Should You, the CEO, Hire a General Manager?

I didn't intend to become a manager. But today, I'm the CEO and the sole people manager of a 10-person company.

I left Google in part because becoming a manager was the only way I could get another promotion. While I "consistently exceeded expectations" as an individual contributor, my career path was a dead end. Management was the only way up.

Jeremy and I started Tortuga in 2010. For the first four years, we were the entire company. When we started to hire people, I became the manager. I had no choice. I cared more about Tortuga's success than my own job satisfaction.

Fast forward to today. I've been the sole manager at Tortuga for over five years. In that time, I've learned a lot about people management and about running a team. I'm certainly better off for having had this experience. Now we're ready for a change.

Jeremy and I have been talking about hiring a General Manager (GM) at Tortuga for years. In the last year, we finally started to research the role and to define it for our company.

What Does a General Manager Do?

Note: Small businesses hire General Managers. Large (or hoping-to-be large) companies hire Chief Operating Officers (COOs). I'll sometimes use the terms interchangeably in this article but have left quotes unchanged for accuracy.

From the Harvard Business Review:

"While other jobs are primarily defined in relation to the work to be done and the structure of the organization, the COO’s role is defined in relation to the CEO as an individual.... This makes asking the question “What makes a great COO?” akin to asking, “What makes a great candidate for U.S. vice president?” ... It all depends on the other half of the equation, the first name on the ticket. This, then, is why COOs remain mysterious as a class: The role is structurally, strategically, socially, and politically unique—and extraordinarily situational."

The GM role is, and should be, different at every company. The HBR article quoted above defines seven types of GM.

The GM's role must be defined in relation to the CEO. What do you, the founder, need help with? Which parts of your role do you need to hand off to someone who can do them better than you can?

Before diving in to that task, start with some background reading on how others define the role, what a CEO does, and how to draw a line between the two.

• Etsy COO Linda Kozlowski for First Round Review on defining the COO role, hiring, and onboarding.
• Elad Gil on whether or not you should hire a COO based on his experience as a tech investor.
• Joel Gascoigne of Buffer on how he and his co-founder define their roles as CEO and COO respectively. Buffer's division of labor isn't right for everyone, but specific examples can be instructive.
• Fred Wilson—a venture capitalist at Union Square Ventures—succinctly defines "What a CEO Does" which can be useful for defining a complementary GM role.
• Gino Wickman's book Traction describes the two roles, regardless of titles, as Visionary and Integrator.

General Manager vs CEO

Here is how we plan to define the roles at Tortuga.

The idea of players and coaches is borrowed from HelpScout, and the Maker's Schedule / Manager's Schedule is from Paul Graham.

Not everyone agrees that companies should hire a GM or COO. Two venture capitalists offer contrarian opinions.

• Brad Feld says, "I don’t believe in COO’s 98% of the time for companies smaller than 200 people." He also lays out potential problems related to titles and authority in small to mid-sized companies.
• Mark Suster believes that what a COO is typically responsible for, "all of the daily reports into them covering off for finance, sales, marketing, biz dev & HR," is the job of the CEO at a small company.

General Manager Pre-Mortem

At Tortuga, we like to do premortems to assess how a project might fail. Then we can mitigate those risks. A premortem is the opposite of a postmortem which assesses why a project did fail, after the fact.

Aside from Feld's and Suster's counterpoints above, we discovered a few more reasons why hiring a GM or manager might fail. Multiple members of our team have been through a similar hiring process at their previous companies. They've been part of the small, scrappy team that brings in the dreaded "outside management" to professionalize the company or to help it grow. In talking to our team about their previous experiences, a few potential problems emerged.

The good news is that most of these are preventable and solvable before hiring.

• Wrong Goals. If you hire a General Manager to cut costs and improve the company's financials with the goal of selling the company, the hire likely won't go over well. You can't save a troubled company through hiring.
• Going Big. Some companies struggled when hiring a GM because they were also trying to become a different company in the process. Small brands are usually the ones making this mistake. The company abandons what made it special in order to appeal to the mass market. This strategy often backfires and makes the company less appealing to everyone, including past customers and employees. Going from niche cool to huge mainstream brand is nearly impossible. Don't expect an outside hire to do this for you without collateral damage.
• Poorly Defined Roles. Other hires have failed because the GM’s role or the CEO/GM delineation was not well defined. When those roles were well defined, some hires failed because they did not follow through on the role as it was defined. They said one thing but did another. To mitigate this risk, we've spent a lot of time researching the role, outlining it on the scorecard (job listing), and defining exactly how the GM and I (the CEO) will work together. We brought the entire team into the process of defining the role and hiring the GM. I recommend this tactic. If you want your team to buy in to the need for hiring a GM, clearly explain the need and involve them in the process.
• Wrong Attitude. Do not expect to succeed if you hire a GM, or any outsider, who thinks, “I’ve been through this before. I’ll tell you how it’s done.” You likely want someone with experience. However, you don't want someone who believes that they are the expert and has nothing to learn from the rest of the team. You want someone who is curious about what's already working and eager to bring their expertise to bear on that. The GM should use their experience as a tool and adapt that tool to your business. They should not try to adapt the business to their experience.

When to Hire a General Manager

Like the definition of the GM role, the best time to hire is... it depends.

I can only tell you how I knew that it was time for Tortuga to hire a GM.

After discussing the GM role for years, we started the hiring process when I recognized myself as the barrier to Tortuga's next phase of growth.

I’ve reached the upper bound on the number of people that I can coach (10) and still do the work that I must do to move the company forward. We need another Coach before we can add any more Players and definitely before we can grow into the next stage of the business.

In the early stages of a bootstrapped business, you're fighting for survival. A five-year plan in laughable. Even making time for quarterly planning is hard. As the company grows and stabilizes and you hire a team, your time horizon changes. You're able to look ahead and to plan for the future. Yet, you're still managing today's emergencies. When you find yourself trying to do both, across the entire company, you need more help.