Over the last 18 months, the Kathy Freeman Company witnessed a substantial increase in Chief Operating Officer searches throughout the financial industry. During these searches, we accumulated market data which we have distilled down for helpful context to those firms which may want to consider upgrading or adding this critically important function to their leadership suite.
The searches conducted spanned asset management, wealth management, consulting, and venture capital.
The Necessity of the COO role
Many of the COO searches we conducted were new positions, being added into firms that had experienced substantial growth during the bull market, from 2010 – 2022. These crucial leadership roles were being prioritized around the necessity for building efficiencies, infrastructure, and process into their firms. In many cases, the responsibilities that this new role would take on were being “handled” or “assigned” to other leaders on the executive team. So, two things were happening: the current leadership team was getting burnt out, and the tasks assigned weren’t getting done well because these leaders didn’t necessarily have the proper skill set or time on hand to commit to a job well done.
Defining the Need
Whether a firm is looking to upgrade the talent in a COO position or looking for their first COO, it’s imperative to frame the expected outcomes and identify the current state of the firm presently. Some of the issues our clients needed to consider:
- Is it a white space opportunity where someone with an understanding of building out systems and infrastructure can come in and be able to create the role from the ground up?
- Is it a transformational leadership opportunity? Perhaps someone has been in the role previously, but the business needs have exceeded their ability to keep abreast of change. These are different skill sets and demand a varying degree of EQ to influence change.
- Where does technology sit and what is the responsibility this COO will have to influence or direct change that benefits the business outcomes? There’s been an increasing need for COOs to be able to translate business needs to ensure the proper technology is sourced.
- Another interesting dynamic is whether this COO will be client-facing? In some firms, these are entirely internal roles whereas others need to be more buttoned up to work with clients and build stakeholders among the business community.
- Cultural alignment is critical so defining what your firm’s culture, mission, and vision are today, and ensuring this new hire can complement or enhance your firm’s stated values is key.
In addition to these important insights, we also gathered compensation data across the market for these national searches. We’d be happy to share additional information surrounding this COO function and correlating compensation bands. Please reach out if you’d like to receive compensation insights or to discuss potential needs for leadership talent within your firm.