Do you need a fractional COO? Take this easy test to find out.
Updated: Feb 18, 2020
The concept of fractional or part time executives is not new. It's common for CFOs, CMOs, and even CIOs. But fractional COOs are relatively new because the COO role is less well-defined. Business owners have thought either I need a COO or I don't. But the choice is no longer limited to that.
Here's a simple 5 Question Test to see if you need a fractional COO:
#1: Are you missing your growth targets? Or meeting them, but it's painful?
If the answer is Yes then it's time to look at 2 things: the targets and your operations. Maybe you're close but you need to tweak things to be more efficient or to focus on maintaining quality. In this case consider a fractional COO. If you're missing the numbers and you can't figure out why then you can start a conversation with a fractional COO. Depending on what you find, you might need full time help.
If the answer is No and growth is on track, congratulations you're doing great!
#2: Are your profits declining despite an otherwise healthy business and pipeline?
If the answer is Yes then it's time to look at 3 things: your cost of doing business, your pricing, and your operations. For professional services there are some common traps to watch out for such as failure to take advantage of rate escalations in your contracts, and letting the margin and compensation for employees get out of balance. Start with a fractional COO to assess the root causes. If you need a major overhaul for cost of doing business, you might need full time help on a temporary or more permanent basis.
If the answer is No and profits are great, pat yourself on the back!
#3: Is a key member of your operations team leaving?
If the answer is Yes then you need to mitigate risk. Start by identifying what it is they do, make sure those tasks don't get dropped, find the replacement resource, and train him/her. If you've been given only 2 weeks notice, that might not be enough to successfully manage the situation particularly if nobody has time to make sure the process happens. It's especially true for smaller businesses that tend to run lean where no one can simply absorb the duties of another person. This is the perfect project engagement for a fractional COO with the right skills who can come in, identify and document everything that the departing resource does, apply a critical eye to potential efficiency gains, perhaps cover the position briefly, and then train up and support the new resource until they reach self-sufficiency.
If the answer is No, excellent, you don't have to face this challenge right now.
#4: Are you hearing discontent from your employees?
If the answer is Yes then it's imperative to figure out what's at the heart of the problem. First look at 3 things: utilization, compensation, and fascination. You want employees fully engaged but not overworked. Compensation needs to be fair and probably more creative. Employees that are bored or not progressing in their careers won't be your strongest team players. If your back-office is not working well that inevitably affects all employees and leadership. Definitely have a conversation with a fractional COO to step you through the analysis. Depending on the root causes, you might need full time help.
If the answer is No and everyone is content, give yourself a high five!
#5: Have you lost the feeling of fun and excitement in your business?
If the answer is Yes then do yourself a favor and talk with someone you can trust. Usually this happens because things have gone off the rails somewhere and the business is not operating the way you envisioned. A COO can be the best type of person to talk with because they'll ask the questions that get to the bottom of operational problems, culture challenges, and seemingly inexplicable issues. Once you identify where you are and where you want to be, work with an operations leader such as a fractional COO to come up with a plan of action.
If the answer is No and business is awesome, do your happy dance because things are terrific!
Hartary Consulting strives to build great client partnerships by providing practical business operations advice to small and medium-sized companies.