Smooth operator: when is the right time to hire a COO?

• Author: Morgan, Alexa V.
• Position: Entrepreneur Edge

As a startup company grows, so do the demands on an entrepreneur's precious time. When there just aren't enough hours in the day to get everything done, bringing a chief operating officer on board to take on some tasks can help your company rise to the next level--but the key is finding the right person at the right time.

Typically, a CEO is the public face of a company, tasked with growing the business. As second in command, the COO shifts that focus inward, keeping everything running smoothly so the CEO's attention can remain on building relationships, gaining customers and developing products. "It's of great benefit to a company to find a balance between an effective CEO who understands the company's vision and a COO who can reflect that same vision internally," says Jim Boyd, COO at Outlier Labs.

The primary goal in hiring a COO is to become more operationally efficient, says Dave Bethers, vice president of enterprise sales for TCN, Inc. However, the COO is not intended to be the company's problem-solver. "Your job [as COO] is to work yourself out of a job," Bethers says. "It is very necessary at times to be the 'technician' in order to fill the immediate need. The challenge is to not remain the technician."

As the CEO, owner or founder of a company, how do you when you're ready for someone to fill the COO role?

Know When it's Time

Growth is usually what prompts businesses to bring a COO on board, but it also depends on how the CEO chooses to manage his or her company. Brent Allen, vice president of Lifetime Products, says his company hired someone to manage regular operations within a few years because their president wanted to focus on research and development.

Some savvy entrepreneurs seek a COO even before the need arises, recognizing what their business lacks and how much an executive with a certain skill set can bring to the table. The type of candidate a company needs varies depending upon what stage they're at in the development process.

In short, a company needs to hire a COO when the CEO can no longer give equal focus to internal operations and outside resources.

Don't Wait

Some companies simply avoid expanding their executive team because they're hesitant to spend the money to hire a COO or take the time to train them. This approach can prove costly in terms of the productivity they lose as core employees are...