Why resilience and agility have become central to the COO role

Those who head up oper­a­tions at many firms increas­ing­ly need an ambidex­trous approach. On the one hand, they must deliv­er growth through busi­ness agili­ty, which involves inno­vat­ing at pace. On the oth­er, they need to deliv­er a resilient organ­i­sa­tion; one that is sta­ble, secure and pre­dictable, where new oper­a­tional threats and risks must be over­come. Mar­ry­ing the two isn’t easy.

The litany of chal­lenges that now test chief oper­at­ing offi­cers is long, whether it is dig­i­tal and data-led trans­for­ma­tion, the Covid pan­dem­ic, Russia’s war in Ukraine, soar­ing ener­gy and com­mod­i­ty prices, sup­ply-chain con­straints, the sus­tain­abil­i­ty agen­da, evolv­ing cyber risks or new reg­u­la­tion. At the same time, COOs must ensure firms stay ahead of the com­pe­ti­tion and gen­er­ate new busi­ness.

This year’s World Eco­nom­ic Forum’s Glob­al Risks Report is a good illus­tra­tion of why busi­ness­es need a belt-and-braces approach: 42% of the 12,000 glob­al busi­ness lead­ers sur­veyed said the out­look for the next three years would be “con­sis­tent­ly volatile with mul­ti­ple sur­pris­es” while 38% expect­ed “frac­tured tra­jec­to­ries sep­a­rat­ing rel­a­tive win­ners and losers”.  

Yet many firms strug­gle to com­bine oper­a­tional resilience with busi­ness agili­ty, whether that’s to do with siloed busi­ness units and the data they hold, lega­cy sys­tems, tra­di­tion­al ways of doing things or the sheer com­plex­i­ty of organ­i­sa­tions. But the past few years have shown that many firms are more resilient and agile than they may have thought – able to adapt and thrive, as well as absorb shocks. 

“There are many lessons to be learned from the pan­dem­ic, in cir­cum­stances where we were forced to be agile,” says Kate Ston­estreet, glob­al chief oper­at­ing offi­cer of law firm Bak­er McKen­zie. 

The chal­lenge, she says, is to retain this flex­i­bil­i­ty mov­ing for­ward and embed it in a company’s cul­ture. “This will posi­tion busi­ness­es well for the com­ing years, the poten­tial down­turn or any future crises we may face,” she explains. 

Ston­estreet believes agile work­ing enables firms to be resilient, allow­ing “real-time respon­sive­ness” that cre­ates strength in oper­a­tions. It also facil­i­tates effi­cient deci­sion mak­ing if it’s under­pinned by good gov­er­nance that is aligned with strat­e­gy,” she says. 

“Agili­ty, while not always easy to achieve, allows for a speed of response that is cer­tain­ly nec­es­sary in the cur­rent cli­mate.”

Driving ambition 

There is an increas­ing real­i­sa­tion that, with the right peo­ple, process­es and plat­forms in place, resilience and agili­ty can go hand in hand; that these qual­i­ties aren’t at log­ger­heads with each oth­er but are instead com­pli­men­ta­ry. Both are fun­da­men­tal to deliv­er­ing busi­ness per­for­mance while min­imis­ing risk. And it is the COO, rather than any oth­er top-lev­el exec­u­tive, who should be the one to deliv­er.   

“The COO – the exec­u­tive leader shad­ow­ing the CEO – found them­selves at the cen­tre of all busi­ness activ­i­ties through­out the pan­dem­ic, and this posi­tion of enhanced influ­ence, vis­i­bil­i­ty – and, in many cas­es, man­date – has been car­ried for­ward into many a post-pan­dem­ic oper­a­tion,” says Mau­rice Evlyn-Bufton, chief exec­u­tive offi­cer of COO finan­cial ser­vices advi­so­ry firm Arm­strong Wolfe.

“The chief oper­at­ing offi­cer also sits at the cen­tre of each com­pa­ny and there­fore is well posi­tioned to over­see the adop­tion of resilience and agile poli­cies, and their gov­er­nance,” he says. “It is their influ­ence on the CEO that is key to suc­cess.” 

Evlyn-Bufton likens the agili­ty and resilience bal­anc­ing act to For­mu­la One rac­ing. While the objec­tive is to go as fast as pos­si­ble – to be as respon­sive and agile as you can to chang­ing cir­cum­stances – you still need to use the brakes some­times to ensure you fin­ish the race. 

“Rac­ing engi­neers work with this dual­i­ty all the time,” he says. “It is a par­tic­u­lar frame of mind that is need­ed to mar­ry the two, as opposed to bal­anc­ing them.”

It may not be fea­si­ble to do every­thing, so pick the key ini­tia­tives that are fun­da­men­tal to sup­port­ing and pro­tect­ing the busi­ness

Hav­ing a clear oper­a­tional strat­e­gy and an organ­i­sa­tion­al design in place mat­ters. When look­ing to make a firm more resilient, a good start is to map all busi­ness process­es, work out whether you have the right tal­ent, sys­tems and tech­nol­o­gy to deliv­er on this, then pri­ori­tise change accord­ing­ly.   

“True resilience comes from know­ing when and how to rewire the process­es, and that requires peo­ple in the organ­i­sa­tion who under­stand the big pic­ture,” says Dr San­dra Bell, group head of organ­i­sa­tion­al resilience at Novu­na, a finan­cial ser­vices firm. 

