The COO or Chief Operating Officer is believed to be the successor of the CEO. He is the second in command or the co-pilot who handles the internal mess while the CEO puts up a good face for the company. If you are an aspiring COO, here’s what you need to know.
What is COO?
The COO is a member of the C-Suite who is responsible for the day-to-day activities of the organization. The COO reports directly to the CEO and often sits in for the latter in his absence. Also known as the Executive Vice President (Executive VP (Operations)) or Operations Director, the job profile of a COO mainly involves executing the organization’s business strategy. The COO frequently sits in for the CEO in the latter’s absence. It is for this reason that many consider the COO to be the second in command after CEO. However, some put the CFO in this position.
Debate notwithstanding, the roles of both COO and CFO are critical for any organization.
Responsibilities of a COO
A recruiter hiring for the post of COO would typically post something like this:
- Lead the organization and ensure that the staff, managers, and activities align with business goals.
- Assist the executive team in creating a business strategy.
- Generate expected results for the organization and its stakeholders by working closely with the CEO and other members of the C-Suite.
- Work closely with the CFO to achieve positive financial results, manage cash flow, and control expenses.
- Partner with the CHRO to determine and achieve growth, performance, and other KPIs.
- Create and monitor KPI measuring tools.
- Generate and present reports regarding the status of operations.
- Lead implementation of growth strategies.
- Generate, manage, and monitor various operational and other processes.
- Help the CHRO to motivate employees and leaders within the organization.
- Maintain relationships with external stakeholders like vendors, clients, and so on.
- Foster a growth, learning, and motivating environment within the organization.
To succeed as a COO therefore you must possess multiple and diverse skills. For instance one of your duties is to ensure that employees’ personal goals are aligned with corporate goals. You should therefore possess the ability to understand corporate goals, personal goals, and the strategy required to align the two. But since the ultimate goal of any organization is to drive revenue, knowledge about how finances work is also important.
You should be aware of the business model of your organization, the internal hierarchy, how startups and businesses work, and in general, be able to navigate the company through the various stages of the business cycle. In short, you should possess almost all the skills required to be a CEO. Still wondering why COO is called the second in command?
Types of COO
Every organization is different depending upon its size, its stage in the business cycle, and the preferences of the CEO. As Harvard Business Review puts it, there are almost no constants. Unlike the roles of the other members of the C-Suite – which are relatively well-defined, the role of a COO is considerably dynamic and dependent on multiple variants. The route you take to reach the position of a COO is also an important factor in defining your job scope.
It is therefore difficult to generically describe the roles and responsibilities of a COO. Investopedia has attempted a categorization and identifies seven different types of COOs. We’ve identified the route that these candidates are likely to come from:
- The Executor-COO executes the strategy created by the C-Suite and delivers results. The executor is most likely to come from a production or marketing background.
- The Change-COO leads new initiatives like expansion, growth, and a structural change in the organization, and takes them to fruition. The Change driver is likely to be an innovator, MBA, and business model expert.
- The Mentor-COO whose responsibility it is to mentor and guide younger executives and typically grooms them to become a part of the C-Suite. This type of COO is most likely to travel the HR route.
- The MVP (Most Valued Person)-COO is retained at any cost either because he brings value or to ensure that important company information is not passed on to competitors – or both. This COO is perhaps a prodigy or mentee of the CEO. Or he may have been with the organization for a long time and is privy to many internal secrets.
- The complementary COO is hired to play right-hand to the CEO. Typically, this type of COO will have characteristics and skillset that are contrary to those of the CEO. This is another candidate for the CEO mentee and has likely risen on the coattails of the CEO.
- The partner-COO is hired to act as CEO but remains second in command. This type of COO can be from any background – including mentee – and will most likely succeed the CEO.
- The Heir-COO is typically hired from within business families or is the prodigy of the CEO and takes his place when the CEO steps down. This one is obvious.
How can you become a COO?
Since there are neither any constants nor a clearly defined path to become a COO your background is relatively irrelevant. You may be from any field or background, whether it is marketing, accountancy, or production. What matters is your ability to perform the duties expected of you. Because the role of a COO is closely aligned with that of the CEO, the first requirement if you want to become a COO is to be versatile, adaptable, and flexible. With that in mind, here are the qualifications, skills, and experience typically expected of a COO:
- Bachelor in Business Studies or a B-School graduate
- MBA – Masters in Business Administration – ideally from a top-rated B-School.
- Experience of more than five years in an executive role – ideally in operations or production though people from other areas can apply too.
- Business skillset including understanding business processes, presentation skills, communication skills, and adaptability.
- Knowledge of budgeting and finance and a good understanding of the industry landscape as well as legal compliance requirements.
While those qualifications will generally put you on the path to becoming the COO here are a few other things you should know.
COO in the Driver’s Seat
As we’ve said many times, the ultimate goal of any organization or business is to drive profit and business growth. As COO it is your job to translate the numbers shared by the CFO into meaningful KPIs keeping in mind the business strategy of the company. You will also monitor the KPI’s and motivate the employees to attain them. It befalls you to ensure that team leads are doing their bit to motivate and encourage the teams. You’ll likely monitor the KPIs of teams rather than individuals but you must also keep an eye open for underperformers and miscreants.
Since your role often overlaps with that of the CEO, your relationship with the latter will affect every decision you make. Your equation with the CEO is therefore extremely important. There must be complete trust in the relationship as well as clarity in communication along with mutual respect. You should watch out for miscreants trying to disrupt the relationship as well as keep a tight rein on your rigidity, misconceptions, and ego. You must not only share but also believe in the vision of the CEO and the organization as a whole. You must remain focused on execution rather than preening in the spotlight – you’ll get that chance when you succeed the CEO – and most importantly you should be able to put aside your ego in a snap.
The role of the COO is perhaps the simplest to describe – the “inside” CEO as against the “outside” CEO. And yet it is the most complex because there are no clearly defined roles and responsibilities. Nor is the path to becoming COO clear – almost anyone from any department can aim to become COO.
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