How And Why I Hired A Killer COO Out Of >250 Applications With This 4-Step-Process
I’m looking down on foggy San Francisco and thinking about all the visionaries who drive this town. I’m here for the Singularity Global Summit, where everything is about vision and the future. Legends like Steve Jobs and Elon Musk are called visionaries because of the way that they have anticipated and shaped future market behaviour.
But building an amazing company requires much more than only vision. It’s often said that every success story is 1% inspiration and 99% transpiration. You have to sweat and execute!
Many people have good ideas, but few can execute and build a great company based on said ideas. The execution of the idea is where the role of a great COO comes into play.
Why a hire a COO in the first place?
My strengths as CEO of RegioHelden were typical founder qualities: I was good at designing an MVP, persuading customers and employees, raising money and defining an overall vision & strategy. Some of my main assets were qualities like willpower, curiosity, creativity and impatience.
The qualities got me quite far, but it took me a few years to realise that these same assets could turn out to be liabilities when it came to building and managing an organisation. I remember a situation where an early HR manager quit after just a few months and told me that one of the reasons for doing so was that she hadn’t received any management from me. Oops…
I learned the hard way that starting a company and managing a company require a different set of respective skills.
- My willpower drove people crazy because my expectations were always too high and could very rarely be met.
- My curiosity and creativity made it hard to predict my behaviour. I would always have new ideas and wanted to test new things.
- My impatience often pushed people to their limit (good!) but sometimes over it (bad!) and caused frustration.
I might have been good at setting directions, recruiting and motivating the team which were all important things. But I basically sucked at the managerial role.
What does a COO actually do?
When it comes to the definition of both roles I like the model of the Visionary and the Integrator. Basically, the Visionary focuses more on driving innovation, new ideas and the market side, whereas the Integrator tends to focus on building the organisation and maintaining “business harmony”. A good COO/Integrator defines systems and processes, manages the staff day-to-day and basically creates stability. Often, the CEO role is more focused on externalities (market, customers, investors etc.) and the COO role focuses more on the inner workings (employees, org design, processes, systems).
At RegioHelden my COO and I would sometimes distinguish our roles as “foreign minister” and “minister of the interior”.
There might be situations where one person can fill both roles of CEO and COO, but, more often than not, I see that splitting the roles between two persons with different skillsets is much more efficient especially in scale-mode.
The best time to hire a COO? As early as possible.
I hired my first COO in the third year after starting the company. That was around half a year after we raised the first million in VC. In retrospect, I should have filled the position earlier, probably even in the first year. The main reason is that it’s difficult to implement systems and processes in a rapidly growing company. Also, maybe my HR manager would not have quit so quickly.
Think of it as building an engine while the car is running. The faster you get, the harder it will be to build up and fix things. So try to lay out a strong foundation of systems and processes before you put the pedal to the metal.
Finding the balance between fast growth and building a solid foundation is always a challenge. But believe me, it sucks more to have a weak foundation and have the engine overheat than to grow a little slower but with a strong core.
The 4 will produce your next killer COO
The processes I used to hire our first COO in 2012, and the second one in 2018, were basically the same and are strongly inspired by Topgrading as well as the Who Method. Of course the methodology is not limited to COO positions and I recommend a structured process like this for every position.
The process basically boils down to these steps:
- Define a scorecard & job description
- Fill the funnel to the maximum
- Select with structured phone and personal interviews
- Test drive and check references with the team
1. Define a scorecard & job description
This is probably the most underrated step. A lot of first-time founders just create some sort of job description without putting much thought into the scope of the role. Big mistake.
In the screenshot you see the scorecard we used for our COO opening in 2018. The scorecard includes the mission of the role, expected outcomes as well as competencies and experiences/skills which the candidate would need.
Having such a scorecard has a lot of advantages:
- All the people involved in the search process (HR, assistants, direct reports, headhunters etc.) understand what the candidate needs to bring to the table.
- It makes it easy to create a crisp job description.
- It can be used to measure candidates against competencies in interviews.
- It makes it possible for different people to have an objective discussion (vs. evaluating candidates on gut feeling).
We then created a public job description out of the scorecard. That was pretty straightforward.
