The chief operating officer: an ill-defined but crucial role

The chief oper­at­ing offi­cer has been described as the back­bone of an organ­i­sa­tion; the glue that con­nects the com­mer­cial strat­e­gy of the busi­ness with deliv­ery and exe­cu­tion. Yet unlike oth­er mem­bers of the C‑suite, there isn’t a sin­gle descrip­tion of what the role entails, nor is there a clear­ly defined route for becom­ing COO. 

Some COOs han­dle every­thing – from HR and finance to mar­ket­ing – while oth­ers focus more on over­see­ing research and devel­op­ment, prod­uct strat­e­gy and sup­ply-chain logis­tics. This appears to make the oppor­tu­ni­ty open to all con­tenders. 

How­ev­er, with the busi­ness world fac­ing unprece­dent­ed chal­lenges, is there one func­tion in par­tic­u­lar from which chief oper­at­ing offi­cers are now more like­ly to emerge?

In recent years, the COO role has evolved from a pre­dom­i­nant­ly oper­a­tional focus to more of a deputy chief exec­u­tive role, with a man­date for han­dling all the tra­di­tion­al oper­a­tional respon­si­bil­i­ties while lead­ing a company’s most impor­tant strate­gic ini­tia­tives.

Accord­ing to organ­i­sa­tion­al psy­chol­o­gist Dr Lyn­da Folan, author of Leader Resilience: The New Fron­tier of Lead­er­ship, while this may look like a log­i­cal evo­lu­tion, for many busi­ness­es, it is not nec­es­sar­i­ly an effec­tive struc­tur­al deci­sion. She says: “The lack of def­i­n­i­tion of what this broad­er role requires, and the dis­tinct lack of fore­thought on the suc­ces­sion for these roles, is a busi­ness risk – even more so in the volatile busi­ness set­ting of today, where fail­ure is not an option.”

Many of today’s COOs have come from the rev­enue-dri­ving com­mer­cial side of the organ­i­sa­tion – the front end of the busi­ness – because that’s what dri­ves the prof­its for many com­pa­nies. But there are usu­al­ly a lot of strings to a COO’s bow. 

“They might have come up the com­mer­cial route but have also spent time in sales oper­a­tions, cus­tomer suc­cess or pro­fes­sion­al ser­vices deliv­ery,” says Mike Drew, head of the tech­nol­o­gy prac­tice at exec­u­tive search firm Odgers Berndt­son. 

“His­tor­i­cal­ly, COOs have come from a ser­vices and cus­tomer suc­cess angle but we’re just as like­ly to see a COO come up via the front-end sales route as the back-end deliv­ery route. Either way, they need to be able to meet in the mid­dle and act as the con­duit between the back end and the com­mer­cial front end.” 

Broader skill set

Regard­less of the busi­ness func­tion they come from, a poten­tial COO needs to have per­spec­tives on strat­e­gy, cus­tomer suc­cess, oper­a­tional mechan­ics and ser­vice deliv­ery, as well as com­mer­cial acu­men. The most suit­able COO can­di­dates are there­fore like­ly to be those with well-round­ed back­grounds rather than nar­row or spe­cial­ist dis­ci­plines. 

“A mar­ket­ing, HR or IT pro­fes­sion­al is unlike­ly to become a COO,” says Rachel Davis, co-man­ag­ing direc­tor of tal­ent insights firm Arm­strong Craven. “A finance direc­tor who has led mul­ti­ple func­tions – for exam­ple, pro­cure­ment and IT, which often come under the umbrel­la of finance – or a sales leader with inti­mate knowl­edge of cus­tomers, mar­kets, pric­ing, and there­fore mar­gins, would make a bet­ter can­di­date.”

One of the ways the ide­al COO can­di­date require­ments have changed in the past two or three years of eco­nom­ic dis­rup­tion relates to their lead­er­ship attrib­ut­es. “A high emo­tion­al quo­tient and the abil­i­ty to man­age change quick­ly – with strong com­mu­ni­ca­tion to bring the whole busi­ness along – are crit­i­cal and these aspects have def­i­nite­ly come to the fore over the past two to three years,” says Davis. “Com­mand-and-con­trol styles are no longer deliv­er­ing.”

