Should You, the CEO, Hire a General Manager?


Fred Perrotta

Tortuga is hiring a General Manager. Read the scorecard and apply here. If you know someone who would be a good fit for the role, please forward the listing to them.

I never intended to become a manager. But today, I'm the CEO and only people manager of a 10-person company.

I left Google in part because I had no career path other than to become a manager. 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 linked 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, I'd suggest some background reading on how others define the role, what a CEO does, and how to draw a line between the two.

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

CEO GM
Charts the course Steers the ship
Player with a Maker's Schedule Coach with a Manager's Schedule
Hiring and culture Coaching
Strategy and planning Implementation and execution
Office hours and skip-level meetings 1:1s
Externally-facing Internally-facing
Important but not urgent Important and urgent

Not everyone agrees that companies should hire a GM/COO. Two investors 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 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 themes 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.
  • Change in Priorities. Some companies struggled when hiring a GM because they were also trying to become a different company in the process. This happens to a lot of small brands trying to grow. They abandon what made them special in order to appeal to the mass market. Ironically, this 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 never 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 CEO and GM 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, 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 has decided they're the expert and have nothing to learn from the rest of the team. You do 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 to the business. They should not try to adapt the business to their experience.

When to Hire a General Manager

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

I can 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.

At 10 people, I’ve reached the upper bound on the number of Players that I can coach 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.

The Process for Hiring a General Manager

Now this article has caught up to where we, Tortuga, are in the process of adding a General Manager. In a few months, I hope to update this section with good news and some helpful advice on this part of the process.

For now, Tortuga is hiring a General Manager. If you're a fit, apply here. If you know someone else who might be, please forward the listing to them.

More to come...