By Stefano Maifreni, below, CEO and Founder, Eggcelerate
The Chief Operating Officer (COO) is an executive team member responsible for managing a company’s people, culture, and processes. They are number two at a company, reporting to the CEO, and are virtually like a CEO’s right-hand person. As second-in-command, they serve as the CEO’s counterweight, helping execute the strategy. They ensure that the day-to-day operations are running smoothly and profitably (e.g., supply chain, HR, tech services, maintenance, bookkeeping, sales, marketing) so that executives can concentrate on growing and expanding the business.
Why is the role of the COO important?
The success of a business depends on the execution of the strategies. The COO leads a business’s operations, ensuring departments, teams, and individuals are trained, equipped, and ready for action. The COO is responsible for driving alignment and standardisation throughout the organisation, ensuring consistency and reliability in processes and policies. COOs also help companies react to changes in the marketplace rapidly by creating a culture of innovation, encouraging experimentation, and giving employees opportunities to develop ideas for solving problems and improving processes. A COO can:
- set the strategy and guide the way
- make sure that you hit milestones, grow the right segments, and invest in the right areas
- help you fight fires and build a more predictable business
- create a culture that fosters growth and recognises strengths
- help you reclaim your life, leaving the company running without you
As organisations try to grow, they will run into obstacles along the way. In some cases, these roadblocks will be external: A competitor might come out with a new product or service that is better than yours, or an unexpected dip in the economy might threaten growth. In others, the roadblocks will be internal: employees might be unable to cope with a transition to a new product or service or an expected jump in growth.
The role of the COO
All roles in the C-suite are essential, but some are more critical than others. CEOs have enormous responsibilities every day, leaving little time for operations management. CEOs need to be strategic and forward-thinking; they oversee setting the strategy and vision for the company. It means that they need to think about the big picture. They represent the company to investors, customers, and all stakeholders.
To help organisations grow, COOs should determine their weaknesses and strengths and identify the best ways to solve the company’s problems while capitalising on its strengths.
One of the COO’s prominent roles is risk management. However, with an organisation’s growth, risk increases. That is why COOs should be proactive in managing their operational risks and finding ways to mitigate risks associated with daily operations. They must also put in place risk-management strategies and build emergency plans in case things do not work out.
A company’s culture is the key driver of its success. Unfortunately, cultures can be inconsistent, changing over time, and challenging to maintain. Cultures are deeply embedded within organisations, they take time to establish and develop, and some top-down directives cannot manage them. That is why COOs need to be proactive about managing their organisation’s culture, living it, and enforcing values and expectations. They may even want to develop rewards systems and performance reviews that reinforce the cultures they are trying to build.
The COO plays an integral role in helping the CEO get their work done, contributing to the bigger picture and strategy, and releasing time for the CEO to concentrate on their parts while ensuring the business is running smoothly. The COO’s role has developed, becoming more strategic and less operational.
They need to define where the business will be going forward and how they will get there. They must determine what the company does well and where there is room for improvement and identify how to use its resources at best.
In other words, COOs empower CEOs to make the strategy come true through their culture and everyday operations. The COO role has certainly evolved over the years, while once only responsible for the day-to-day operations, they are now much more strategic. The most crucial advantage to hiring a COO for your small business is that they allow you to bring more of your strengths to the table. A COO can help identify processes to ensure that your team and company are running without interruption.
The best hire
When it comes to time management, hiring a skilled COO that can step into a company’s management and assume all the tasks involved, is the most efficient approach. You might hire a COO, full-time or fractional, or promote someone from within.
The advantages of promoting someone are clear: someone who has been around a long time, knows the company, knows the product, and, above all, knows the people. However, the disadvantage might be, that this could create blind spots that might prevent the newly appointed COO from driving the needed changes within the organisation.
Experienced COOs certainly have a contribution to make to the company, given established industry processes. The potential flip sides revolve around the ability to innovate and challenge the most common industry assumptions.
A part-time COO could be an option if you want to test the waters and/or can’t afford a full-time hire. They can work within and on your company, moving from analysis, strategy, and planning to execution, and continuously improving performance and growing your revenues.
A fractional COO typically has extensive hands-on experience with most, if not all, aspects of the business: sales, marketing, product development, finance, technology, HR, and customer service – and can bring the experience gained in multiple organisations to benefit your growing business.
The COO drives consistency and standardisation throughout your organisation so departments, teams, and individuals are trained and equipped to perform. They also play a critical role in helping companies react to changing market conditions and emerging technologies. COOs can foster cultures of innovation, encouraging experimentation and giving employees the power to develop ideas for solving problems and improving processes. COOs can help to build a culture in which people can thrive.