Why Your Small Business Needs a COO to Manage Operations

The Chief Operating Officer’s (COO) role is supremely important as Operations are the engine of any organization. Good operations ensure that your customers’ experience with your products and services remains top-notch, free from quality compromises.

As a small business owner, you may have overlooked the importance of defining Operations in your company. Now that customer demand is growing, you’re realizing the gap that this oversight is causing. This is where Maria Jones can offer support.

Maria Jones is the founder of Nerdy Industry, a company with a vision to support budding entrepreneurs at any age. Her target market is incidental entrepreneurs where she provides fractional COOs for new startups.

She is also the Director of the Atlanta Chapter of the COO Forum, an international peer-to-peer professional networking organization where COOs can learn from one another. The organization’s purpose and mission embody the old adage, ‘’Iron sharpens Iron.”

This article summarizes insights Jones recently shared with Equilibria founder Alicia Butler Pierre on the Business Infrastructure Podcast. She defines Operations, explains why COOs are critical hires for small businesses, and offers three key metrics to monitor your business’ operational health.

Defining and Unraveling Operations

Running and managing the day-to-day activities required to fulfill customer orders and obligations requires operations. As such, Operations encompass back-office activities and are the core of any business.  Operations bind and stitch all functional areas of a business. Considering its criticality, sadly it is mostly overlooked by startups who tend to focus exclusively on marketing and sales.

If Marketing is about the what of your business, then Operations are the how. Operations detail the specific actions required to produce a product or provide a service along with all of the other administrative functions (i.e., Accounting, HR, IT) to generate a streamlined, positive customer experience.

If your business operations are succinctly managed, it positively affects everything in your business regarding revenue generation. Poor operations can affect your product development and mar customer experience.

As Butler Pierre explains in her HubSpot article (Marketing vs. Operations: The Battle for an Entrepreneur’s Attention), Operations aren’t necessarily seen, it is experienced. And well-executed operations are recipes for excellent customer experiences.

What is a COO?

The COO is second in command to the CEO. When structured properly, the COO acts as the liaison between the strategic vision set forth by upper management and every part of the organization, from sales and marketing to finance, technology, compliance, and HR. COOs are critical in getting things done and adding to the bottom line of an organization. They are the powerhouse of a business that continues to pump value and generate revenue.

Jones describes the relationship between the CEO and the COO as, “The CEO is the visionary while COOs are the innovators of execution.” COOs work to manifest the vision of a business into tangible reality through proven frameworks like business infrastructure, continuous improvement, and Total Quality Management. In other words, if the CEO is the strategist, then the COO is the implementer.

If you want to learn more about a COO’s role, then check out these resources Jones recommends:

Key Operational Metrics

Rounding out Jones’ explanation on the importance of COOs and operations are three key metrics she also recommends. Though there are many industry-specific metrics to measure the health of your company’s operations, these metrics apply to any company.

1. Customer Satisfaction: The 3 Point Scale

Jones describes a 3-point scale she uses to score a customer’s satisfaction that’s based on their direct feedback and experience.

2. Quality control

Is your product and service delivery consistent? The COO has to consistently monitor quality over time. This can be done with the right systems and tools (like Lean Six Sigma) to track efficiency and eliminate waste and redundant processes.

3. Employee Satisfaction

Operational excellence requires committed partners of innovation – your team members. You need a team of people who are willing to embrace the changes required for continuous improvement. They must believe in your strategy and understand how to achieve it through operational tactics. This is why it’s so important that COOs include people at all levels of your company as well as your ecosystem of vendors and suppliers in critical decisions impacting business operations. Take surveys to gauge their experience. If your team isn’t buying your ideas, it will result in lost efficiency, retention, and customers. You need to ensure that your processes are not damaging your employee’s morale and passion to deliver.

Final Thoughts

The COO is at the helm of overseeing an organization’s operations. Business operations involve the detailed activities required to deliver positive customer experiences that build brand loyalty. For that reason, every small business should have a COO or someone who is in charge of shepherding the relationships of the organization internally to continuously and consistently deliver products and services.

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