Outlook for the Chief Administrative Officer Role
What You Need to Know Right Now to Level Up as a CAO
The C-Suite’s closest cousin to the Chief Administrative Officer (CAO) is the Chief Operating Officer, and indeed, the titles are sometimes used interchangeably. A common role for the CAO is to serve as an intermediary between the Chief Executive Officer (CEO) and department heads, overseeing functions such as finance, sales, human resources, and marketing. The Chief Administrative Officer monitors departmental performance and reports back to the CEO.
One motivation for hiring a CAO is the underperformance of one or more departments. The CAO in that scenario will likely get involved in setting success metrics, analyzing progress toward goals, and keeping the CEO up to speed with the department’s quest for success. The CAO will also often collaborate with departments that lack a C-Suite presence. Because of their intricate departmental knowledge, CAOs are C-Suite influencers with insider expertise.
In a case study about bringing on a CAO, executive-search firm Helbing & Associates, Inc., shared its client’s motivation for hiring this role: “[A] multi-billion dollar contractor, and longstanding partner of Helbling, sought to secure a Chief Administrative Officer who would provide additional depth to their C-suite, create a unified corporate service culture, and develop a long-term operational strategy.” The client company sought to collapse six corporate service areas – human resources, information technology, safety, risk management, legal, and compliance – into a single unit, thus “creating the Chief Administrative Officer (CAO) role [that] would provide structural relief to the CEO’s reporting structure and allow a new leader to dedicate themselves full-time to those six areas.” The selected candidate had been a Chief Operating Officer of a similar firm who offered the client’s desired “combination of operational, strategic leadership, profit/loss management, and corporate service experience and knowledge.”
The case study noted that talent pool was shallow for the CAO role. Aon Hewitt reports that, across all industries, just 20 percent of businesses have a CAO role. Insurance firms are the most likely (35 percent) to have CAOs, with the retail and financial sectors following, and the manufacturing sector having the fewest CAOs. Other industries include physician practices, law firms, universities, and municipal agencies.
Key Competencies for the CAO Role
The CAO role requires a synthesis of analytics, process, and strategy. A bachelor’s degree is the basic educational requirement; an MBA is an extra selling point.
When preparing career-marketing communications to send to employers, those aspiring to the CAO role should emphasize these qualities:
- Solid managerial experience
- Working knowledge of government businesses regulations
- Excellent written, interpersonal, and verbal communication skills, including facility with briefing CEO on departmental progress
- Strong leadership and team working abilities
- Decision-making skills
- On-time/on-budget project management.
- Ability to deliver instructional leadership to department managers
- Ability to contribute to developing and implementing strategic plan
- Administrative policy-making; evaluating and updating company policies as needed
- Budget planning and development
- Ability to establish success metrics and analyzing department data against goals
Here are a few suggestions for those seeking to break into the CAO role, expand their horizons in an existing CAO role, or even rise beyond the CAO role:
- Be sure the CEO is involved in hiring. If you’re under consideration for a CAO role, ask about how you will interact with the CEO. Rapport between CEO and CAO is important. “Because of the great deal of collaboration that will likely happen between the CEO and the CAO,” reports Study.com, “the CEO should always be on board when a CAO is chosen for the company.”
- You could be next. “CAO is considered one of the key stepping stones to the CEO position,” notes Alicia Betz. Since the CAO is often the CEO’s right-hand person, this succession scheme is natural in some organizations.
- Demonstrate your ability to make high-level/high-complexity decisions. Fast Company’s Jared Lindzon notes that CEOs are increasingly delegating tasks to their C-Suite executives, and “chief administrative officers will help relieve CEOs and COOs of some of their day-to-day tasks, allowing them to put their time and effort towards critical, big-picture decisions.”