The COO’s five key objectives for 2023

Any COO scan­ning the eco­nom­ic fore­casts for the UK at the end of last year could have been for­giv­en for want­i­ng to bat­ten down the hatch­es in 2023. The prospect of a lengthy bout with stagfla­tion doesn’t exact­ly encour­age busi­ness lead­ers to make bold expan­sion plans.

But the smartest oper­at­ing chiefs are approach­ing this year with cau­tious opti­mism. They have formed lay­ered strate­gies that will not only pre­pare their firms for a down­turn but also sup­port growth in care­ful­ly cho­sen areas. They’ve recog­nised that, if they can act prompt­ly, unit­ing all depart­ments in pur­suit of tar­get­ed changes, they’re like­ly to secure a last­ing com­pet­i­tive edge for their com­pa­nies. In pur­suit of such an advan­tage, they’re tend­ing to focus on five key tasks this year.

1. Analyse impending macro changes

COOs have his­tor­i­cal­ly tend­ed to be reac­tive rather than proac­tive. This is chang­ing, giv­en the high lev­el of macro­eco­nom­ic insta­bil­i­ty and dis­rup­tion in glob­al sup­ply chains, along with shift­ing expec­ta­tions among cus­tomers and employ­ees. 

To suc­ceed in this envi­ron­ment, COOs need to “look far ahead, so that they can pre­pare exper­i­ments that fail fast or scale fast accord­ing­ly”. So says Pro­fes­sor Scott Hutch­e­son, senior lec­tur­er in organ­i­sa­tion­al lead­er­ship at Pur­due Uni­ver­si­ty, Indi­ana, who works with busi­ness lead­ers to make their com­pa­nies more inno­v­a­tive and adapt­able. 

Some firms that have ben­e­fit­ed unex­pect­ed­ly from the pan­dem­ic made unre­al­is­tic assump­tions that the growth they achieved in the depths of the Covid cri­sis in 2020–21 would con­tin­ue, notes Ben Leet, CEO and COO at mar­ket research provider Delin­eate. 

“Many busi­ness­es that built them­selves around the ‘now econ­o­my’ may need to change their oper­at­ing mod­els, espe­cial­ly in the face of a reces­sion,” he warns. 

To ensure that the right changes are being made, COOs must work along­side their C‑suite reg­u­lar­ly to analyse emerg­ing trends, risks and oppor­tu­ni­ties. 

“No one can get every­thing right all of the time,” Leet says. “But, if the mem­bers of an exec­u­tive team can talk, think and plan togeth­er, they will give their com­pa­ny a far bet­ter chance of being ready for the future.”

2. Look to the longer term

COOs must be ready to use their cross-organ­i­sa­tion­al exper­tise to exert more influ­ence on their firm’s strate­gic direc­tion, accord­ing to Hutch­e­son, who says: “One of their biggest chal­lenges is to shift focus from keep­ing the lights on to work­ing as part of the core strat­e­gy team.” 

By com­bin­ing a deep knowl­edge of inter­nal process­es with a high-lev­el per­spec­tive, COOs can enable their firms to har­ness new pro­duc­tion meth­ods and deliv­er more rel­e­vant offer­ings to their tar­get cus­tomers, he adds. 

With­out sus­tain­able oper­a­tions, no busi­ness can be ready for the future. Even as bud­getary pres­sures mount, envi­ron­men­tal con­sid­er­a­tions must remain a pri­or­i­ty for COOs. That’s the view of Jo Henek­er, founder of Sust. Con­sult­ing, which advis­es small and medi­um-sized firms on how to become more sus­tain­able.

The best oper­at­ing chiefs will “begin with an ‘as is’ assess­ment – under­stand­ing where sus­tain­abil­i­ty fits into their oper­a­tions and where it needs to get to. They will set real­is­tic goals to achieve in sev­er­al key areas,” she explains. Equal­ly, they recog­nise that sus­tain­abil­i­ty is becom­ing “increas­ing­ly impor­tant in attract­ing and retain­ing the tal­ent they’ll need”.

3. Maintain harmony in the C‑suite

The process of instill­ing sig­nif­i­cant changes in a busi­ness, espe­cial­ly dur­ing a down­turn, is like­ly to height­en any exist­ing ten­sions among mem­bers of the senior team. At small­er firms, COOs often assume sev­er­al C‑suite respon­si­bil­i­ties. Hav­ing few­er cooks in the kitchen can be ben­e­fi­cial in such sit­u­a­tions. 

Tom Allin is one such COO. The co-founder of Flown, a provider of pro­duc­tiv­i­ty soft­ware, he says that his firm is “rel­a­tive­ly young and small, so I have quite a broad remit, with a focus on finance, busi­ness devel­op­ment and wider growth.”

