Did you know that a Chief Operating Officer can run most business functions, making them the most efficient and effective tool for any growing business with a limited budget?
An early-stage COO is, on average, responsible for about 7 different business functions.
From the anecdotal experience of my peers and me, this usually covers HR, Legal, Finance, Fundraising, Sales & Marketing, Product, and Engineering.
A COO can be responsible for such a broad range of disciplines because they're also responsible for the business's Strategy - aka turning the Founder’s wild and exciting vision into a reality - which has implications for all departments.
In this new series of posts, I'll break down how a COO does this - how do I, a detail-oriented completer-finisher with an unbridled love of spreadsheets, turn a creative, forward-thinking, relatively nebulous idea into a structured and realistic roadmap for success (and how I keep the entire company following that roadmap).
We’re going to follow the same 6-Point Strategy framework that I developed for my best-selling book How To Write Your Strategy. If you’re (like me) someone who likes to read ahead, you can get the whole book for 50% off here for the next few months using code SUMMER24).
All the articles in this series
In the first two articles in this series, we looked at how your end goal for a business can impact even your earliest decisions, how important a Mission Statement is to a company’s success and how a COO can help you through the hardest bits of pinning both of those down.
In this post, we’re going to look at your company’s Objectives - what a good Objective looks like, why they’re important, and how a COO can help pin a Founder or CEO’s wild, ambitious vision down into something that’s inherently quantitative and measurable in order to increase your likelihood of hitting your goals and efficiently growing your company.
Below is the Pay As You Go COO 6-Point Framework for a Strategy that I developed for my best-selling book How To Write Your Strategy. We’ve been working our way in from the left-hand side.
What does a COO do in an early-stage company? How a ‘vision’ gets turned into a ‘reality’: how to design objective Objectives.
In the Pay As You GO COO 6-Point Strategy Framework, Objectives are always quantitative in nature. I see lots of companies with OKRs that open with a subjective; they have an Objective that doesn’t have a clear numerical value against it (e.g. “Expand Market Presence”). My experience has shown us that this isn’t a great starting point for success.
Here’s why.
Successful businesses are built on clear communication and quantitatives are the building blocks of clear business communication.
A quantitative and objective measure of success is one that has only one clear definition, there’s no ambiguity. The clue here is in the name - your Objectives should be objective.
Think ‘you need to achieve a score of at least 8 out of 10’ versus ‘you need to achieve a good score’. The first is quantitative and clear, you can be objectively certain whether or not you’ve achieved an ‘8’. The second is qualitative and open to interpretation, with one person’s ‘good’ being an ‘8’ and another person’s being, say, a ‘6’.
If you want to efficiently achieve results in your company, you need to be clear with everyone involved what good looks like or you’ll end up wasting resources because people are chasing the wrong goals.
I also believe, from my years of experience implementing business Strategies, that there should only be two Objectives in your Framework. And this is especially true at the earlier stages of your business’s journey.
You can only do one thing at once and, when you’re first starting out, you’re very likely working either alone or with a very small team. By setting yourself fewer Objectives and having all of your work point towards them, you’re forcing yourself to focus only on the most important things that you can be doing right now and you’ll stop yourself getting distracted by shiny new ones.
Those two Objectives should take a set form.
One is your revenue or profit goal - the amount of money that you’ve calculated in your Financial Plan that you need to bring in to cover the operational costs and generate the required profits.
The other is where the Mission Statement really comes into play. It’s a measure against that revenue that’s driven by the Mission of the business.
You can make revenue in lots of different ways but only some of those ways will be in concert with the values of your business and with the Mission Statement that lays out those values. I’ll explain this further in the next section.
How can a COO help you write your Objectives?
It’s really, really hard to pin your entire business down into two key numbers that you want to hit. But, I promise you, it’s even harder to try to run a business that has a million different priorities.
In organisations with this kind of split focus, everything feels like a priority - and that means that nothing actually is.
Having too many Objectives leads to confusion amongst your team about what good really looks like, which, in turn, leads to poor attempts at performance management, then disgruntled employees, reduced output, decreased profit margins, and a greater reliance on external cash to keep your business afloat…
If you can avoid all of that pain by implementing two simple numbers, wouldn’t that be great?
A COO’s role in helping a Founder or CEO to set a company’s Objectives mostly involves being able to design a quantitative measure out of pretty much anything. I always tell my clients that if something moves or makes a sound, I guarantee I can stick a number on it that can be measured.
CEOs or Founders come to me with a big, sweeping, exciting vision and I go back to them with two numbers that measure if that big, sweeping, exciting vision has been achieved.
It’s obviously much easier to do that for your Financial Objective because finances are already mostly about numbers (please don’t tell any accountants I said that, they’ll make me talk about statutory filings). It’s a relatively straighter path from a vision to set a revenue target or a profit margin as your Financial Objective.
When it comes to the Mission-Led Objective, the one that helps you make sure you’re delivering that revenue or profit growth in a way that’s in-line with the values your business is trying to uphold, it becomes a little trickier.
But far, far from impossible in the right hands.
Say you’re a fan of Amazon and you want to build the most customer-centric company in the world. That could make for quite a simple Mission-Led Objective - choose something like an NPS or CSAT score that holds you accountable to making you money in a way that allows you to maintain good feedback from your customers.
Perhaps you want to build the ‘best’ tool for helping a customer achieve xyz. What’s a sign of a tool that’s really fulfilling its purpose? Perhaps it’s a retention figure or it’s daily or monthly active users - something that indicates that your Product team is building and deploying the right features to help a customer achieve their ultimate end goal.
In both of these scenarios, the COO’s role is to help the organisation tease out from the Mission Statement a quantitative measure of success and then, subsequently, help them to set the right mile-markers towards that goal and to commit to completing the right pieces of work to move the needle on those numbers.
Why should I care about Objectives?
I feel like a lot of books have been written on the importance of OKRs in the years since the notion of ‘MBO’ (Management By Objectives) was developed at Intel (in the 1960s by Andrew Grove, Intel’s first COO - thankfully proving my point that a good COO has a good love for a clear Objective).
I won’t rehash all that’s already been said, except to say:
If you don’t know, truly, where you’re going, how will you ever know if you’re on the right path to getting there?
What's next?
In the next part of this series (coming next week), we’re going to look at the next step in the Pay As You Go COO 6-Point Strategy Framework - the Key Results. These are the tools for setting smaller, more immediately achievable measures that tell you that you’re en route to your big Objectives.
In the meantime, if you want to read ahead and learn more about Key Results via some great examples, get your copy of How To Write Your Strategy for 50% off using the code SUMMER24 here.
If you’re a Founder with big dreams and you’re looking for a partner-in-crime who can make those dreams happen, we should chat. At the time of writing, I’m currently taking calls with prospective clients for both Business Coaching and Fractional COO services (though I only take on 2 Fractional COO clients at once, so you need to get in there quickly).
Book a free, no-strings chat with me here:
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