The majority of businesses have growth objectives. Many companies, I’m not sure, desire to generate less money or reach fewer people over time. A corporation, on the other hand, cannot simply produce more money, acquire new customers, or expand its workforce overnight. To enable this type of growth, an experienced leader must use intention and plan.
So in steps in a COO. A chief operating officer (COO) is a c-suite executive who is in charge of directing a company’s operational activities. Individuals in this position often report to the CEO and serve as the company’s second-in-command. If a company has a chief operating officer, this person is likely to be well-versed in the business and industry, and is often in charge of ensuring that the company’s operational model is running smoothly.
The COO must understand how the company’s core operations (such as product, finance, marketing, and service) work together to provide a pleasant customer experience while meeting important business objectives.
A typical vice president or director of operations is responsible for directing, managing, and running a company’s operations. Despite the fact that operations is one of a company’s most diverse roles, this position has a single concentration. Many people are confused about the exact purpose of this operations position because it reports directly to the CEO. The CEO usually expects COO functionality, but these roles aren’t usually capable of it, and they aren’t usually compensated suitably for it.
All other C-suite positions, such as the chief financial officer or the chief information officer, are laser-focused on their respective functions. These positions are often knowledgeable about their function’s strategic, operational, and tactical components, as well as how they serve the firm. Individually, they may not understand how all of the positions fit together.
The phrase “operational” is what genuinely distinguishes the COO from the rest. A COO understands how everything in a firm, every function works together strategically, operationally, and tactically to deliver products and services effectively and efficiently. This role brings together the company’s strategy and business plans, as well as the company’s business operating system, operating model, and organizational structure.
This is why the word “operating” is so crucial in the title of this position. Even if the COO isn’t a specialist in all things financial, technology, or sales, they are familiar enough with each to understand how they interact. They understand that every business is a system of systems that must work together to perform properly.
When it comes to the requirement for a COO, there are numerous variables to consider. The company’s size and revenue are the initial considerations. One of the key reasons why a fractional COO can be a good idea is because of this. The appropriate COO is a high-paying job with excellent perks and bonuses. You won’t be able to hire the right people if your firm isn’t big enough or profitable enough.
Occasionally, the CEO or president takes on the role of COO. The most concerning aspect of this arrangement is that the CEO is acting as a visionary and integrator. This is one of the ways they get hooked into working “on” the business rather than “in” it.
When a COO is absent but a president is present, the president usually reports to the CEO and is in charge of the company. This does not, however, imply that the COO and the president are the same person. There may be a COO in a particularly large corporation, with presidents controlling several divisions.
When it comes to growing a firm, having a qualified chief operations officer is critical. You may drive this type of transformation as a chief operating officer, which can be a terrific opportunity for aspiring corporate executives. The COO’s diverse and evolving responsibilities clearly reflect the challenges and complexities of operating a successful worldwide corporation. From helping to develop a winning culture for employees to dealing with investor pressure and staying ahead of the competition, the COO is frequently the steady hand on the ship, gently guiding the ship through the ever-changing waves of modern business.
One of a COO’s responsibilities is to oversee the execution of the top management team’s strategies. It’s merely a concession to the CEO’s current complexity and scope, which includes multiple external commitments. Managing large, frequently worldwide organizations often necessitates two sets of hands; in such circumstances, the COO is typically in charge of providing results on a daily, quarterly, and quarterly basis. This is why the COO role is practically universal in enterprises that are operationally heavy, such as the airline and automobile industries, as well as organizations that compete in hypercompetitive and dynamic marketplaces, such as high-tech companies.
The major motivation for creating a COO job is to groom or test a company’s incoming CEO. The job’s vast scope allows an heir apparent to gain a comprehensive understanding of the company’s operations, environment, and people. Certainly, being designated as a prospective heir does not imply that you will inherit anything. On the one hand, if the top job eventually goes to someone else or isn’t provided fast enough, an otherwise valuable senior executive may quit. The performance of the COO may also indicate that the heir title was granted erroneously or early.
Some businesses choose a COO to oversee a specific strategic objective, such as a turnaround, a substantial organizational change, or a planned rapid expansion. While the mandate is not as broad as general strategy execution, the scale of the task necessitates that the change-agent COO have unchallenged authority comparable to that of an executor COO.
Check out my related post: What is a chief strategy officer?