When contemplating hiring higher-level executives, you may come across acronyms such as COO's, CFO's, and UFO's. Okay, maybe not the last one (unless your companies are based in outer space.) These positions are part of a company's C-suite executives.
Common C-suite positions
The most common C-suite positions are CEOs, CFOs and COOs. Other C-suite positions can include:
- Chief Information Officer
- Chief Revenue Officer
- Chief Human Resources Officer
If there is a need, there's a c-suite position.
What is a COO?
COO's are the admin experts in a business. They are in charge of making sure the day-to-day affairs of a company run smoothly.
There's a reason why most people can't name a famous COO. These executives tend to handle the behind the scenes work.
COO's also can act as an heir-apparent to a company. A good example of this is Tim Cook at Apple. Tim Cook was the COO for the famous tech company and became CEO in 2011.
If a CEO creates a business plan, COO's are in charge of making it a reality one day at a time.
Does a company Need a COO?
The simple answer is no. A company does not need a COO. COO's are in decline. In 2000 the percentage of Fortune 500 and S&P 500 companies with a COO was 48%. This number fell to 36% by 2014.
If done right, though, a COO can save their CEO tons of time and money.
For example, sometimes a COO has needed business experience to execute its CEO's idea. Other times, the COO has skills that a CEO is lacking.
Should I hire a COO?
For growing companies, hiring can be difficult. Knowing when and how to hire, along with the right way to budget for hires, may seem like a big task. High-level executive positions are even more expensive. In the right circumstances, the prices can be worth it.
Consider getting a COO if:
- The day-to-day activities are taking up your time
Having a COO can take the stress out of administrative work. Many people start their company with an idea, but quickly get bogged down managing employees and taking on organizational issues. A common misconception is that COO's are only hired for CEOs who can't deal with the people's side of things. A CEO could be perfectly competent at dealing with the day-to-day, but sometimes their time is better spent elsewhere.
- You feel like you could benefit from more experience
COO's usually have many years of relevant business experience. A person's brilliant idea may be enough to build a company, but sustaining it requires a unique skill set. COO's can be a way for a new entrepreneur to take advantage of a seasoned expert's perspective.
- You have a hard time implementing your business plans
Planning and implementing that plan are two different things that require two different skill sets. A COO may be a way to get those ideas off the ground and make needed changes in your company.
- You've stopped innovating
A CEO's creativity is key. Unfortunately, it's easy to get bogged down by the logistics. If your creativity and time is zapped, hiring a COO could help lessen the load.
What makes a good COO?
COO's should be great bosses. As the head of administrative affairs, they must be able to work well with a team, implement plans and manage your business.
What is a CFO?
A CFO handles everything finance. They're in charge of budgeting, financial planning, analysis, and more. If a CEO has a business plan, the COO helps the team accomplish it and the CFO makes sure it's in the budget.
However, CFO's are getting increasingly expensive. A study published in the Wall Street Journal showed that overtime CFO's pay was increasing faster than CEO's.
Can I be my own CFO?
Yes. You may find yourself wanting to be your own CFO if you're a numbers whizz, you have time on your hands, or your startups are too new to take on hires.
Many companies don’t have a CFO, or have a team dedicated to the tasks a CFO would traditionally take on. This C-suite position can also be expensive with the 2021 median salary for a CFO being around $393,000.
When to Hire a CFO?
- You're hiring a huge financial team
Managing a finance team is one of the key responsibilities of a CFO. Because this executive position is so expensive, some startups opt to hire a team rather than a highly experienced individual. This can end up being more costly.
- Your company needs constant financial analysis
All companies could benefit from financial analysis. For SaaS companies, this type of analysis is essential. CFO's are in charge of all kinds of financial analysis. They can create reports and bring you the lowdown, so you are informed from your data without spending time on the calculations. Many companies need constant analysis to see trends. For example, three months of high customer churn could mean something is wrong.
- You're not a fan of math
Look, I don't blame you. Even if you got straight A's in your college economics course, you may not be a fan of spending your time creating your company's profit and loss statement.
- You need to plan for taxes or loans
Many companies need loans, but paying these off, while trying to grow your business can be tricky. CFO's can handle everything from business loans to taxes.
Causal can help you grow your business. Our revenue based hiring template can outline when to hire based on your changing revenue. We know your company is expanding, and our templates look into the future so you can make the best decision now.
If you do decide to grow your company, our templates will make financial reports simple for your CFO, or help your COO choose when to bring on new hires.
With clean and simple models that adjust in real-time, your whole team can stay on the same page.