to the bottom line. Most importantly, this role should free you to focus on the next phase of growth. Refining strategy, developing critical external relationships, or raising capital for expansion, are all areas that often suffer from a lack of dedicated owner attention.
2. Finding and vetting the right candidate is hard.
Chances are you’ve never hired for this role before, and you’re starting from scratch. This is not a place to take shortcuts. Spend the time clearly defining the responsibilities of the role and the technical skills and experience required. This clarity will be invaluable as you evaluate candidates and avoid common hiring mistakes.
The interview process should be thorough and may require multiple conversations. Strong candidates will welcome that rigor; they will want to ensure the role is right for them as much as you want to ensure they’re right for the company. Cultural fit and alignment with you as the owner are critical, arguably more so here than in any other position.
It’s also essential to assess whether candidates, especially those coming from larger organizations, truly understand what it means to work directly for an owner. In large companies, authority and decision rights are often well defined. In owner-led businesses, that dynamic is different, and some decisions will still require owner involvement. The right candidate must appreciate, respect, and know how to navigate that reality.
3. Sharing decision-making can be uncomfortable.
If this is your first time sharing responsibility for major decisions, the adjustment can be difficult. While you want to stop being the “answer person,” the consequences of a bad decision still fall most heavily on you. As the owner, you carry the risk, and that weight can pull you back into every decision.
Hiring a COO requires learning to delegate, especially day-to-day decisions, to a trusted teammate. One effective starting point is simply acknowledging this challenge and addressing it openly during the interview process. How candidates respond to that level of candor can be very telling.
4. Staying informed without being involved requires intention.
Many owners maintain a strong pulse on their business by being deeply involved every day. They get a feeling for how the team is feeling, what’s happening with customers or suppliers, or small operational issues that could become bigger problems.
Once you step back, that level of awareness will change. It should. If you’ve hired the right person, and you’re truly reallocating your time, you cannot and should not stay as informed as before. The key is to define what information matters to you and why. Setting clear expectations around communication is a critical part of onboarding a new COO.
Over time, the type and amount of information you need will likely change as your confidence in your COO grows. That evolution should be a regular topic of conversation.
5. This role requires deeper access to information.
Unlike any other position in the company, your COO will need access to sensitive information to make good decisions and effectively lead. In many owner-led businesses, there is little separation between company finances and personal finances, and certain competitive information has traditionally been closely guarded.
To set your COO up for success, you will need to share most, if not all, of this information. It’s difficult for someone to meaningfully contribute without access to financial statements, customer data, cost structures, and growth plans. This is understandably a big step, but it’s a necessary one at this stage.
How a candidate thinks about confidentiality should be a meaningful part of the interview process, and your attorney can help you put appropriate confidentiality and non-disclosure agreements in place.
As noted above, hiring your first COO is a significant milestone and deserves the time and focus required to get it right. This role has a profound impact on your team, your operations, and your key external relationships. If your first attempt doesn’t work out, acknowledge it quickly, learn from the experience, and take another swing.
With the right person in this seat, you unlock your ability to take the next meaningful step in your company’s growth.