Fractional COO Services

Without solid leadership driving their strategies and operations, an organization can risk catastrophe in the face of new challenges that arise—as they  often do. Among the mission-critical roles for nonprofits or small businesses operating in virtually any industry is the chief operating officer (COO).

That being said, it can be difficult to know who to hire and exactly what the COO’s role in your organization should entail. 

One way small companies and nonprofits address their staffing and leadership needs is through fractional executive services, including COO as well as chief information officer (CIO) and chief technology officer (CTO). In this article, we’re taking a deep dive into one specific role—that of the COO. We’re going to answer many of the most popular and pressing questions, so you can better determine whether onboarding a fractional COO might be the right move for your organization.

To get you up to speed, we’ll answer the following questions, among others:

• What is a chief operating officer? 
• What is a fractional executive, and what does a fractional COO do?
• When does it make sense to hire a fractional COO?
• What should I look for in a fractional COO candidate?

What Is the Main Role of a COO?

An organization’s COO is a senior executive whose primary responsibilities include overseeing  day to day business operations, including administrative, operational, and other functions. They typically serve directly beneath the chief executive officer (CEO) or president, so their specific responsibilities will be closely aligned with the CEO’s own prioritized needs. 

Chief of Staff vs. COO: What’s the Difference? 

While many of their responsibilities might seem to overlap upon review, there is a key difference between these two distinct roles. That difference ultimately comes down to the organizational chart and to whom each of these professionals primarily reports. 

• A chief of staff serves as a leader’s right-hand strategic partner. In their role, they will potentially weigh in on general operations, manage projects, develop and vet strategic plans, help with change management, and more. Ultimately, the chief of staff supports the president or CEO, enabling and empowering them to be the best and most successful leader possible.
• A chief operating officer is interested in many of the same issues, but their primary focus remains on the business as a whole. They will work closely with department heads and leaders throughout the organization, helping to make operations more efficient and effective. They’ll gather input, drive collaboration, and generally ensure that all business decisions are well-informed and all employees, leaders, and other stakeholders are positioned for success.

What Is the Role of a COO in a Small Business or Nonprofit?

Among the most important roles and responsibilities of a small business or nonprofit COO include the following:

• Overseeing HR and staffing functions, including recruitment, hiring, and onboarding. In many small organizations, the HR director reports to the COO.
• Keeping the business focused on defined goals, essentially serving as the bridge between an organization’s documented business plan and the  delivered outcomes Among other things, the COO helps to align goals with wider marketplace conditions, to ensure positive outcomes. 
• Maintaining the organization’s budget, as a key part of overseeing general financial operations. The COO is often involved in high-level decision-making, with financial department heads reporting to the COO.
• Overseeing administrative functions, through the implementation and monitoring of overall operations, including specific administrative functions not assigned to other executive-level roles.
• Fulfilling a second-in-command role. Since the COO  serves as the go-between for the CEO and other department heads, they are typically “in the know” regarding most of an organization’s operational details. This positions them as the CEO’s successor, should one ever be needed.

What Does a COO Do, on a Day to Day Basis?

This question is difficult to answer, since every organization is different, with unique personnel and goals. Every company has different, and dynamic, needs to consider—meaning a COO’s primary value to a company might shift from one quarter to the next, for example. 

At the end of the day, it truly depends on the organization’s current state, strategy, needs, and goals. It’s been suggested that “asking the question ‘What makes a great COO?’ [is] akin to asking, ‘What makes a great candidate for U.S. Vice President?’.” Not knowing the country’s current political landscape and challenges—let alone knowing who the presidential candidate is and what their priorities are—picking a vice presidential candidate would involve a certain degree of uncertainty. Achieving a good “fit” might occur as a happy accident, but otherwise it would largely be guesswork.

How does this specifically relate to the COO’s role? Well, the COO’s role isn’t actually too different from that of the country’s Vice President. And depending on the president or CEO’s priorities, leadership style, and strategic inclinations, the COO’s role morphs: “In many cases, the COO is there to help make the CEO’s vision a reality. Sometimes, the COO is expected to make the CEO more effective or more complete.”

For a deeper understanding of the day to day role of a COO, this Harvard Business Review article goes into much more detail about how a COO works within a specific organization’s framework. 

What Is a Fractional Role, and What Does a Fractional COO Do?

When referring to an executive-level hire, a “fractional role” is appropriately named. A fractional executive—whether in a CIO, CFO, or COO role—is a professional hired to fill the role for a fraction of the time a full-time, conventional executive would work. It often helps to think of a fractional executive as serving on an interim or short-term basis, essentially functioning as a tactical COO consultant.

In terms of roles and responsibilities, a fractional COO does the same type and scope of work as a conventional, full-time COO. This means there often won’t be much variation between a normal COO and fractional COO job description regarding the daily work you would be bringing them on board to perform. It would, of course, need to be clearly stated within the job description whether you’re looking to hire a full-time or interim/fractional COO.