A suc­cess­ful COO under­stands the impor­tance of the strate­gic part­ner­ship between their role and that of the chief exec­u­tive. Natalia Shu­li­ak joined data ana­lyt­ics plat­form Dou­ble­Cloud as COO ear­li­er this year. She says: “You can’t be excel­lent at devel­op­ment, prod­uct and the com­mer­cial side of the busi­ness. At best, you can be great at two of those things.” 

The stronger the part­ner­ship of the COO and CEO, the greater the chances of them “build­ing some­thing sol­id”, she says, which is why the COO’s role is “nev­er defined”. 

“For exam­ple, I’m strong in go-to-mar­ket and build­ing a pre­dictable machine, which is what I’ve done in the past in dif­fer­ent roles, includ­ing mar­ket­ing, busi­ness devel­op­ment, sales, and oper­a­tions,” she explains. “As COO, I part­ner best with those who are great in devel­op­ment and prod­uct.”

Oth­ers insist that the finan­cial, eco­nom­ic and oper­a­tional chal­lenges fac­ing busi­ness­es today have cre­at­ed more oppor­tu­ni­ties to progress to COO from across all areas of an organ­i­sa­tion. Katie Lee, for­mer UK chief growth offi­cer at glob­al media agency Wave­mak­er, recent­ly became the company’s COO. She sees the role as one that can adapt to the spe­cif­ic growth needs of the busi­ness and, as such, is open to can­di­dates from any part of the busi­ness and from a vari­ety of roles.

Preparing the next generation of COOs

Nev­er­the­less, Folan insists that the recruit­ment of the COO should not be a default appoint­ment from with­in the func­tion­al area of an organisation’s oper­a­tions. With the breadth of the require­ments of the evolv­ing COO role, she thinks it unlike­ly that an exec­u­tive with a tra­di­tion­al tra­jec­to­ry through oper­a­tions would be an ide­al can­di­date.

Lead­ing at exec­u­tive lev­el, with such a range of func­tions nec­es­sary, “requires staff devel­op­ment with a strate­gic focus”, she says, adding that com­pa­nies will run into dif­fi­cul­ties if this aspect is ignored. 

“The appoint­ment will be prob­lem­at­ic unless the organ­i­sa­tion sys­tem­at­i­cal­ly pre­pares those iden­ti­fied as hav­ing poten­tial for the COO role.”  

And with­out a sig­nif­i­cant lev­el of invest­ment in that per­son­’s devel­op­ment before their appoint­ment, she says, “they will like­ly face chal­lenges in deliv­er­ing the breadth of respon­si­bil­i­ty”. 

From COO to CEO

In most com­pa­nies, the chief oper­at­ing offi­cer is sec­ond in com­mand. If the chief exec­u­tive is absent, it’s usu­al­ly the COO who steps up, mak­ing them an obvi­ous can­di­date for the top job. It is also a well-trod­den path. ASOS recent­ly pro­mot­ed its COO, José Anto­nio Ramos Cala­m­onte, to chief exec­u­tive, while ear­li­er this year, for­mer Sales­force COO Bret Tay­lor moved into a co-chief exec­u­tive role.

While the past few years have seen oth­er func­tion lead­ers make the tran­si­tion to CEO – with the chief finance offi­cer and chief human resources offi­cer being pop­u­lar can­di­dates for the top job – the strat­e­gy-focused nature of the COO role makes it a nat­ur­al path­way to becom­ing chief exec­u­tive. But what real­ly counts for any con­tender is the abil­i­ty to flex mul­ti­ple mus­cles out­side their spe­cial­ism.

“The CFO usu­al­ly has a strong rela­tion­ship with the CEO but, if they’re too focused on just the num­bers or cost con­trol of the busi­ness, they are unlike­ly to make a good CEO them­selves,” says Drew. “Because the COO has such broad expo­sure, they’re less like­ly to fall into the trap of only being focused on one area.”   

Carl Umin­s­ki was co-founder and chief oper­at­ing offi­cer of dig­i­tal prod­uct agency Somo until the start of this year, when he became its chief exec­u­tive. “The CEO sets the strat­e­gy, man­ages investors and is account­able for the direc­tion of the busi­ness, but it’s the COO who gets it there,” he says. 

A chief oper­at­ing offi­cer nat­u­ral­ly makes a good CEO because they know how the com­pa­ny oper­ates, and its strengths and weak­ness­es, he says. “How­ev­er, the role imme­di­ate­ly is less oper­a­tional, less fire­fight­ing, less ‘doing’ and more strate­gic, which does­n’t suit all per­son­al­i­ties.”