At a Glance
- Before you compare advisors, decide whether you need one at all, what you want them to do and which outcomes they are responsible for.
- A consultant suits facilitation or a short-term document, a fractional COO suits a problem you want solved, and a full-time COO suits a business big enough to support one.
- Choose someone you trust, who has faced a comparable situation and has learned from what went wrong.
- Give them real authority. If every decision comes back to you to sign off, you are paying to defer decisions.
- Agree up front how the work ends, expect to renegotiate if the scope changes, and decide what information they can see.
Before you compare advisors, think about whether you really need someone at all. These are the points to settle before you hire a consultant, a fractional COO or a full-time COO.
Do you really need an advisor?
Start by deciding whether you need someone, what you want them to do, and which outcomes they will be responsible for.
Start by deciding whether you really need someone, what you want them to do, and which outcomes they will be responsible for.
Know this before you hire. You will be happier if you know what success looks like in a year or six months, or whatever the time frame happens to be.
In my review of Cameron Herold’s The Second in Command, I wrote that Herold asks a CEO to do an honest inventory of their own tasks, to understand what the CEO is actually willing to give up. Hire toward your gaps, not your comfort zone.
Do you need a consultant, a fractional COO or a full-time COO?
It depends on what you need. A consultant suits facilitation or a short-term document, a fractional COO suits a problem you want someone to come in and solve, and a full-time COO suits a business large enough to support one.
A consultant is great when there are significant differences of opinion and you need someone to cut through the noise. Say your directors of strategy, operations, marketing, sales and production are all disagreeing. A consultant can hear everything, describe it back, and find where people are saying the same thing with such different words that they are not hearing it.
A consultant also suits a short-term deliverable, such as a strategic plan, a document or a strategy. Your people may be great, but it is not their area, or they have too much on the go.
In my experience, consultants often do the research and the interviews, then give you a plan. They describe your issue back, build a great plan and facilitate great meetings, but they don’t actually stick around to do the fix. Tech consultants are different: they build the tool. In my experience that can come with a never-ending series of meetings, and it can take months.
A fractional COO comes in, works out the problem and does the work. As I wrote in What Is a Fractional Executive?, a fractional executive is accountable for results, not just insights. They are not there full-time, and how much time varies: ten or 20 hours a week, five hours a week, or 15 to 30 hours a month. It depends on what is needed. Go Fractional’s rate benchmark for COOs puts a typical engagement at about 12 hours a week, which sits inside that spread. For what it costs in Canada, see fractional COO vs hiring full-time in Canada.
They come in, they step in, they do the thing, they step back. Fractional fits when you have specific problems that need solving as a short-term thing, or you just want that layer to see what is happening, or you cannot afford a full-time COO but you do need some support.
A full-time COO sits above your directors, who are each specific to their field: operations, sales, production, marketing. They see what is happening across all of the areas and make sure the business moves in one direction, not four, five or six. You may need that when the business has grown a lot and people are siloed. In Canada, PayScale lists an average base salary of about C$143,000 for a COO, before bonus, benefits or equity.
A full-time COO is a big commitment: salary, benefits and potentially equity or bonuses. The business needs to be in a sweet spot to support it.
What should you ask before you hire?
Ask whether they have handled a comparable situation, and what they learned from what went wrong.
Ask about comparable situations, and about what went wrong.
Ask whether they have come across a situation like yours, not necessarily the same, but comparable, and how they handled it. Then ask what they learned from what went wrong.
Look for a learning attitude: someone who applies their learnings from their own experience or from other people’s experience to a problem, so you don’t pay to reinvent the wheel every single time. Ask what they think about X, Y or Z.
How do you know you can work with them?
Look for trust, shared core values and different experiences. Your COO ought to be your person, even fractionally.
Your COO ought to be your person, even fractionally. Look for alignment in core values and ideologies. Different experiences help you each see things differently.
Check the vibe. Can you trust them? Could you have a conversation with them, grab dinner and talk about what is happening? Could you call them late at night with a crazy idea, or when you have finally found the words for the problem? Do you feel confident and comfortable in that person?
What authority should they have?
Enough to get the work done. If you don't give a fractional leader authority, you might as well not hire them.
If everything has to come back to you to sign off, you are spending money to defer a decision. If your team can go around them to get decisions overturned, you have taken their authority away. You have hamstrung them, and you might as well stay the bottleneck you currently are.
You can phase it. You can set checkpoints, for example when a decision reaches a certain dollar amount or affects jobs. Lay out which decisions you are comfortable with them making on their own, and at what stage. A RACI works for everyone: who is responsible, accountable, consulted and informed.
For the decisions you are not ready to hand over, book time on the calendar that stays sacred, so you can discuss and sign off together.
What should you agree before they start?
Agree what you are asking for in time and in outcome, what happens if the scope changes, and what information they can see.
Time and outcome are both part of the ask. How will you know when you have reached the outcome? Will you get progress reports? What does it look like when you wrap it up?
Scope can creep. If the work you asked for was X and it has become XYZ, the contract needs to be renegotiated. It is tempting to take XYZ for the price of X. Expect your COO to ask for the contract to change, or to say that something else can’t be done. A price set before the problem was understood may also be something you can renegotiate.
Think about how much access they will have to your information. Do they have access to your CRM? Will they see your customer list? What are their obligations around data? Be prepared to ask them to sign something, such as a non-disclosure agreement or a privacy form, when they have access to your customers’ information.
You may also want to add to your risk register that you have brought in someone fractional. They are not there all the time and they are dealing with multiple customers, which perhaps increases the risk of information being sent to the wrong party.
What are the warning signs of the wrong advisor?
A rushed hire, an expected quick fix, and responsibility handed over without authority.
- You hired fast because someone told you to. A referral is great, but make sure the person vibes with you.
- You think it will be solved in a couple of days.
- You are paying more than you can afford, or you are not ready yet and you hire because a funder, donor or investor said you should.
- You think you won’t have any responsibility anymore. A good COO frees you to do other things, but you still have to do the things.
- You delegate too much too fast, or you delegate responsibility without authority.
- You don’t hold your COO accountable, or you haven’t defined the outcomes.
- A price was set before the problem was understood. That’s a problem.
If it was going to be solved in a couple of days, you wouldn’t need it taken off your plate.
If you founded the company and hired the team, it is hard to see the forest for the trees. You see the individuals and the memories of them, not what is happening today.
Does your industry change who you hire?
It can. If you need someone's certification to be compliant, a fractional hire may not cover it.
Some industries have compliance requirements. If you need someone’s certification to be compliant, such as a first-class engineer for a power plant, having them fractionally may not be enough. Be clear about what you need from them, and do your research. Contact your insurance and the regulatory bodies that apply to you, and ask the compliance questions up front. They matter more than people think: you need to know that what you want to do is doable. Keep checking what the requirements are. Otherwise it matters that they understand your business.
Hire toward your gaps, not your comfort zone.
I also wrote about how to choose an AI advisor for your Canadian business and fractional advisory services in Canada: types, costs and how to choose.