The Three Types of COOs

About a year ago, I ran into a founder CEO friend of mine. His company was in the middle of rapid scaling and he mentioned he was thinking about hiring a COO.

“Oh, what kind?” I said.

There was a long pause.

“What do you mean, what kind? I just have the feeling that it would be good to have help.”

The role of COO can mean many different things. As I’ve said before: no one quite knows what a COO does. So as I started to interview COOs, I took notes on their core responsibilities. Over time it became clear that there are three main COO archetypes.

Operations

The first archetype is operations. This may seem like a silly thing to say, that a COO is responsible for operations. But depending on what the company makes, it’s not. Many companies don’t have operations at all. What is operations for a Saas platform? And even for those that do, what that person is responsible for can vary a lot.

For example, I interviewed a COO of a satellite company. His teams have included spacecraft production, supply chain quality, manufacturing (including their in-house machine shop), and the information systems behind those. That’s a very specific set of operations for that particular business.I was worried when I interviewed this person that his experience would be so different than mine that we wouldn’t be able to relate. About halfway through the interview we started talking about unnamed work, and it turns out he does almost all of this for their executive team, so it turned out our roles were much more similar than I had imagined.

Of those I interviewed, the majority of COOs that fell into this archetype work in healthcare. The reason why is that a lot of work in healthcare is mediated through humans. These COOs jobs were to hire and scale these high headcount teams, in call centers or physical delivery locations. Their teams are often comprised of hourly workers and the workforce is notably different than the rest of the company. From a headcount perspective, sometimes these COOs manage 60% to 80% of a company.

One thing multiple of these healthcare COOs mentioned is that they were responsible for carrying the separate culture of their teams. An employee in a health care call center in a rural or exurban area is not going to immediately relate to a lifetime software engineer in an urban office. These COOs sometimes run separate all hands, value reward systems, and rituals from the rest of the company. They serve as a sort of cultural crosswalk.

Sometimes, these folks even have a different title: Chief Operations Officer instead of Chief Operating Officer.

For this category of COO, the core metric that these leaders are responsible for is gross margin, or something adjacent to it: COGs, efficiency, cost reductions, etc.

G&A

This is the least frequent type. G&A COOs manage a portfolio of functions that could include: IT, Workplace Facilities or Real Estate, Finance, HR and People, Government or Regulatory Affairs, Procurement, Compliance, RevOps, BizOps, Legal, Data and Analytics.

This version of COO is sort of a descendent of the title CAO, Chief Administrative Officer. Surprisingly, this title has little written about it. From what I can find, it came to prominence in corporate America in the 1990’s, starting with companies like Gap. It’s most common in banking and then healthcare, perhaps because of regulatory burden in those areas. But there are a few notable examples in tech from semiconductor companies (NVIDIA, AMD, Intel).

It seems that the CAO title has mostly dropped out of favor, and maybe that’s why these COOs have the title they do.

This type is responsible for resource utilization, broadly interpreted, meaning ensuring total overhead costs are optimized. So it’s essentially operating margin.This is distinct from COGs as it’s the supporting functions, which impact operating margin instead of gross margin.

GTM

The most familiar pattern in the valley is a COO who is essentially a CRO+. This model was made famous by Sheryl Sandberg (Facebook), George Hu (Twilio), and later Claire Hughes Johnson (Stripe). These folks built revenue organizations while their founders focused on product and engineering.

Perhaps this is most common because many founders and CEOs are product focused or otherwise technical, and they pair up with someone who can help them scale the machinery of revenue.

This type’s core metric is obvious: revenue and revenue growth.

They are responsible for all or most of the five functions of go to market: marketing, sales, customer success, partnerships, revops. Sometimes they had customer support, but only about half the time.

All Together

Some of these categories get blended in actual startups. I had a COO role that was half G&A-type and half GTM-type.

To illustrate, here’s how I see the COO landscape now.

I’ve drawn this visual for a handful of CEOs now and most have found it useful as they think about hiring. It’s helpful if you’re in the role, too.