A short talk by Cameron Herold explaining when the Chief Operating Officer (COO) title is appropriate. He argues the title should match five factors—roles/responsibilities, strategic insight, required management time, P&L responsibility, and compensation—and gives examples contrasting an Operations Manager (hands-on, managed, ~$120k) with a true COO (senior, strategic, autonomous, ~$300k).
Chapters
All right, so let's talk about titles for a second. Is COO a good title? It depends. COO can be a great title if you are matching it to the right things. Titles have to reflect the roles and responsibilities of the person, the amount of strategic insight that they bring into the role, the amount of management time that you need to actually manage them or lead them, the amount of P and L responsibility that they have, and the amount of pay that you're willing to give them. So it's really those five things determine what the title is for the role. So let me give you an example for a second of when CO is not a good title. If you're hiring somebody who's doing lots of operations roles and projects for you, but you have to manage them day to day, they're not sitting at your leadership team meetings. Maybe they're kind of your second in command, but you're really delegating projects and giving them their to do list and showing them the stuff to do. And they might be doing a great job and cranking it out. And you're paying them $120,000 a year. And, you know, maybe they're doing everything for you. In operations, that's really a Director of Operations or an Operations Manager, not a coo. So it's a terrible title for that person because you're having to manage them, direct them. They're not sitting at the leadership team level. They're only making about 120,000 a year. They're really not a C level person. Now, on the flip side of that, if you move up the org chart a little bit, you go from maybe Operations Manager to Director to VP to a coo. Let's say you have a Chief Operating officer or a COO. You're paying them $300,000 a year. They've built three other companies just like yours before. They absolutely bring a level of strategy into the business. You kind of sit down and watch them in their role and go, wow, they're really, really strong. Maybe you're even learning from them on a basis. Once you give them their kind of roles and responsibilities, their core projects for maybe the next 12 months, maybe they just bounce ideas around with you a little bit. But they don't really need you to be managing them and leading them. They're really off and running and they're leading the company for you or with you, that is a coo. So the question of, is COO a good title? Depends. What's the person you're putting the title on?
