People don’t always realize how important a strong, skilled, and experienced Chief Operating Officer (COO) is. Out of all of your senior management roles, this position will play a critical role in driving toward achieving company goals on a daily basis. This article will help you understand the criticality of the role of the Chief Operating Officer, how a Chief Operating Officer & Chief Executive Officer work closely with one another, and what your company needs in order to achieve its goals.
This role will work with human resources, operational functions, and business operations from C-level executives, senior vice president and staff focused on the company’s operations to ensure that the execution of the organization is aligned with the CEO’s vision.
The top five reasons to consider hiring a COO:
- Freeing Up Focus – As the CEO, it is your job to focus on the future and strategy while the COO focuses on the present day-to-day operations. The CEO-COO relationship has to be a close one with a good level of trust.
- Delegate & Conquer – The COO will manage and delegate tasks so that you, as the CEO, can focus on what you’re good at – making decisions about the future. From business administration to execution this individual has the ability to delegate tasks as well as roll up their sleeves and execute.
- Strong Leadership Skills – given the extensive experience of a COO their leadership skills can be leveraged to provide mentorship, build morale and implement systems.
- Strategic Thinking – Improved Efficiency and Productivity – a COO can help to streamline systems and processes resulting in increased efficiency and productivity
- Talent Development – as a people-focused role, the COO is in a great position to identify and cultivate talent. Aids in the development of individual job descriptions.
- Change Agent – in both minor and major organizational change the COO can work across the functions in an organization to best understand perspectives, company culture, the company’s vision and work as a change agent to implement needed change that will support the organizations growth.
- Compliance and Risk Management – the COO plays an important role in ensuring compliance with regulations and managing risks associated with the business. focus on numbers, metrics, and ROI can result in significant bottom-line growth for your company.
1. Examples of companies that have a Chief Operating Officer
As we look at getting started with the importance of having a COO, I thought it might help to first go through organizations that have scaled because of having someone focus on the details that need to be executed. The COO typically has key responsibilities that continue to evolve and support the management team. In many organizations, the COO is the highest-ranking executive next to the CEO.
The first place that we started to see the COO roles evolve was in the airline and automotive industries. From there, this role has continued to extend to high-tech companies and even into life sciences.
A great example outside of our industry
is Facebook’s previous Chief Operating Officer, Sheryl Sandberg, who joined the company in 2008. She was instrumental in helping them to grow from 100 million to 2 billion users.
At Airbnb, they had a COO, Laurence Tosi who was brought on in 2011. He helped Airbnb scale from 10,000 listings to over 2 million. His critical involvement in the organization helped the organization scale.
At Stripe, Claire Hughes Johnson is the COO who has helped the organization to manage over 1 Million subscribers and 13,000 transactions every second.
Closer to home in life sciences, Catalent, the CDMO with $9B in revenue and 14,000 employees also currently employs Alessandro Maselli as their COO.
These are just a few examples of organizations that have COOs who have helped them to achieve massive growth. If you’re looking to follow in the footsteps of these giants, then consider hiring a COO for your own organization.
The reality is that as organizations scale there needs to be a senior executive that is focused on the broader execution of the vision at the company. That is the responsibility of the COO position.
2. Role of Chief Operations Officer (COO)
Now that we have looked at examples of companies that utilized a COO, let’s explore the role of a COO. The role of a COO is to make sure that an organization runs smoothly. They are responsible for the day-to-day operations of a company and ensuring that all the pieces work together efficiently.
They work closely with the Chief Executive Officer to develop and implement strategy while also ensuring that everyone in the organization is aligned with the company’s goals. A COO is a vital member of a company’s leadership team and can help take a company to the next level because they are responsible for the critical direction of the team leaving the CEO to focus much more on the strategy and higher-level organizational direction.
3. Why you should consider fractional COO services
As companies grow, so many organizations need critical support from a COO urgently. Many organizations experience rapid growth and along with that growth you need to have the structure to support the staff that you need to bring into the company. Unfortunately, many leaders cannot afford experienced COO services and without an heir apparent. It is not as simple as taking an operations director and making them the COO. This then leaves them in the position of potentially hiring someone from the outside that is inexperienced, and may not provide all of the potential value that could be delivered. This is where fractional COO services can come into play.
