When Does a Company Need a COO?

The Chief Operating Officer (COO) is one of the most pivotal roles in a company, yet not all organizations have one. Unlike other C-suite roles such as the CEO or CFO, the necessity of a COO depends on factors like the company’s growth stage, operational complexity, and the CEO’s strengths and focus areas. Deciding when to bring in a COO is a critical strategic decision that can significantly impact a company’s growth trajectory and operational efficiency.

This article explores the circumstances under which a company might need a COO, the role they play, and the signs that signal the right time to hire one.

What Does a COO Do?

The COO is often described as the second-in-command to the CEO, focusing on the execution of the company’s strategy and overseeing day-to-day operations. Their responsibilities typically include:

Optimizing operations: Ensuring systems, processes, and teams work efficiently.
Executing strategy: Turning the CEO’s vision into actionable goals and measurable results.
Leading cross-functional alignment: Bridging gaps between departments to maintain cohesion.
Scaling the organization: Building infrastructure to support growth while maintaining quality.
Problem-solving: Addressing operational bottlenecks and crises.

The role of the COO is highly adaptable and tailored to the company’s needs, which makes deciding when to bring one on board nuanced.

Signs Your Company Might Need a COO

1. The Company Is Rapidly Scaling

When growth accelerates, existing systems and processes often fail to keep pace. A COO is essential in scaling operations efficiently, ensuring that increased volume does not lead to breakdowns in quality, delivery, or customer experience.

Example:
A tech startup growing from 50 employees to 500 might struggle with onboarding, team alignment, and operational consistency. A COO can design scalable processes and build teams to support growth.

2. Operational Complexity Has Increased

Companies with intricate supply chains, global operations, or diverse product lines often require a COO to manage complexity.

Example:
A retail brand expanding internationally faces challenges such as localization, compliance, and logistics. A COO can oversee these operations, ensuring seamless market entry and consistent performance across regions.

3. The CEO Is Overwhelmed

As companies grow, CEOs often find themselves juggling too many responsibilities. This can dilute their focus on strategic priorities. A COO can take over the operational load, allowing the CEO to concentrate on vision, innovation, and external relationships.

Example:
A CEO who spends most of their time resolving internal issues rather than pitching to investors or shaping long-term strategy is a clear sign that a COO is needed.

4. Cross-Functional Misalignment Is Emerging

As companies grow, silos between departments can emerge, leading to inefficiencies and communication breakdowns. A COO ensures alignment across teams, fostering collaboration and unity.

Example:
A SaaS company where marketing, product, and customer success teams are misaligned on go-to-market strategies could benefit from a COO who can bridge these gaps.

5. The Company Needs to Build Scalability

When a company transitions from startup to scale-up, it needs systems and processes that can handle increased demand without sacrificing efficiency or quality.

Example:
An e-commerce company experiencing surges in demand during seasonal sales might require a COO to streamline logistics, optimize supply chains, and enhance customer support systems.

6. Strategic Execution Is Falling Behind

If the company struggles to execute its strategic initiatives, it might be a sign that leadership bandwidth is stretched too thin. A COO can ensure that strategies are translated into actionable plans and delivered on time.

Example:
A CEO with ambitious goals for product innovation but limited bandwidth to oversee R&D execution might hire a COO to focus on delivering projects efficiently.

7. The Business Is Preparing for Transformation

Major transitions—such as mergers, acquisitions, or digital transformation—often require the operational expertise of a COO to manage the change effectively.

Example:
During a merger, the COO can integrate operations, align teams, and create unified processes across the combined entity.

When Companies May Not Need a COO

While the COO role is critical in many situations, not every company requires one.

Flat hierarchies: Small startups with a lean team often have CEOs or founders directly overseeing operations.
Stable operations: If the company’s processes are well-established and require minimal oversight, a COO might not be necessary.
Specialized leadership: In some cases, other executives like a VP of Operations or a Chief Administrative Officer (CAO) can fulfill operational needs.

Timing Is Everything: When to Hire a COO

The decision to hire a COO is often tied to a company’s lifecycle and specific challenges:

1. Early-Stage Startups

In early-stage startups, COOs are rare. Founders often take on operational responsibilities. However, a COO might be hired if the startup grows quickly or needs operational expertise from the start.

2. Scaling Startups

This is the most common phase for hiring a COO. As complexity and growth demands rise, a COO becomes essential to build scalable processes and lead execution.

3. Mature Companies

In established organizations, a COO is often brought in to lead transformation, manage diversification, or support the CEO in maintaining operational excellence.

Skills to Look for in a COO

When hiring a COO, companies should prioritize these qualities:

Operational Expertise: Deep understanding of processes, systems, and scaling.
Strategic Thinking: The ability to align operations with long-term goals.
Leadership Skills: Experience managing diverse teams and fostering collaboration.
Problem-Solving Ability: Expertise in addressing inefficiencies and bottlenecks.
Adaptability: Agility in navigating changing circumstances and crises.

Case Studies: Companies That Benefited from a COO

1. Apple

Before becoming CEO, Tim Cook served as Apple’s COO. He redefined the company’s supply chain, enabling it to scale global production for devices like the iPhone.

2. Facebook (Meta)

Sheryl Sandberg joined Facebook as COO during its rapid growth phase. She built the company’s advertising infrastructure and operational processes, turning it into a global giant.

3. SpaceX

Gwynne Shotwell, COO of SpaceX, has been instrumental in scaling the company’s launch operations and building the infrastructure necessary for ambitious projects like Starship.

Conclusion: Does Your Company Need a COO?

Deciding whether your company needs a COO is about identifying gaps in leadership and operations. If your organization is experiencing rapid growth, increased complexity, or struggles to execute its strategy, a COO could be the key to unlocking its full potential.

Ultimately, the COO is more than just a second-in-command—they are the operational backbone of a company, ensuring that vision meets execution in a seamless, scalable, and sustainable way.

What challenges has your company faced during growth? Share your thoughts and experiences in the comments!