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Why a Director of Operations should be your first hire, Ideas for how to find a good one….

In my previous post, How to hire your first employees and what to expect…, I talked about some of the steps you might need to put in place before you hire that person, who you should hire and what to expect from them.

After I spoke at AWE (Affiliate World Europe) I had a lot of questions about who this Operations person was. So I thought I’d expand on the subject a little more.

Why hire a Director of Operations as you first hire

You are an entrepreneur.

This means you probably love

  • Digging in and solving problems
  • Figuring out how to make money
  • Identifying opportunities
  • Mentoring and coaching

But most entrepreneurs I’ve met don’t enjoy taking all that and building it into a company.

What do you mean Jason? I have a company already…

Just because you make money and/or you’re incorporated doesn’t mean you’re a company.

A company is repeatable measurable systems of operation. Stuff that other people can train with, hire with, etc.

Most of us entrepreneurs have little to no interest in building this stuff. We have a lot of ideas, we know how to solve the problems, etc . But when it comes to sitting down and writing all this out. We say we’ll do it… but we never will.

And honestly…

You shouldn’t be doing it. You should be focused on finding opportunities to make more money, hire better people or plan for the future.

A great operations person will sit side by side with you. Take all your amazing ideas that you have and turn them into a company. All the mean while you can focus on making money and keeping the company a float.

 

Business & Product are separate things

My CTO Sergey told me a long time ago that business and product are separate things. So what does this mean?

All “business” is relatively the same.

The business is:

  • Hiring
  • Training
  • Managing
  • Accounting
  • Supply chain
  • Manufacturing
  • and so on…

Now the product in most businesses are very different. If you’re in the affiliate world you product might be:

  • Media buying
  • Conversion rate optimization
  • Emailing
  • Servicing affiliates in some way
  • Servicing merchants in some way
  • Selling products direct to consumers

Product based things are things that require specific domain knowledge about what we give to our customers. They very widely across businesses.

As you can see the “business” and the “product” are different things and require different people to accomplish them.

When it comes to hiring for a role I like to think of things this way.

If they’re a “business” role like operations, I’ll hire without industry experience all day long. If they’re “product” side I prefer to hire with experience.

We do however hold roles in the company to bring up entry level people on the product side of the business. But we only hire those people once all the training, systems. measurement and management are built out.

If you’re going to hire people without experience please make sure you set them up for success. With strong systems, measurements, training and management. If you don’t they’ll just suck the life out of you and the business will struggle long term.

 

What title should I hire and why?

Being an entrepreneur I never thought much about titles or cared for them. They were just names that people got paid more money for having. More often then not they seemed to cause more issues then they helped.

Most of the time in the affiliate business titles are made up and the people with them are not in alignment with their titles.

But now I view that differently. I use titles to bucket what someone should be capable of doing in their role. Here’s my loose system.

  1. C Level
    1. Vision & Direction
    2. Gets the best talent on board, much better then themselves.
  2. VP
    1. Forecasting
    2. Predictable Planning
    3. Strategy
  3. Director
    1. Builds the systems to implement the VP’s strategies
    2. Tactics
  4. Manager – Implements the Directors systems effectively
    1. Hires
    2. Manages
    3. Trains
  5. Strategist, Analyst, Associate
    1. Does the bulk of the work following the training and systems built by the Director and managed by the manager.

But Jason I can’t afford to hire all these people….

I like to break out roles like this so that you can understand that you and your employees are filling many different roles. When you go hire your Director of Operations that means you still have some roles to fill. That is the Role of VP and C level for the company. At some point you’ll move your Director to a VP or hire a VP above him/her. But don’t expect your Director level employee to do VP & C level things, this is a recipe for failure.

Be cautious…

I’ve made this mistake, on multiple occasions, of hiring a someone that is a Manager level person and asked them to do Director level tasks. This doesn’t work and typically ends up with the employee and management being frustrated.

I invite you to be cautious of resumes. Ask a lot of deep probing questions. Just because it says Director on 2 past roles doesn’t mean that they have the tools in their tool chest to do what I described above.

 

What kind of experience should they have?

Just because someone has 20 years at IBM, in the role you want to hire for, doesn’t mean they’re going to b e a good fit.

You really want to hire someone that started with a very small company and grew it to the size that you want to be in head count.

Why do I say head count?

Because we’re discussing the business side of the business. And the business side the of the business is about people. So as part of our 5-10 year vision we want to create how many people would you like to have on your team? If that number is 20.

Then I would suggest you hire someone that has been at, at least 2 companies prior and grown them from 2-3 people to 20 people. Ideally if you can find someone that’s grown 2  companies to 50 people then you know that the 20 you want should be easy to manage vs. 50.

Again because this is a business role this person doesn’t need to have domain specific experience in my opinion. That’s what you bring to the table. They’re their to help build your vision.

 

How to find this person?

We hire with ads, networking and recruiters.

First you need to put your needs analysis together. That is a list of things you want out of the candidate.

It’s always good to go look up job postings other have made for a similar position.You also want to go look at related “manager” level roles and get ideas from there as well. Because you’re going to need this person to build the systems, hire the team and manage the team. Then get your total list from those compiled together.

