Why Chief Operating Officers Are Your Ultimate First Principles Builders

Being an early stage founder means transitioning from tactical to strategic operations—and partnering with new and existing executives in this pursuit. Easier said than done. My new series, Around the Exec Table, will feature tips, insights, and best practices, role by role. Keep up with new installments by following me on LinkedIn.

When Jerry Tang joined Dandy a year ago, he had never been a COO before, but had seen hypergrowth in a number of global supply chain operations roles. Now, he’s driving hypergrowth at Dandy, an operating system for dentists that is digitizing a $138 billion industry. Over the past year his team has driven a 10x increase in supply and supported growing the team to over 500 people.

In doing this, he’s developed a perspective that the COO role is about understanding the founder’s “Why?” and helping set direction, increase fidelity, and operationalize the company to obsess over customers and achieve goals.

As a partner at Primary, I work closely with Jerry and Dandy’s leadership team as he’s done this. I sat down with Jerry to discuss his insights about the role of COO and his advice to founders for spotting the best candidate and building a strong collaborative partnership.

You’re a first time-COO but have a long career in operations. Can you tell us about your background?

I started at GE, where I spent nine years working in global manufacturing and operations, managing supply chain, working on the shop floor, and gaining an understanding of complex operations on a granular level. From there, I joined Flexport, and held a number of global operations roles. We scaled the company from 50 to 2,000+ people in five years and brought on thousands of customers. Having experience with hyper-growth in operationally complex business, customer success, supply chain, and manufacturing gave me the confidence to join Dandy early stage as a COO.

How would you describe the role of a COO?

The role shifts over a company’s growth cycle, but in the early stages, I’d describe it as T-shaped.

The top of the T is a horizontal focus on operations and broad leadership to ensure our success. Answering questions like “How do we organize ourselves and our objectives at a company level and move in a singular direction?”

The vertical part of the T requires having command over a functional area/domain. For Dandy, that means a deep understanding of everything required to run a tech-enabled service, including onboarding customers, managing accounts, and building bullet-proof service delivery operations.

A COO also drives operationalizing with forecasting and setting objectives. Working backward from the founder’s vision and goals, we set the build sequence, resources, and ways of working to achieve goals.

And how much of your work is executing on the Founder’s vision versus developing something together?

That depends on the founder, but I think a good COO is unafraid to ask, “What do you mean?” Not in a condescending way, but in a way that allows them to create a higher-fidelity version of the vision/intention that can be tactically executed on.

Startups are founder-led businesses. As a COO, your job isn’t necessarily to ask “Is the founder’s vision the correct North Star?” but instead, “How can we create a smart path, team, and optimal ways of operating to hit our goals?“

I love that. What sorts of skills, capabilities, and experiences should founders look for in a potential COO?

First: Understand the domain you’re hiring for and look for expertise. Your COO should have a general and specific understanding of what it takes, from the ground up, for the business to succeed.

Second: The keywords you’re looking for are adaptability and first principles builder. Early stage startups change constantly, so you need someone who can evolve and adapt. Instead of looking for professionally polished candidates who would be great down the road, hire the person your company needs today.

Third: A COO should be able to understand your company as a system to achieve your vision, translating your goals into operational strategy and mechanisms, and continuously connecting the dots along the way.

And finally: Hire someone you like and trust. You want someone you can share a bunker with, especially during challenges and uncertainty. Your COO will have major influence over your company, so you should trust in their judgment and their alignment with your values.

How can founders screen for the best collaborative partner?

Look for someone whose abilities complement your own. If you're an artist, pair yourself with a scientist who will provide frameworks to the ideas you throw at the wall.

And look for someone who doesn’t need structure to perform, but still can bring structure to madness. A lot of founders struggle with this and aren’t always clear if they need a COO or Chief of Staff.

A Chief of Staff is like an extension of yourself, someone you can deputize to run with projects and think, act, and respond like you would. While a Chief of Staff brings structure to your immediate world, a COO should bring structure to all the areas that extend beyond your immediate area of focus.

How does a founder know that it’s time to hire a COO—or if they even need to?

It’s the day you wake up and realize, “Oh, this is a real company now.” You have people and products, and you’re no longer only testing hypotheses.

You’re better off hiring a COO earlier than later—but wait until you know exactly what your company does and the expertise required. You don’t want to hire a generalist: Your COO should have the domain knowledge or functional experience to operate at a granular level in the early stages while still having the potential to scale and abstract up from there.

How will a founder know if their COO is successful? What metrics do you use, and what does winning look like?

We’re constantly asking ourselves questions to stay on track. Is the company growing? Are we hitting our financial metrics? Are we organized and functioning well as a team/company? Looking at the service delivery side, are we keeping customers happy? Are we delivering on our promises around quality, timeliness, and service? Are we onboarding and activating customers? Are we sustaining a level of customer satisfaction that translates to organic revenue growth over time?

SPEED ROUND

What’s the most important skill or attribute you look for during an interview?

Intellectual and operational agility, as well as emotional resilience.

Favorite interview question?

“What’s your leadership philosophy? How do you acquire, develop, and retain talent?”

Best advice you’ve ever received?

It was from an army veteran I worked with on a manufacturing shop floor and who gave me fatherly advice in a chaotic operational environment: “Walk slow, think fast, and never let them see you sweat.”

Favorite books?

Working Backwards, by Colin Breyer and Bill Carr, about Amazon. It’s a great way to understand management performance and operational mechanisms.

Primed to Perform, by Neil Doshi and Lindsay McGregor, which is about the art and science of motivation.

Good to Great, by Jim Collins—an incredible book.

And last, The Goal, which teaches you how to keep things simple, manage bottlenecks, and unconstrain your company.

Go-to activity for stress?

Running and working out.

And your favorite way to spend your weekend?

My weekends are a mental and physical reset, and I like to spend them tuning into my diet, health, and recovery routines. I get good sleep, am really intentional about eating nutritious foods, and make sure that I get two workouts in—especially if I did nothing all week.