How the “Life Cycle” of a Fractional COO Impacts Their Responsibilities

One key point of differentiation between a conventional, full-time COO and a fractional COO is the nature and tenure of their employment. When an organization hires a full-time COO, they are looking for ongoing and indefinite services—for the executive to become an integral part of the organization’s present and future. 

By contrast, a fractional COO might be hired with not just a start date but an end date as well, as an interim hire. This means their responsibilities would  primarily include how they integrate themselves into the organization initially, as well as how they hand the reins off to make their exit when their employment period concludes.

As such, some of the most commonly-sought after fractional COO services include day-to-day tasks and duties related to effective change management, such as:

• Examining company operations to increase operational effectiveness.
• Formulating a workable strategy and carrying out the required implementation procedures.
• Enhancing operational procedures through process improvement.
• Enhancing your resources for a secure future via organizational development.
• Improving your investments in inventory and logistical infrastructure.
• Guiding you through changes to the organizational structure.
• Managing risk to identify and reduce hazards to profits and capital.
• Determining and evaluating KPIs and performance metrics.
• Creating a long-term vision for a safe departure.

During times of transition or growth, a fractional COO might be brought on board in a role best labeled as a “change champion,” as they’ll help to “define needed changes, lead the change effort, manage the change, and even celebrate change success.”

When Should You Hire a Fractional COO?

This is perhaps the most important question to consider, as timing can have an impact on budget considerations and how aggressively an organization can grow or change. Since the COO works closely with other organizational leaders like the president or CEO, their specific priorities are the most important considerations.

So, how do you know when it’s appropriate or advisable to hire a fractional COO? It starts with determining your exact needs—and defining how pressing they are. 

If, for example, the president or CEO is feeling overwhelmed and unable to give every critical decision their complete focus, bringing a fractional COO into the fold could provide stability and organizational or strategic insight. When a COO’s services, expertise, and experience are needed but the budget or other restraints preclude hiring a full-time executive position, then a fractional COO would make sense.

Benefits of Hiring a Fractional COO

There are many benefits to hiring a fractional COO, which include—but go far beyond—budgetary concerns. Again, considering the “lifecycle” of a fractional COO helps us to better understand their benefits. Since they’re employed on an interim-type basis, fractional COO positions can offer the flexibility of remote or on-premises work, with shorter hiring and onboarding processes (as compared to full-time, conventional executive positions). And since they’re typically brought on as an hourly or contract employee, fractional executive compensation doesn’t need to include the same level of benefits or incentives as other full-time positions.

Hiring a fractional COO or other executives is also less risky than starting with a full-time COO. Not only is their employment temporary, it’s temporary by design. Here’s how one expert sums up the unique opportunity and its benefits:

“The fractional COO is there to work themselves out of a job — they focus on building your company so you can truly afford a full-time COO in the future, and they can even help you find and hire their replacement.”

How Much Does a Fractional COO Cost?

Because they often work according to an hourly fee structure (as opposed to a conventional chief operating officer salary with extensive benefits, for example), fractional executives can provide excellent cost-savings and increased ROI for small businesses, nonprofits, or other organizations with limited resources. While exact compensation figures are difficult to come by, the average rate for fractional executives ranges between $6,000 and $10,000 per month.

When you hire a fractional COO with the right expertise and experience, they more than pay for themselves throughout their tenure—whether that comes through cost-saving measures they implement, increased revenue generation, or other means. 

What Makes a High-Quality Fractional COO Candidate?

A high-quality fractional COO candidate will possess two main qualifications: 

• Requirements and skills relevant to the position’s needs.
• Characteristics unique to the present opportunity.

Among the requirements and skills generally expected or required for the COO position include:

• Relevant professional experience, as a COO or other executive-level role.
• Demonstrated understanding of business functions related to HR, finance, marketing, etc.
• Business strategy and development expertise, ideally in a related field or industry.
• Well-rounded written and verbal communication skills applicable to digital communication as well as interpersonal skills.
• Working knowledge of data analysis, performance testing, information technology (IT), and more.
• Leadership ability with strengths in driving professional collaboration and creative problem-solving.

When it comes to finding the right fractional COO for your organization, you’ll want to spend some time thinking about what will be most important in finding the right individual and getting them seamlessly integrated into the organization. Some additional considerations that will help ensure a particular candidate’s good fit include:

• Relevant experience in the specific industry or nonprofit sector they’ll be working in.
• Organizational and leadership philosophies and skills that align well with the culture and personnel already in place.
• A unique vision, and an ability to express that vision, generate buy-in and drive change. Also, an ability to translate the CEO or president’s vision into an action plan.

How Computers in Ministry (CIM) Helps Nonprofits “Level Up”

If you’re wondering how to get started exploring the landscape of fractional executive solutions and how to find the right professional(s) for your organization, Computers in Ministry (CIM) is here to serve as your ally and guide. Whether you’re dealing with new challenges or trying to develop and implement innovative strategies for growth and success, we focus exclusively on empowering nonprofits with the high-caliber executives they need for a fraction of the cost.
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