Month in the Life of a Fractional COO

Month in the Life of a Fractional COO

Month in the Life of a Fractional COO

Month in the life of a fractional executive

I often get asked, “What exactly does a Fractional COO do?”  I get it.  I think the problem is not just about a fractional, but that the definition of a COO is really “in the eye of the beholder.”  Where most folks have a pretty good picture of what the job of CEO is, and in general, CFO’s have a pretty well-defined job description, the details of the COO role vary a lot from company to company. At large corporations, the COO role may be more (tightly) defined, and even have specific formally specified responsibilities.  At mid-sized firms, there may still be a defined role, but with broader scope and variability.  At startups and small businesses, however, it seems like everyone has a different vision for what the Chief Operating Officer does — basically just the chief “Filler of Holes”.

Add to that the whole concept of “fractional”, and it is not wonder that there is some confusion.

In hopes of providing more clarity, I am presenting myself as an example.  Below, you will find a listing of the tasks/projects I accomplished in the month of April 2023.  While my responsibilities vary greatly between my clients and over time, this may provide some insights on the value that a fractional COO can bring to your small to mid-sized business.  I’m sure this list is not complete, but hopefully, it provides some insights on the value prop of bringing on a fractional COO.

With all my clients, I strive to be a trusted resource, to make my CEO client and his/her team, the most effective they can be.  I take on those tasks and projects that are important to the business, but are either not within the wheelhouse of the CEO, or not what brings him/her passion and energy.  By freeing up the CEO to be at their best, I make both of us, and the company, more successful and efficient.

Implement a new Expense Management tool/process for my Healthcare client

Rolled out a new online tool that allows the staff to categorize and specify the office location for all charges in their company-assigned credit cards.  This system is directly integrated with our accounting system, to allow for automatic and direct mapping of charges into the Profit and Loss statement.  Set up access and trained all staff members.

Developed a Pricing Model for my Construction client

It is necessary to better understand both our Gross Profit and Net Profit associated with any particular project bid.  Developed a model, based upon historical financial and bid data, that predicts both gross and net profits, from the input of the square footage of a construction project.  Used historical OpEx data to “fully load” the below-the-line costs onto the individual projects.

Updated the Financial Projections for my Custom Software Development client

Either monthly, or semi-monthly, I update a Financial Projection Model I had created, incorporating the previous month’s P&L as well as any revised revenue and expense projections, to show not only historical trends, but also to project revenue, expenses, and profit for the year.  This particular client has multiple corporate entities whose financials must be merged into the Model.  In addition, the Model both tracks and projects Cash Flow.

Restructure a P&L for my Healthcare client

This client’s business has multiple corporate entities, along with multiple books in their accounting software.  In order to provide an overall picture of the state of the business, needed to synchronize the structure (Chart of Accounts) across all entities, and then create a procedure to merge these in Excel.  Worked with the client’s accountant to update the requisite account structures.

Performed multiple sales demos with prospects for my Construction Tech (SaaS) client

As the primary Sales & Sales Ops person for this small business client, I am often called upon to do online demonstrations of the functionality of our SaaS product.  Update our CRM and pipeline with results of each call.

Networking! Networking! Networking!

As a solo entrepreneur, especially one that relies upon referrals for future business, it is critical to continue to build my Brand in the local (Denver metro) market, as well as to establish key strategic relationships across the US.  This networking effort not only helps with my Brand, it also provides strategic connections to resources that I can bring in when appropriate to assist in my clients’ needs.

Review various contracts and RFP responses for my Custom Software Development client

I am often asked to review contract language by one of my clients.  This last month, I was involved with an assignment agreement that arose due to a corporate transition within one of our customers.  I worked with the customer’s legal team, as well as bringing in our own counsel when appropriate.  (I always make it quite clear that I am NOT a lawyer, and defer to bringing in expert advice when there are any questions.)

Amend an employment agreement for a sales person for my Construction client

Thisi sales person was originally brought in with just a base salary.  It was time to amend the agreement, to define an incentive program (i.e., commissions.)

Evaluate a trial with a 3rd-party Lead Gen company for my Construction Tech/SaaS client

I’d been working with a Lead Gen company to push more leads into our pipeline.  Pulled the 3 months of data together from our CRM, and evaluated the ROI from the effort.  Made a recommendation for next steps to the members of the company/LLC.

Hired a couple key resources for my Custom Software Development client

Worked with my CEO client and an outside recruiting firm, to define (Job Description), locate, interview, and hire two new employees.  Negotiated the terms of the offer with the prospect, and successfully secured the hire.  Performed all the Onboarding tasks with our PEO.