Her advice is always to focus on the peo­ple and cul­ture; the rest will fol­low. “Organ­i­sa­tions are com­plex socio-eco­nom­ic sys­tems and will behave in unpre­dictable ways. To be resilient, you need peo­ple who can sense when things are going wrong, know when to stand fast, yet are will­ing and able to alter what they are doing to bring things back on course.”  

Hav­ing a high-per­form­ing team around the COO that col­lab­o­rates effec­tive­ly is cru­cial. The chief of oper­a­tions must also have a firm eye on cus­tomers, be agile them­selves – will­ing to embrace change, chal­lenges and com­plex­i­ty – with a strong com­mit­ment to deliv­er on short- and long-term goals, and to be account­able for them, too. 

Some busi­ness­es have advo­cat­ed the intro­duc­tion of new roles, such as oper­a­tional resilience cham­pi­ons, to sup­port such ini­tia­tives. But while these roles can help to pri­ori­tise the deliv­ery of oper­a­tional resilience, they can also end up delin­eat­ing it from busi­ness agili­ty, which can be prob­lem­at­ic for firms try­ing to bring the two togeth­er.

In praise of processes

Rely­ing on top tal­ent to bridge the gap between oper­a­tional resilience and busi­ness agili­ty is one thing but it isn’t a fail-safe in the long term. Staff “churn” can leave firms vul­ner­a­ble. This is where COOs need to put in place robust and repeat­able process­es, with strong con­trols that are informed by data and its asso­ci­at­ed tools (see box). 

Sys­tem­at­ic approach­es are vital, which is why some busi­ness­es have adopt­ed “design think­ing”, which enables prob­lem solv­ing cen­tred on cus­tomer needs. Oth­ers have fol­lowed the Six Sig­ma approach and oth­er such tools that can sup­port process improve­ments. The aim is to pro­vide bet­ter struc­ture to oper­at­ing mod­els, although whole­sale adop­tion of such approach­es can be daunt­ing and time-con­sum­ing.   

“It may not be fea­si­ble to do every­thing, so pick the key ini­tia­tives that are fun­da­men­tal to sup­port­ing and pro­tect­ing the busi­ness, and think about whether you have the right organ­i­sa­tion­al design in place to get you there,” says Jacque­line King, chief oper­at­ing offi­cer for DLA Piper, a glob­al law firm. 

Any busi­ness can set a course to man­age risk, con­tin­gency plan and put robust secu­ri­ty in place, she says. “The art is to iden­ti­fy areas of oppor­tu­ni­ty in the mar­ket and to be one step ahead, while ensur­ing a flex­i­ble mod­el is in place that allows the busi­ness to inno­vate and adapt to change.” 

New leg­is­la­tion, com­pli­ance and evolv­ing gov­ern­ment poli­cies are spark­ing invest­ment in bet­ter frame­works, whether it’s fresh rules on oper­a­tional resilience intro­duced by reg­u­la­tors, such as the Finan­cial Con­duct Author­i­ty in the UK, or the Euro­pean Commission’s Dig­i­tal Oper­a­tional Resilience Act. 

The art is to iden­ti­fy areas of oppor­tu­ni­ty in the mar­ket and to be one step ahead, while ensur­ing a flex­i­ble mod­el is in place

In some cas­es, a lack of action is no longer an option. Reg­u­lat­ed busi­ness­es now must show that they can con­tin­ue to pro­vide ser­vices in the face of adverse and dis­rup­tive oper­a­tional events. They will also have to demon­strate that they can antic­i­pate, pre­vent, recov­er from and adapt to such events and learn from them – no small feat. 

But while it’s true that busi­ness­es have finite resources – and COOs have to con­tin­u­al­ly work out where to allo­cate time, resources and peo­ple – King believes resilience and agili­ty can com­ple­ment one anoth­er “if the organ­i­sa­tion­al mod­el is designed in the right way”.

What to do when goals are misaligned

One of the rea­sons why resilience and agili­ty are hard to deliv­er at the cor­po­rate lev­el is that busi­ness units can be at odds with each oth­er. It’s not sim­ply a mat­ter of IT, cyber­se­cu­ri­ty and oper­a­tions teams being focused on secure, sta­ble ser­vices, while mar­ket­ing and sales want to break the mould and be agile as they press on with inno­v­a­tive prod­ucts, but it serves as an exam­ple. 

If you have a chief infor­ma­tion secu­ri­ty offi­cer, a busi­ness devel­op­ment lead and an oper­a­tional resilience offi­cer, it’s impor­tant that their goals are aligned. 

“Rather than sink into a ‘who’s right and who’s wrong?’ bat­tle at a busi­ness unit lev­el, when the real­i­ty is that every­one is right from their indi­vid­ual per­spec­tives, the smart COO cre­ates a vision for the whole organ­i­sa­tion,” says Bell. “They cre­ate con­sen­sus by help­ing the dif­fer­ent parts of the busi­ness to under­stand how the resilience of their part of the busi­ness con­tributes towards it.” 

The same is true of busi­ness agili­ty. 

Com­pa­nies will need to get both aspects right if they’re to be suc­cess­ful in the years ahead. The secu­ri­ty and threat land­scape is con­stant­ly evolv­ing. At the same time, firms don’t stay at the top of their sec­tor for long unless they are inno­vat­ing at pace. Hav­ing a “liv­ing” busi­ness plan in place; one that evolves day to day, helps. 

“The trick is not to sti­fle the busi­ness with, say, water­tight secu­ri­ty pro­ce­dures but allow for busi­ness flex­i­bil­i­ty with the right con­trols in place,” says King. 

It’s that “flex” that every busi­ness is look­ing to mas­ter. The COO who gets it right on all counts will be worth their weight in gold. 

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