Defining the Role of a COO

Amit Agarwal
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Amit Agarwal

Amit Agarwal

Do you think world’s most gifted baseball team can win a competitive basketball match? The answer will be a no. The reason is simple that skills which we acquire in one sport cannot translate to another sport.

Similarly, the skills of a Chief Operating Officer (COO) vary with the nature of the industry, company strategy, region and the CEO’s perceptive. As per Accenture Study, of around 220 COOs or equivalent globally since 2009, 45 percent of them think that the COO’s role should be focused more on execution and operations and less on finding growth opportunities or formulating strategy. Additionally, it also says that the exact role might differ with the region. For example, 58 percent of the survey participants from America believe that the COO’s role should be complementing the CEO’s role, and 73 percent of EALA (Europe, Africa, and Latin America) region thinks that the COO’s role should be executor. Thus, it is very difficult to define one universal skill set for a COO.

COO has traditionally been on the second position in the C-suite. But the scope of the role is often open-ended. He/she can expect to come and implement the organization strategy at one level, while dealing with the minutes of operational process and production targets at another level. His/her role will differ with organization/industry. We have few relevant conferences or events organized only for COOs. There are no dedicated magazines or journals targeting them. The reason for it is simple—it is impossible to estimate exact skill sets for a COO.

  ‚ÄčThe skills of a COO vary with the nature of the industry, company strategy, region and the CEO’s perceptive 

Although no two COO positions are exactly the same but there are certain inherent traits that every COO needs to possess. Below are the top seven essential skills to maximize the impact of the COO in every organization:

Strategic Oversight

An organization spends billions of dollars to come out with a corporate strategy, with the help of consulting companies every year. But usually misses out (may be 70 percent) on execution of strategy where the maximum amount of efforts/resources are required and that will be the execution of strategy. A COO needs to play a critical role in ensuring that “strategic initiatives” do not fail and needs to lead the execution of these initiatives but limit his involvement at the strategic level.

Change Management

With technology and customer habits changing ever so quickly, organizations require to transform themselves at a similar pace. A COO needs to oversee and steer the ongoing changes. This is why a COO is also known as “Change Driver”. Additionally, while it may be easy to devise the best strategic and tactical plans it can only be successful if the human aspect of change like company culture, values, people, and behavior are managed effectively. Every company is different and thus, methodology applied will be unique to that company. We can have a library of best practices, tools and techniques for reference but it needs to be changed for every organization depending on the corporate strategy and business environment. The COO will need to emphasise on the importance of efficiency and productivity without worrying about emotions which are critical human issues.

Effective Communication

A COO ensures open communication within all levels of the organization. It also demands an understanding of CEO’s vision. Additionally, the whole team adapts the strategic plan. Changes in company policies/process do change with changing business environment. Thus, it also needs to be articulated both to the employees and the board appropriately, by the COO. Issues raised by employees also need to be communicated back to management for appropriate action. A COO also needs to announce unpopular decisions to the team like layoff of the employees. Thus, it is important that a COO knows how to communicate effectively with different stake holders like employees, clients, and board members. It may sound scary but ambiguous communication can lead to misrepresentation of the actual message and confusion. Thus, effective and timely communication is an important skill.

Precision

There is an ancient saying – “Trust in Allah and tie your camel”. It means you can leave everything to god for understanding. Sadly real life is very different. Everybody here works around on exact-match systems and thus a COO needs to be extremely precise in defining what is expected. The message should be crafted with the belief that words mean nothing unless precisely defined. Everything might be taken literally, so we need to be precise for what we ask for. While COO communication may be polished and perfect to send the right message but when we overdo it then we may miss innovative ideas. Hence, bottom line is to be as precise as you can in terms of what you expect but always leave the potential response completely open-ended. Thus, a COO needs to be precise about what he/she wants but leaves the rest open-ended.

Compliance

Every industry right from financial services to manufacturing is regulated and organizations need to work under pre-defined boundaries defined by the regulator. A COO’s goal is to enforce and set controls within the organization. Stronger operational controls not only enhance the business process, but it also helps to manage risk and avoids compliance failures. It will also adhere to the operational model of the company.

Conflict Management

Conflict is like fire – “which is good or bad” depends on how it is managed. There are disagreements that cause a negative reaction. It can cause problems like stressful working relationships which can be damaging to morale and reduce the productivity. We do have another side of conflict, which open alternative ways or new perspectives that arise in the course of resolving conflict resolution of problems. The best way to manage conflict is to have appropriate policies which will help to build and maintain a discrimination-free workplace.

Collaboration

Teams are supposed to work together to achieve organization goals. The performance will be hindered if teams do not work together. A COO needs to ensure the team is collaborating whenever and wherever possible, to produce results. Also, a COO needs to step in whenever it is required. In short a COO should ensure that collaboration within team always exists. Additionally, to have stronger relationships with the senior management of the organization, a COO also needs to make certain that his/her team is always passionate, confident, and working to get the job done. This will help to build, develop, and retain talented teams. Inspiring the team is a skill which will enable the COO to identify present and potential sources of difficulty and pre-emptively offer solutions to prevent them.

We can conclude that for COO as a class, there are almost no constants. Thus, it is impossible to define exact set of skills which will thrive in all business environments.

It leaves us with this question - does it mean less number of organizations are appointing a COO? Some observers might think it to be true but reality may differ. As I write this article, intercontinental exchange announces a new COO and we can read many companies worldwide are appointing COOs. The current tough business environment is demanding more focus on running the operation of the organization. Thus, we believe we will have more and more organizations looking to hire COOs.

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