Multiple customer service tickets for my Construction Tech/SaaS client

I’m also the frontline Tier 1 and 2 support person for this client. 🙂  Since I came on board a few years ago, our turnaround time on support tickets went from as much as a week to just a few hours, in general.  

Finalized implementation of digital card scheme for Healthcare client

To further steamline the financial management for the company, we’ve implemented a digital card model, wherein recurring vendors are assigned GL account-specifc (and location-specific) digital cards.  When charges come in, these are automatically loaded into our accounting system, properly categorized and assigned to location.  This reduces errors as well as time spent (and charged) by our accountant.

New digital marketing push for Custom Software Development client

Working with new 3rd party web and digital marketing firm, to begin the process of revamping the existing web presence, as well to kick start our organic leads (i.e., SEO.)  This is an ongoing project, which I will manage.

Integrate bidding software and CRM for Construction client

Built a Zapier integration between the bidding software and our CRM, so that when jobs are marked as Closed Sold in the former, the status of the lead in the CRM is automatically updated.

Managed a platform upgrade (and transition to AWS) for my Construction Tech/SaaS client

Working with our 3rd party development staff to define and implement an upgrade of our PHP platform to the latest supported version.  This addresses a security concern, as our older version was no longer supported by many security patches.  In addition, moving from our hosted hardware to a cloud-based server farm, to reduce both risk and costs.

Performance Management for my Custom Software Development client

Regular one-on-one meetings with all staff, to follow up on the specific goals we set during the Performance Review process done at the beginning of the year.  (I pretty much am HR for this small company. 🙂

Manage the marketing push for my Construction client

Work with our marketing firm to define and measure effectivity of our marketing goals.  Develop and follow-up on ROI-based 3-month goals for our organic and paid digital pushes.

Case Study: Outsource, Insource, or Hybrid?

Case Study: Outsource, Insource, or Hybrid?

Outsource, Insource, or Hybrid?

Jun-Dec 2022

Anonymous Custom Software Dev Co.

Company has more development work that it has resources, but was hesitant to hire, as the sales pipeline was still in doubt.  Initially (in early summer), the committed sales pipeline only had 6 months of work.  Later (in Q3), due to an additional two logos signing contracts, the Company had committed work at least into the second half of the following year.

The CEO was hesitant to hire employees with a short ramp of committed work.  The Company had been through a very rough patch, due to the pandemic, and he had been forced to layoff most of his staff — including some that had been with him for many years.

Outsourcing vs Insourcing

Committed Sales Ramp (months)

Burst Development Capacity (hours/month)

We had a very successful outcome (not even counting that we continue to generate new business / new logos!)  After some experimentation, we have settled on one 3rd party development vendor for any outsourcing.  Plus, we are only using them for work that is easily segmented, and fairly standalone — specifically mid-sized, fixed scope, statement of works.  In addition, we have now brought on 4 new developers, as employees!  The continued success on the sales side is allowing for growth, but we continue to utilize the (low cost) development resource to both supplement our available resources, but also to allow us to focus our internal resources on business critical work.

N

Built relationships with three software development shop, all with in-depth experience working with the Company’s technology stack.

N

Assigned each of the three specific deliverables within ongoing projects, based upon their perceived strengths.

N

In parallel, started recruiting for critical internal resources.

N

Due to the very specialized nature of the technology, the Company utilized a recruiting firm.

Challenges

  • As capable as all three of the development shops were in our technology stack, there were significant efficiency problems.
  • All of the teams were based overseas. So, it was not possible to have much real-time interaction, due to time zone differences.
  • One of the shops in India demonstrated lots of problems with autonomy: Tasks were assigned in a daily stand-up, but if the developer got stuck on a problem during their day, they did not have the competency or confidence to proceed, until the next daily standup.  This led to much longer than necessary timelines.
  • One of the teams was way more capable, with better autonomy, but was very expensive. Our gross margin on hours was insufficient to cover operational costs.  Not a long-term solution.
  • Hiring meanwhile was taking a while. We were constrained on what we could afford, and it a tight market, this presented a real challenge.  Initially, the CEO had an unreasonably low idea of what he could offer for salary for the positions.  (He had not hired for over a year, and the market in tech had radically changed.)

Lessons Learned

  • It takes time and effort to ramp up a 3rd party development shop. This was true for us even thought the development groups we engaged were all very experienced in our particular technology stack.  It is important to account for this additional ramp-up time and overhead, when making comparisons between hourly rates.
  • Bringing on vendors with deep experience in our technology satisfied tight schedules, but at additional costs. Ultimately, once the business outlook justifies, we arrived at a primary focus on internal employees, while settling on one development partner for burst capabilities.

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