The role and types of COOs in modern life

Imagine a world where stability is a myth. Where new technologies emerge every day, and market conditions change in a matter of hours. Where competition is fierce, and customer expectations continually rise. However, this is not fantasy but the reality that modern leaders, particularly Chief Operating Officers (COOs), face.

Some people believe that the Chief Operating Officer is the second most important person after the CEO, and they would not be mistaken. After all, the COO is responsible for the company's day-to-day operational activities, ensuring the efficiency and productivity of all internal processes, while strengthening organizational resilience and unlocking the potential of employees. Yet, this role enjoys a different popularity than the role of the CEO. You can name dozens of well-known CEOs, but not as many COOs.

Indeed, often the CEO combines this role, leading to a range of problems:

• Spending too much time on internal operations affects the business's external representation and networking.
• Managers and employees feel overwhelmed.
• The leadership team feels a lack of support.
• The company cannot grow and scale significantly.

The COOs themselves often take on these challenges.

As of 2022, 40% of leading companies have a Chief Operating Officer, with the financial and energy sectors leading at 48%. It is worth noting that there are industries where the role of COO is most in demand: healthcare, finance, and technology. Conversely, only 1% of startups in the US hire a COO.

According to McKinsey data, in 2021, nearly 27% of CEOs in Fortune 500 and S&P 500 companies were promoted from the position of Chief Operating Officer— more than from any other internal position.

The Chief Operating Officer is typically involved in the organization's daily processes, collaborating with leaders from other departments. Often, the COO serves as a focal point that integrates functional areas such as finance, human resources, engineering, and more. The COO has ideal opportunities to identify new efficiencies and innovations.

Undoubtedly, the role of the Chief Operating Officer can vary depending on the company's needs and the skills, experience, and personal qualities of the individual.

However, there are generally two types of COOs distinguished:

1. The executor?

The executor is a modern type of COO that most people envision when thinking of this position. Their primary role is to help optimize the CEO's responsibilities, reducing their workload and overseeing the company's internal operations. Those aspiring to be an Executive COO should have substantial managerial experience and the ability to closely collaborate with senior leadership.

Strong points for this type include deep industry experience and attention to detail.

2. The change agent?

When a company experiences stagnation or a decline in market performance, a change agent steps in to help. This type of COO functions as a fixer.

Strong points for this type include a combination of analytical thinking and great imagination. This type of COO requires balanced left and right brain thinking, as their goal is to rethink the company and enhance external interest and internal employee engagement.

This type also exempts the requirement for deep industry knowledge. Under certain circumstances, a change agent may be a COO from a different sector. The idea is that an operations director from another sector can bring in a unique set of skills and diverse experiences that can help redefine a company's operations.

In many cases, these managers, although from a different industry, usually have some connection to the company that requires a change agent.

3. The mentor

A Mentor is a type of Chief Operating Officer that can be specially hired, or an existing Chief Operating Officer can take on this role. Mentors are chosen when the CEO is new and just transitioning into the new role. For example, this type of COO is often hired when the CEO is an inventor/founder of a product or service but lacks significant business experience.

The ideal Mentor COO is someone with years of experience in a particular industry. For example, imagine a new CEO who is the inventor of a new automobile product. The perfect COO Mentor should have deep knowledge in the automotive industry as well as managerial experience.

The mentor's primary responsibilities would include aiding the CEO in creating a business plan and shaping the company's future vision. The Mentor is also responsible for developing and implementing the operational strategy. The distinction of this position from other types of COOs is that the mentor must also teach the CEO how and why the operational strategy works.

4. The partner or "other half"

The "Other Half" is precisely what it sounds like. This modern type of Chief Operating Officer is chosen because they are everything the CEO of the company is not. If the CEO has certain strengths, the COO will have a completely different set of competencies, or vice versa. The COO will be grounded and logical if the CEO tends to make hasty decisions, is unpredictable, and acts impulsively.

Truth be told, this is one of the most powerful and effective CEO/COO pairs, provided they can collaborate.

The ability to step into the CEO's shoes is crucial in this role, making natural empathy and openness essential. If one of the leaders lacks these qualities, partnering with the other half can be disastrous.

The "Other Half" of the Chief Operating Officer must have a broad education and work experience since they will be expected to share all internal and external responsibilities with the CEO. Instead of being two separate positions, the lines of responsibility are often blurred in this type of CEO/COO pair.

5. The successor

A Successor is often hired or identified several years before the retirement of the CEO. They may also be hired a few months before the CEO plans to retire or hand over the company for any reason. In such situations, the COO is hired/identified for the position of the next CEO.

What should a strong successor have?

A successor should possess experience and skills that are more suitable for a general director than an operational director, such as:

?? Ability to articulate complex ideas in simple terms.

?? Ability and willingness to regularly communicate with the press and external parties.

??Capacity to work in a multi-tasking environment and switch between different levels of tasks as needed, remaining resourceful and emotionally resilient

What are the key skills required of an effective COO today?

1. Leadership
2. Communication
3. Critical thinking
4. Problem-solving
5. Analysis and systematic thinking
6. Interpersonal skills
7. Emotional intelligence

How to be a valuable COO?

?Continuously learn and invest in your personal development.

?Develop competencies and adaptability in your management style.

?Develop relevant soft skills.

?Set ambitious but realistic goals for expanding your company and improving its activities in your current position.

Additionally, what should a COO focus on in 2024:

1. Implement automation in all processes. To determine whether a process can be automated, consider variables such as frequency, predictability, repetition, and data availability. Advocate for automation as a strategy for reducing costs and improving quality and productivity.
2. Apply simplicity, flexibility, and resilience to processes. The COO should continuously evaluate the flexibility of their business processes to be able to adapt quickly to changes. Therefore, processes should be simple and easily maintainable.
3. Utilize advanced technologies (AI) to improve planning, forecasting, and optimizing routine issues that can be delegated to artificial intelligence. Additionally, think about how AI can already help you, your colleagues, and your clients.
4. Invest resources in proactive cybersecurity. Implement a comprehensive approach to risk assessment, compliance with regulatory requirements, and evaluating suppliers of cybersecurity services. This is an important focus in modern realities.
5. And, as always, it is the development of both personal and team skills - non-stop.

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