Outlook for the Chief Operations Officer Role
What You Need to Know Right Now to Level Up as a COO
Google search results for “COO trends” include the 2011 Harvard Business Review article, “The Rise of the COO,” immediately followed by the Forbes 2015 article, “The Decline of the COO.” Which is it? This article explores the state of the Chief Operations Officer (COO) role, as well as providing suggestions for those aspiring to the role.
SAP COO Dave Spencer on CIO.com refutes any decline, noting the COO role has “never been more important.” Spencer asserts, “the function of COO has evolved to become not just about resources and efficiencies, but about people, collaboration, and empowerment.”
The COO is often seen as something of a partner to the CEO; in fact, some experts suggest the individuals holding these two roles should have personalities that complement each other so the COO is a “counterbalance” to the CEO. Because of this tight partnership, the question arises whether the COO outranks other C-suite officers. Generally, all officers report to the CEO, even as the COO is considered second in command. COOs may also have additional functions, such as marketing, attached to their roles.
Research by Nathan Bennett and Stephen A. Miles in Harvard Business Review reveals seven types of roles for COOs in relation to CEOs: Executor of the management team’s strategies; change agent who facilitates organizational transformation; mentor, perhaps guiding a less experienced CEO; “the other half,” who complements and balances the CEO; a partner working as half of a pair with the CEO; heir apparent expected to eventually take over for the CEO; and MVP, a superstar placed in the COO role to keep him or her from being lured by other organizations. (Hint: Becoming a superstar in your organization will increase your chances of becoming COO).
While Facebook’s Sheryl Sandberg is one of the world’s most famous COOs, the role appears not particularly welcoming to women, though exact statistics are hard to come by.
COOs oversee day-to-day operations of key departments, develop procedures and processes to keep those operations running smoothly, and update the CEO with key operational information. The incumbent may also oversee the human-resources function.
Key Competencies for the COO Role
The role of COO is possible with just a bachelor’s degree, though a master’s degree, especially an MBA, will add to the individual’s marketability. Those without an MBA may want to consider an online short course offering an operations-management certification. Organizations typically seek at least 15 years in management, with a significant portion of that also involving staffing or HR.
More than for other C-Suite roles, experts suggest humility and lack of ego for COOs. The reasons are unclear, but they may relate to the idea of counterbalancing the CEO, given that CEOs don’t usually have humble reputations.
Leadership skills are a given for COOs. In your career-marketing communications, showcase the additional COO competencies and characteristics on this list you possess:
- Cross-departmental knowledge
- International experience
- Thinking that is both strategic and detailed
- Courageous and data-driven decision-making
- Sociability, an appreciation for talent, and a passion for performance
- Acumen in both business and financial management
- Excellent written, oral, and client-facing communication skills
Here are a few suggestions for those seeking to break into the COO role, expand their horizons in an existing COO role, or even rise beyond the COO role:
- Get to the meat of the job. Alexander Tuff, COO and head of strategy at Winged Keel Group describes his cluelessness of the job upon being appointed as COO in charge of 600 people at CIT Group, even after 15 years of “skill accumulation.” Three COO roles later, Tuff identified key functions of a good COO:
- Fill leadership gaps
- Fix big issues
- Execute core strategy in concert with senior leadership.
“Most importantly,” Tuff advises, “a COO needs to be an effective communicator and collaborator with whom people want to work.”
- Take advantage of situations in which an effective COO is critical to an organization’s governance. While Gary L. Neilson wrote in 2015 of the decline of the COO role, he cited situations would-be COOs might be able to capitalize on:
- When companies want to show they have a handle on succession planning by appointing a COO as heir-apparent to the CEO.
- When the CEO needs to place an unusually strong emphasis on strategic concerns.
- As previously mentioned, when a counterbalance of skills and personalities between COO and CEO is called for. Spencer notes that CEOs are increasingly expected to be the public faces of their organizations. That means COOs must step into representing the company to employees.
If you seek an internal promotion to COO, keep your eyes and ears open to tap into these potential situations. If you seek a COO role from outside, rely on research and your network to keep you informed of compatible opportunities.
- People come first. People may not immediately come to mind when we think of “operations,” but the COO role, says Spencer, needs to go beyond “resources and efficiencies” and instead should focus on “people, collaboration, and empowerment.” Spencer adds that “trust has become the driving metric for the modern COO.”
- Consider one or more interim COO positions. Desmond Pieri has built an entire career as an interim CEO and COO, completing 25 such roles since 2000. As he points out in his blog [https://changeagentdes.com/] about his experiences, “most startup CEOs in high-growth mode would love having a COO, but they don’t want the long-term addition to payroll.” The typical reason Pieri is hired as an interim COO, he says, is “when a CEO wants more bandwidth for a period of time, often during a period of rapid growth.”
- Know that the COO role provides a solid path to CEO. As of 2015, Forbes reported, 44 percent of current CEOs were COOs before climbing to the top of the ladder.
COO Trends to Watch
- Greater responsibility at greater speed. The plates of COOs grow ever fuller, and the expected speed with which initiatives need to be implemented is increasing. In the banking industry, for example, more than 90 percent of COOs in a study believed initiatives and projects under their purview had increased during the past 3 years, with 75 percent also citing an increase in expected implementation speed in the same period (from “COO Agenda 2020—Trends and Need for Action in Banking from A COO Perspective,” by Ehlerding, Herkert, Willbold-Majling, Müller, and Neuberger.)
- COO as driver of digitalization of business processes. More work at greater speed requires end-to-end process optimization. Ehlerding et al suggest the COO therefore needs to act as driver of digitalization of business processes.
- Growth of companies in both size and complexity raises operational challenges. Strong COOs are needed to connect the dots among technology, finance, and leadership needs.