Monday, October 07, 2013

Why More Startups Should Consider Adding a Chief of Staff to Support the CEO


I was delighted when, a few months ago, Melissa Wingard-Phillips contacted me to ask if we could spend some time discussing the role of Chief of Staff.  In the course of researching the COS role, she had found an on-line version of the White Paper that I have written on the "The Underutilized Role of Chief of Staff"

Chief of Staff White Paper Blog Posting

In the intervening months, Melissa has done a great deal of research and thinking about the role of COS.  I am pleased to offer her current thoughts on the role in this guest author piece.


Why more startups should consider adding a Chief of Staff to the CEO

by Melissa Wingard-Phillips, Guest Author

Chief of Staff is an interesting role, particularly in the corporate context and more so in the world of technology startups.  In political and military contexts, COS is a standard and well-understood role.  Although it has become more common in large corporations, the responsibilities range from very tactical to very strategic depending on the organization and executive.  In the startup community however, COS as a role is essentially a blank canvas.  I have interviewed over a dozen VCs and startup CEOs recently on this topic.  One VC dismissed the concept immediately because there are only two roles in a startup: build stuff or sell stuff.  Obviously a COS has no place in that model and would be viewed as frivolous overhead. 

And yet, there are examples of where this role has been quite successful in a startup context.  Sarah Imbach became Reid Hoffman’s Chief of Staff in 2004, just a year after LinkedIn was founded.  According to one of LinkedIn’s Board members, Greylock’s David Sze, “[Sarah] drove the initial efforts on areas as wide-ranging as setting up corporate sales and subscriptions to building out our remote customer support operations.”  She was “responsible for all day to day operations for LinkedIn, CFO, acting VP Product, and responsible for HR, Sales, and Customer Operations.”  Sarah was Reid’s COS from 2004 until 2007 when Dan Nye joined LinkedIn and Sarah became VP of Revenue and Customer Operations.  Sarah clearly added tremendous value during LinkedIn’s early days.

The success of that relationship inspired Mark Organ, founder of Eloqua and now of the cutting-edge advocacy marketing company, Influitive He hired Fraser Stark as his COS when Influitive had just 40 employees.  As he thought about his company, Mark decided Influitive needed him to be a “super-CEO” and Fraser has allowed him to do just that.  Six months in, Mark’s leadership team, board members and employees all report a better experience working with him.  Decision making, communication and accountability have all improved and Mark has increased his direct reports from 7 to 10 with higher quality management.  Which startup would not benefit from those outcomes?

My own interest in the COS position began when I was invited to interview for two very different versions of the role.  During my conversations, it became clear that both companies needed assistance in further defining and clarifying the role.  My initial research led to Dr. Al Chase’s revised COS White Paper which was extremely helpful in my development of an initial set of tools to support the COS hiring decision.  Recently however, a VC I interviewed who has known me 13 years asked “Why use an ambiguous title like Chief of Staff rather than say you are looking for a COO or a VP of Ops role?” 

There are a number of reasons but the primary one is that I want to encourage discussion of the COS role as an option in the startup community.  Startups and their investors will benefit greatly from considering COS as a strategic hire early in a company’s life cycle.

LONELY AND UNNATURAL:  CEOS ARE MADE

Someone asked Ben Horowitz whether CEOs were born or made.  I love his response: “That’s kind of like asking if Jolly Ranchers are grown or made. CEO is a very unnatural job.”  When talking about whether to hire a professional CEO, Reid Hoffman calls the CEO’s office “the loneliest place in an organization”.  Having run a company, I can attest to the fact that it is a lonely and unnatural position.  No matter where you fall on the Founder vs. professional CEO debate, you likely agree that no CEO arrives in the position completely ready.  Even the best generalists will have difficulty doing everything well at the same time.  Running the traps from tactical to strategic and back again is exhausting.  If you want to focus CEO time where it is best used and reduce the loneliness and exhaustion that are an inevitable part of the job, hiring a COS is a good option.

CHIEF OF STAFF FILLS GAPS NOT ALIGNED WITH A FUNCTIONAL ROLE

A number of the reactions to my suggestion of the COS role were that the role I described was covered by the COO, the VP of Ops, the CFO, the VP of HR or, in one case, the even more ambiguous Portfolio Program Manager.  Very early on, as the founding team expands to become the early leadership team, the roles needed are relatively straight-forward.  Enough finance, sales, or marketing activity is happening to warrant addition of a senior team member.  Using the Inc. CEO Project’s 5 Hats framework, such functional additions to the senior team permit the CEO to limit the amount of time she wears “the Player hat”.  But what happens when a gap appears that does not fit well in a function or crosses multiple functions?  Growth by definition creates operational gaps and misalignments within a company. These gaps and misalignments then inevitably shift and change over time. The CEO may need or want help with the constant assessment of where a company is, where it wants to be and, most importantly, how best to close the gaps and bring the alignment that will enable achievement of the next level.  Some of these issues require CEO attention but many do not.  A COS will know which is which and handle the latter category.

CONSIDERING COS WILL LEAD TO A BETTER DECISION, EVEN IF YOU DON’T HIRE ONE

There is considerable evidence that evaluation of multiple alternatives leads to superior decision making.  In a startup, when the inevitable gaps arise, the most common option reviewed is the addition of a COO.  The organization may also organically shift so gaps are covered by a CFO, VP of HR or other senior team member.  If a company does start down the COO path, they are likely to encounter some aspect of the debate in the industry as to whether the COO role is appropriate to startups. This debate is well covered in Mark Suster’s post, although he advocates against the role.  Interestingly, the reasons put forth advocating for the role could easily fall in the remit of a COS, avoiding other issues of chain of command and lack of CEO involvement. 


Whether a company decides on COO, COS or another solution to closing gaps and focusing CEO time, the very process of assessing and selecting among several options will lead to a better outcome.


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I want to thank Melissa for sharing her thoughts so eloquently.  She and I are partnering together to evangelize the role of Chief of Staff more broadly in corporate America (and Canada!) and beyond.  If you are in a leadership role - operational or Board member- in a company that may consider creating a COS role, then please contact me.  Melissa and I would be happy to consult with you in fashioning the role and helping you to identify and to hire the right person to fill that role.

Al

achase47@gmail.com

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