Just don’t forget to add the ideas from this post in as well…

  • Grown company from small to big
  • Created systems based on a leaders vision & strategy

As this is your first hire, I’d encourage you to engage 2-3 different recruiters to see how they operate. They typically ask for 30% of the first year salary. We negotiate all the ones we work with to 10-15%. They’ll guide you through the hiring process and have done it 100-1,000’s of times before. The good experienced ones also have history with lots of candidates that might fit your bill.

You can also put ads up yourself and see what you get.

Just remember people are on their best behavior in interviews. So if you hire without a recruiter just be careful you may not get what you think you’re getting in the end.

What should I look for on their resume?

As an employer, at least in the U.S., you can only ask a past employer if someone worked there for that period of time. And I believe you can ask if they’re eligible for rehire.

So one of the main things we look for is longevity at past job.

 

How to interview this person?

There’s a ton of good material out there on how to interview people. So I’m not going to talk about that too much. But our process is

  1. Resume review
  2. Phone screen
  3. Interview 1
  4. Interview 2
  5. Interview 3

I’d suggest to do 3 interviews with the person or at least 2 spaced out. I know you’re going to feel like this person is amazing when you find the right one. Then you’re going to want hire them right away. Don’t do this. Make them wait and slow the process down. This is going to be a marriage for a long time hopefully. You don’t want to meet your wife one day and get married the next. You want to make sure you go through the dating process and that dating process in hiring is multiple interviews.

Another tactic we’ve used it hiring them for 30 days as a consultant. Feel what is like to actually work with them. However don’t expect them to accomplish great things in 30 days time. As my last post said it takes quite a while for someone to have a reason impact. It will let you know what it’s like to work with them and how they do these things below.

  • Take ownership
  • Work well as a team
  • Solve problems easily and readily
  • Take direction and innovate on it
  • Will do research to answer their own questions
  • Proficient with Excel

There’s a lot of good interview questions you can ask that can get to the root of these things. I’m not going to list ours as we hire all the time. Go do a little research and you’ll come up with lots of lists you can start using when you hire.

 

What do I pay them?

If you use a recruiter they should be able to guide you. You can also just do a salary search on Google like this.

Director of Operations San Diego Salary

Don’t be cheap. You get what you pay for. Find the right person that you think will be an amazing fit and pay them what they’re worth.

I’ve tried to hire cheap. It always turns out poorly. Good people know what they’re worth and even if you do get them, they won’t stay.

 

In summary

  • Hire people that started at your size and grew to what you wanted to be
  • Pay them what they’re worth, don’t be cheap
  • Make sure you hire someone someone with the right Title level
  • Hire slow… make a process even if it’s just you
  • Pay fair and just above market rates

 

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4 Comments

  1. Amazing post Jason! Would love to see much more of these from you. Quick question, do you give any of these hires stock or equity?

    • I do sometimes. But typically not at first.

      Becoming rich is a by product of being great or getting lucky.

      I like to hire someone because they believe in the vision and want to be part of what we’re building. Not because they think they’re going to get rich here or make millions.

      We provide an amazing work environment, culture, salary and opportunity to learn. If that’s not enough for someone to want to be part of our vision then they’re not the right fit for our company.

      Now, after they have proven the value they bring to help grow the organization and when the company can afford it we’ll consider giving stock options. Typically with a 1 year cliff and 4 year vest. The options accelerate if we were to ever sell the company.

      But again, I don’t hire people based on “you’re going to make millions” or “you’re going to get options we’re going to have a huge exit and your’e going to get rich”. This often causes a “greed” based culture. And when it doesn’t happen fast enough or there is set backs they leave.

      P.S. if you don’t have the cash to pay market rates or slightly above market rates, consider making them a co-founder and then give them stock options from the start. We pay well, have a strong vision and purpose, so we find this isn’t necessary to get people on board.

  2. Julian Julian

    Incredible article Jason.

    I’ve got a question.

    Can you talk about what a ‘scaled down’ version of your company hierarchy would look like?

    In other words, you’ve got C-level, VP, Director, Manager, Associate…

    But for my small team, which lives on the pirate ship in the picture above, we consist of: Owner / Copywriter, Tech guy, QA guy, Media Buyer / Affiliate manager, Email copywriter, Graphic Designer, Accountant, 2 customer service reps, and a couple of freelance video editors.

    In essence, my merry band of pirates are functioning without a director, and without designated managers… (Hey, I didn’t say we were functioning *well*)

    Anyway, with my pirate ship in mind, would my next hire still be the director of operations? How does the director function without a ‘VP’ to deliver on strategy/forecasting? Or in that case, does the CEO need to wear the C-hat AND VP-hat?

    I guess what I’m getting at is, what does a *scaled down* version of your company hierarchy look like? And how does the Director’s role change without a proper VP or managers in place?

    ARGH! Thanks Matey!
    Captain Redbeard

    • Exactly right.

      Your next hire is still a Director of Operations. At this time you need to fill the C level and VP hats yourself.

      On the business side of the business all employees and staff would be responsible to report to the Director. They would manage all of them. However you would still tell them & the Director work with them creatively & be part of meetings held by the Director. But the Director would be the one that held everyone responsible to deliver what was agreed upon. So in other wards you’re still very involved in direction and what should get done and why. The Ops person just continues that march without you having to manage those people day to day.

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