As growth-stage investors, Revolution Growth is always prowling for companies traversing the business-model validation threshold and shifting into hyper-growth. If you're a growth stage founder/CEO facing this inflection point for the first time, your day-to-day work pace is about to get insanely hectic.

If you are wondering whether it's time to recruit a COO, here are five signs you're ready:

1. Instead of spending time growing revenues, transforming operations, or pushing product boundaries further, you're resolving disputes among your functional direct reports.

During hyper-growth, the volume of new opportunities both expands and accelerates. Suddenly top-tier developers that previously seemed uninterested become readily available, channel partners for whom you were once too small now want to pitch you in your offices, and future strategic acquirers produce a phalanx of alluring business development ventures for you to consider.

In these situations, even the most cohesive team will be pitted against one another for resources. Without a COO, guess who gets to spend all of their time picking winners and losers?

2. You start noticing the flow of actionable, transformative ideas from your team is slowing down.

This occurs because the same thing that's happening to you is happening to them. Rather than executing strategies, your team is trapped negotiating tactics within their functional disciplines. If your direct reports spend all of their time simply trying to allocate scare resources amongst themselves to manage the chaos, they'll have no space to push groundbreaking ideas upward.  

3. Your business is expanding faster than the forecasting discipline required to optimize it, preventing you from accessing a more demanding tear of financiers, suppliers, and customers.

This is a sure sign the company has reached a scale whereby if the right people were in place to provide confidence in the company's ability to deliver on its promises, potentially game changing new partnerships would be attainable.

4. You continue to produce a multitude of great ideas, but neither you nor your team has the bandwidth to follow up on them.

If you're operating without a formalized senior-led process to evaluate, compare, and prioritize new initiatives, chances are there's either no follow through or only the most fanatical sponsors have the grit to pursue their ideas, irrespective of whether or not those ideas are the right ones.

5. Increased business complexity and a faster pace exacerbates communication asymmetries.

Communication blind spots lead directly to slower decision-making, missed opportunities, or, most lethal of all, dysfunctional power dynamics in the organization. If good COOs do anything, it's to serve as a traffic cop, directing and synchronizing decision-making and avoiding information-based logjams.

Collectively, the considerations above redound to you, how you manage your time, and how you measure your effectiveness. To survive and thrive, the most disciplined founders and CEOs we know are uncompromising about allocating their time to actions that only they can do, particularly customer-facing activities where the CEO's imprimatur is most impactful.

The founding CEO role can be a lonely job, especially if you don't have a co-founder who's still active in the business. The right COO can become the closest person there is to a true peer in the company, someone whose span of control and visibility is comparable to your own. The right person enables you to bend the same branches you've always leaned on for support without breaking them.

While your role may lean toward strategy and evangelism and theirs favors execution, they're likely the only person riding shotgun in the same car, looking through the same windshield, at the same view. Together, you can deliver on the promise of value creation that hyper-growth offers.

Published on: Nov 14, 2019