Fractional COO services give organizations the ability to work with experienced Chief Operating Officers on a part-time or project basis. This allows companies to get the support and expertise they need without having to make a full-time commitment.
Additionally, a fractional COO can build a leadership succession plan that can help to examine a potential heir apparent or even build a potential external pool of great candidates that are currently in a senior executive role. Fractional COO’s can work with the human resources department, chief executive levels and other senior executives to build a long-term succession plan.
4. What are the benefits of having a COO position in your company?
There are many benefits of having a COO in your company. The COO Role has broad business execution and business administration responsibilities. Here are just a few:
- A COO can help take some of the day-to-day business operations burden off of the Chief Executive Officer.
- A COO can be a sounding board for the CEO and help with decision-making.
- A COO can help develop and implement an operations strategy for growth looking broader than a particular initiative to both the long-term strategy as well as the current state of the company.
- A COO works closely with individuals and executives to help build and manage teams, build company culture and work across multiple departments to increase the company’s performance.
- A COO can help with financial planning and management.
- A COO will help to establish processes and role responsibility.
- A COO can build out program visibility for the senior leadership team providing better project transparency.
- A COO will establish metrics and performance criteria for the organization and has the data analysis capability to go deeply into the numbers while having the communication skills to help translate the numbers into action.
- A COO will work with HR professionals to evolve staffing plans.
5. How to find and hire the right COO for your company
What qualities should you look for in a Chief Operating Officer? When you are looking for a COO there are certain qualities that you should look for:
The ability to take on operational responsibility: A Chief Operating Officer needs to have the business acumen to take on operational responsibility and be comfortable with that. They need to be able to think about the operational side of things and how to improve it.
The ability to work with and support the CEO: A COO needs to be able to work with and support the CEO. They need to have a good relationship business acumen and be able to communicate well.
The ability to develop and implement strategies: A COO needs to be able to develop and implement strategies. Can work with executive management to implement the CEO’s strategy. They need to be able to think about the big picture and how to move the company forward. Build plans
The ability to build and manage teams: A COO needs to be able to build and manage teams. From the senior management team (Senior Executive Vice President) to the individual workers needed in a lab. They need to be able to find the right people for the right roles and then manage them effectively.
The ability to think about the financial side of things: A COO needs to be able to think about the company’s internal affairs and financial side of things. They need to be able to understand financial statements and make decisions that are in the best interest of the company.
These are just a few of the qualities that you should look for in a COO. If you can find someone who has these qualities, you will be well on your way to finding the right COO for your company.
Here are questions to ask when interviewing potential candidates for the COO role:
1. What experience do you have in a leadership role?
2. What experience do you have in operational roles?
3. What experience do you have in financial planning and management?
4. What experience do you have in team building and management?
5. What strategies have you implemented in your previous roles that have led to success?
6. What do you feel are the most important qualities for a successful COO?
7. Provide examples where you have had to act as a change agent and the process you used.
8. What do you feel sets you apart from other candidates that have operational experience?
In most small to medium-sized businesses, the COO role description includes implementing scalable business strategies. Unlike others on the senior executive team (i.e. Chief Financial Officer who is solely focused on corporate finance), the COO’s responsibilities are extremely broad. The Chief Operating Officer (COO) would attend executive team meetings and frequently report on the performance of business operations.
I hope that this article has been helpful to you. If you happen to have any questions, please let me know. Additionally, please check out our free resources, the Implementing OKR’s course or the Organizational Maturity Assessment. Thank you.
- Chief Operating Officer (COO): Definition, Types, Qualifications – https://www.investopedia.com/terms/c/coo.asp#toc-what-is-a-chief-operating-officer-coo
- COO job description – https://resources.workable.com/coo-job-description
- The Role and Responsibilities of the Chief Operating Officer – https://onlinebusiness.umd.edu/blog/the-role-and-responsibilities-of-the-chief-operating-officer/
- Chief operating officer – https://en.m.wikipedia.org/wiki/Chief_operating_officer
- The role of a COO: key duties and responsibilities – https://www.travelperk.com/blog/role-of-coo-duties-responsibilities/