If you are a CEO. How do you know if you are ready for a COO?
There are four areas of readiness.
The first area is financial readiness. If you can afford to bring on another person. There are some tests that you can do to work this out. It can be by putting money aside, enough for the salary of that person, a couple of months before you bring them on, test if you put that money aside in a different account that can the business still work without missing that amount of money no longer being spendable in your budget.
If you can put that money aside for a couple of months each week or each month, then it also creates a little bit of a buffer. With that buffer, you can calculate how much time the new hire would take off your plate and X that time by your own hourly rate. Maybe you've never worked out your hourly rate. How much time do you spend in the business and divide that by the amount of income you take from the business and then you can find out what your hourly rate is. If your hourly rate is more than their hourly rate, then it's usually going to be saving you money, and you can spend that time on higher income-generating tasks. The next test is just knowing what extra outcomes and their respective numbers or metrics they are going to be responsible for and will therefore be increasing once they come on board. If that number is for extra sales, for example, their sales would need to cover their wage and that would be their KPI (Key Performance Indicator) if it's what their role is responsible for.
The second area of readiness is psychological. This is about being ready to let go of some control. It does take trust to do this and you can build up that trust. You don't have to give up all your control at once, but you are going to need to be able to find a balance of control versus freedom and also be okay with not being needed constantly in the business. Not getting gratification of being the superhero of the business, if you're finding you like to be around just for when something goes wrong in the business so you can swoop in and fix the problem. You now have somebody on the team who it's their job to do that.
If your team does need you, of course, they'll bring you in and that's fine. But don't get in their way. They are very capable of being able to also go in and fix the problems in the business too. So be ready to let go of being needed constantly in that sort of capacity.
The next type of readiness is lifestyle. Are you ready to work fewer hours? Your role in your business will be changing. You'll be doing different tasks now that you are bringing somebody else in. You could have more time at home. Maybe you are looking to start another business idea, another side hustle, or even a new hobby or something. But be ready to know what you're going to be spending the extra time on in your business. Otherwise, you might find yourself lost and inserting yourself back into areas of the business you didn’t need to be in.
The fourth is your unique ability of readiness. You need to know your strengths, what tasks you want to keep and what your zone of genius is, and also what your COO’s zone of genius is so you're not stepping on each other's toes. Be mindful that there is a difference between your zone of excellence and your zone of genius in that your zone of excellence is quite often the tasks that we are quite good at and we can do because we are capable. Maybe we've done it in the past but it doesn't mean that is where you should be spending your time.
Just because you're good at it doesn't mean somebody else can't be too. So being ready to let go of the tasks that are not your zone of genius, and being ready to lean into the unique ability that you bring to the business, it's most probably what your business’ reputation was built on, plus being able to let go of holding onto the pieces that are others strengths.
So when do these four points of readiness happen? It can quite often be an internal trigger or it can be an external trigger. An external trigger might be a life event, like having a baby or maybe a health scare. It could be because of the fast growth of the company. It might be that you just happen to meet the right person to become your COO and you have a good feeling about that person. Or it might be just a self-awareness that it is time to make a change. All of those work together and you'll know when the right time is the right time. Don't fear making a leap or jump because it's going to lead to good things.
If you think it’s time to hire your first COO and you’re looking for the right person, reach out to us, I have a great network of super capable and talented COOs I can help you to get in touch with.