2. Fill the funnel to the maximum
At the top of the funnel it’s just a numbers game: The more applications, the better. A lack of alternatives is never a good reason to hire a candidate. So focusing energy and some investment will create a big funnel and ultimately pay off.
“A lack of alternatives is never a good reason to hire a candidate.”
We used the following methods to generate applications:
- We spread the job description on all the relevant job boards as well as social networks such as LinkedIn and XING. The investment for this was probably around 5–10k EUR.
- We would mandate 5–6 external recruiters in non-exclusive performance-based deals. That means that we would only pay the agency 20–30% of the first yearly salary if we hired their candidate. Of course, recruiting agencies don’t really like to work non-exclusively and will advise against it. In our case we were pretty confident that we could fill the position without an exclusive deal so we went without one.
- We would use my personal social media accounts to cold-contact > 1000 people that suited the role on LinkedIn and XING. The message would be very short and something like “Hi XY, we have an interesting COO opening at RegioHelden. Perhaps it’s of interest to you or someone from your network. Here is the link: XY.de/link. Best, Feliks”. What’s interesting is that a lot of people actually replied to the messages because they were sent from a CEOs profile instead of a typical recruiter’s account. Also many people would forward the message to their contacts and spread the word.
- I would personally contact > 200 people from my network as “multipliers”. Those people were fellow entrepreneurs, CEOs and COOs as well as investors and business angels. I sent them the job description and offered 8k EUR for a successful referral (much less than a headhunter!).
- We would incentivise all our 200+ employees the same way as the external multipliers to recommend candidates.
Those actions combined resulted in over 250 applications in a timeframe of 6–8 weeks, which was pretty good for such a specialised role in a not-so-common city (Stuttgart).
3. Select with structured phone and personal interviews
For the incoming applications we used the scorecard to measure candidates against the criteria in structured job interviews. To keep the process efficient my HR manager would first do 30-minute phone interviews and then hand the good candidates over to me. I would either do another phone interview or directly invite the candidate to our office for a personal interview.
After the first round of interviews, the scorecard looked something link the screenshot below. The numbers are the grades we gave the applicants for the competencies and experiences.
The goal here is to bring structure and objectivity into a traditionally very emotional and bias part of the process.
We used the same scorecard for both the phone interviews as well as the personal interviews, but reduced the amount of questions in the phone calls.
If you want to learn more about how to conduct structured job interviews (and if you don’t know what that means, you should!), I recommend the books Topgrading and Who.
4. Test drive and check references with the team
For the final 5–6 candidates, we would do test drive days. We would send them the same three assignments to prepare and present in our office in front of the C-level team, as well as their future direct reports (6–10 people). The workshop meetings took around 60–90 minutes and consisted of the candidates’ presentations as well as a Q&A. Afterwards, the candidates would sometimes do 1:1 talks with their potential reports or we would all go to lunch together.
Including the direct reports was very important for several reasons:
- More eyes in the room meant more different perspectives to discuss after the meeting. It’s easy for a candidate to fool one person, but it’s very tough to fool 6–7.
- It makes a lot of sense to include the team for their approval. Each member in the room could veto the candidate. This showed that we really took the employees’ input seriously.
- The candidate can interact with their future reports and do their own “due diligence”. I always found it very suspicious when candidates would not ask for this by themselves.
In the first COO search we would also include 1–2 board members and have them interview the final candidate as well.
After the test drives and final interviews we would do checks on references that the candidate provided, as well as contacts from our network who have worked with the candidate (if available).
When we found the perfect candidate the rest was just negotiating their compensation package and completing legal paperwork. Usually, at this point, the candidates were pretty committed and accepted the offer in both cases. We got very lucky with both applicants and were able to sign the candidates in under 4 months. As a rule of thumb I calculate 6–12 months from the start of the recruiting process to the time when the candidate actually starts. This includes the recruiting process itself as well as the notice given to the previous employer by the candidate (in our case, usually 3–6 months until end-of-quarter). I would add a further 6–12 months for the new COO to be properly on-boarded, trained and accustomed to be effective. Two more reasons to start recruiting early 😉
I hope you can use the methodology to hire a killer COO and drive your startup to the next level. If you enjoyed the content please clap up to 50x 👏 so that other founders can learn how to fill their open COO position as well 🙏🤓.
