Last Updated May 17, 2010 8:00 AM EDT
What is the responsibility of an employee? To make the business profitable. (Now, I hear the whines from people in organizations like, you know, Human Resources, which say, "I have nothing to do with generating income for the business." Well, that's why no one listens to you, as you are drain on society. Everybody should be focused on doing the right thing for the company, whether that is good policies and hiring procedures, accurate accounting, reliable IT, or good sales. Doing the right thing is the most profitable one in the long run.)
When you have a person in power (the COO) who is damaging the company, it is your obligation to bring it up. The first step is to do as you have done and bring it up with him. Since his reaction was, shall we say, explosive, you need to take it to his boss.
Your second role is a manager. You have people that report to you. It is your responsibility as a manager to create an environment that allows your employees to focus on their role in making the business profitable. If they are miserable, they will fail. If you are constantly having to hire new people to try to deal with the employment hemorrhage, no one can be as successful because they are constantly training and being trained to do the first level of a job. It often takes time to bring people up to speed. By having high turnover people rarely make it past that first, basic, level.
So, two things to do. 1. Tell the boss and 2. Protect your people.
Go to the owner and present the information you mentioned. Give hard facts. Try to keep emotion out of it. Do this first. If the owner defends the COO and accuses you of trying to undermine the business, respond calmly that you are presenting the facts and that it is the Owner's responsibility to handle the situation. Could you be fired for doing this? Of course. You can be fired for anything as long as it's not an illegal reason. (Incidentally, if any of the things the COO is doing are illegal, then reporting it protects you under Whistle Blower laws, which vary from state to state. Check them out.)
Will you be fired? Well, that I don't know. I suspect that the owner is well aware that the COO is a jerk, but values his work. Or, the owner is a wimp (happens!) and is hoping that if he doesn't acknowledge it, he won't have to deal with it. You suspect that you'd be fired, so I'm sure you need to get your resume together and start looking for a new job before you go in there. But, go in you must because this also relates to your responsibility to protect your people.
Do not allow your manager to threaten your people any more. Tell him that he can yell at you all he wants, but your people are your responsibility and you will handle it. When he bursts into the room and screams that they are stupid. You must (and I mean must) ask him to step outside with you. "I will be happy to resolve any problems with you, but you must tell me about them first."
This will probably not stop him from screaming, but you must keep defending their work. "Jill is not incompetent. She [give solid example] and [another example]. Pablo took extra steps to ensure satisfaction from [big customer]. My people are doing a great job. If you have a problem with their performance, address it with me and I will take it up with them."
Three things might happen. 1. He might fire you on the spot for "insubordination," but the reality is that could happen anyway because raging idiots are, well, idiots. 2. He will continue to rage or 3. (Hopefully) He will realize that he cannot attack your people anymore so he will retreat.
But, something else will happen regardless of what happens above. Your people will know that you value them. And that will help their morale. It's easier to deal with a raging boss's boss when your boss is actively praising and protecting you. Their performance will increase when they know that you are on their side.
But, you are right. There is no safe way to handle this. Safe, however, isn't an option here anyway, and you know it. So, do the right thing, for the business, for your employees and for yourself. Tell the owner, stand up to the jerk and protect your people.