His coun­ter­parts in larg­er busi­ness­es may have to deal with a wider range of col­leagues with stark­ly dif­fer­ing per­spec­tives. While the mar­ket­ing chief of a big com­pa­ny may be focused on bold explo­ration, for instance, the CFO may be far more inter­est­ed in cost-effi­cien­cy. When such vary­ing agen­das come into con­flict, the oper­a­tional chief may need to take a del­i­cate approach in help­ing the CEO to decide which voice is most worth heed­ing, Hutch­e­son notes. 

“COOs can think of them­selves as pro­duc­ers in a record­ing stu­dio, lis­ten­ing care­ful­ly and decid­ing when to fade down one sound and bring in anoth­er,” he says.

Henek­er says that, when­ev­er the sen­si­tive top­ic of sus­tain­abil­i­ty aris­es, there may be a fierce debate about the right direc­tion to take. In such sit­u­a­tions, COOs “will need to make a pin­cer move­ment. This includes appeal­ing to the human, eth­i­cal side of fel­low C‑suite mem­bers and their long-term finan­cial side too.”

4. ‘Walk the floor’ regularly

Even though 2022’s super­heat­ed recruit­ment mar­ket is start­ing to cool, the fierce com­pe­ti­tion for tal­ent has prompt­ed many HR chiefs to focus on employ­ee sat­is­fac­tion. COOs are unique­ly placed to help them assess the sit­u­a­tion, giv­en that their role entails reg­u­lar­ly meet­ing staff at all lev­els. They can lis­ten to peo­ple and dis­cov­er which fac­tors are keep­ing them at the com­pa­ny and which may be prompt­ing them to look else­where for employ­ment.

In his for­mer job as gen­er­al man­ag­er at YouGov, Leet took his lap­top from the exec­u­tive office and sat among dif­fer­ent teams. He is repli­cat­ing the approach at Delin­eate. 

“The more a COO can stand in the shoes of dif­fer­ent employ­ees, the more chance their busi­ness has of being strong on staff reten­tion,” Leet explains. “Peo­ple are uncer­tain at first about hav­ing the boss around, but they warm to it once they see that they can talk to me about any­thing.” 

Giv­en the rise of hybrid work­ing in the UK, oper­a­tional chiefs may need to be more proac­tive about hold­ing these use­ful face-to-face con­ver­sa­tions because peo­ple are spend­ing less time togeth­er in the office. They may also need to make time to con­duct short video meet­ings with remote work­ers if they’re to gain use­ful insights from a broad range of employ­ees. 

5. Get closer to the customers

Mil­lions of con­sumers and busi­ness­es are keep­ing a clos­er eye on what they’re buy­ing and how much they’re spend­ing on it. Faced with this wide­spread belt-tight­en­ing exer­cise, COOs need to review all the mod­els under­pin­ning the prod­ucts, ser­vices and cus­tomer expe­ri­ences offered by their firms.

For Allin, the key here is to seek close inter­ac­tions with Flown’s client base. He explains: “With the macro­eco­nom­ic sit­u­a­tion sig­nif­i­cant­ly affect­ing con­sumers’ dis­pos­able income and dis­cre­tionary spend­ing, we must main­tain a high-qual­i­ty cus­tomer expe­ri­ence.” Doing so entails retain­ing “an effec­tive two-way dia­logue with users” and adapt­ing quick­ly to both their respons­es and broad­er trends in the mar­ket.

Leet pre­dicts that COOs will focus increas­ing­ly on infor­ma­tion that’s nor­mal­ly the pre­serve of mar­ket­ing chiefs devis­ing cam­paigns: brand-strength insights. His com­pa­ny tracks con­sumer sen­ti­ment using sur­veys and data on online search­es and social media usage. It can then feed this infor­ma­tion direct­ly into busi­ness­es’ deci­sion-mak­ing sys­tems. 

A smart oper­at­ing chief can use such mate­r­i­al to under­stand con­sumers’ chang­ing expec­ta­tions and “make the right choic­es for the short, medi­um and long term” regard­ing their firm’s posi­tion in its mar­kets, Leet says.

Giv­en their high­ly con­nect­ed posi­tion, for­ward-think­ing COOs will devour this and oth­er infor­ma­tion, apply­ing it relent­less­ly to their work in plan­ning and chang­ing process­es. It will enable them to play a lead­ing role in their organ­i­sa­tions’ prepa­ra­tion for, and adap­ta­tion to, what­ev­er chal­lenges await in 2023 and beyond.

Any COO scanning the economic forecasts for the UK at the end of last year could have been forgiven for wanting to batten down the hatches in 2023. The prospect of a lengthy bout with stagflation doesn’t exactly encourage business leaders to make bold expansion plans.

But the smartest operating chiefs are approaching this year with cautious optimism. They have formed layered strategies that will not only prepare their firms for a downturn but also support growth in carefully chosen areas. They’ve recognised that, if they can act promptly, uniting all departments in pursuit of targeted changes, they’re likely to secure a lasting competitive edge for their companies. In pursuit of such an advantage, they’re tending to focus on five key tasks this year.

1. Analyse impending macro changes