The role of a COO is one that’s often misunderstood. Some organizations can’t run without a COO and yet certain organizations have no business whatsoever hiring a COO. Understanding the role of a COO in one’s organization is vital for the success of a business. But this can be a bit difficult as there are no constants when it comes to this auspicious position.
Almost anyone with the right chops can succeed as a COO; individuals from any background can step into the role without any problems. And it is this variability and inconsistency in the job title that makes it hard to understand. It is also what makes it difficult to compare and contrast one COO from the next.
It’s hard to determine whether a COO that has worked successfully in one company can replicate the same level of success in another. The skillset for a good COO is neither generic or portable. Even within an organization, the qualifications for the COO role can shift- an individual that made a great COO at launch may not necessarily be well suited for the title as the company scales. Moreover, the same business may at times be able to operate with a COO and sometimes efficiently without one.
Additionally, there is no consensus as to what the role of COO entails. But in general, you are likely to come across 7 kinds of COOs namely:
This is the COO responsible for the execution of strategies that have been created by top management. The executor is responsible for delivering results on a consistent quarter to quarter basis.
The change agent
Some companies need a COO to be in charge of a particular strategic imperatives such as ensuring a planned turnaround goes as planned or that rapid expansion takes off without a hitch.
Some organizations bring in the assistance of a more experienced COO to mentor a younger founder or CEO.
The CEO’s better half
Some businesses bring in a COO to complement the duties of the CEO. In such situations, the COO isn’t usually meant to emerge as a leader but often does. In such an instance, it can be hard to determine who has more power, the CEO, or the COO.
Sometimes, the CEO is the type of individual that works best with a collaborative partner. when this occurs, it is sometimes referred to as the 2 in a box model. As co-leaders, the CEO and COO lead the business in unison sometimes even choosing to share an office for more effectiveness.
The heir apparent
In numerous cases, the COO position is created to groom a CEO to be. Plenty of organizations create a COO job title so that the heir can learn before finally taking the reins.
The Most Valuable Player
Last but not least, a lot of businesses create the role of COO as a promotion to an executive that has put in the work. The COO position is also usually created to accommodate an executive that’s considered too valuable to lose, especially to a competing business.
Reasons why your organization needs or doesn’t need a COO
Conventionally, titles such as Chief Operating Officer were primarily available in the realm of a huge corporation. Larger than life businesses such as Fortune 500 businesses or international corporations have always understood that a COO is essential and has always been a component of C-suite functions.
The role of a COO, as mentioned above, has always been second in command to the CEO. It is the COO that the overall business operations are taking place sans hitches. The COO is also responsible for ensuring that the corporate vision and strategy put in place by the CEO melds with the company board’s mission.
But what about a small-medium enterprise? It can be extremely difficult for a smaller organization to create the role of a COO. Creating such a role can overwhelm a company especially if they are not suited or prepared for the position. Even though many small businesses may not be able to afford the expected salary of a CEO let alone a COO, the good news is that hiring a consultant is always a good option.
A consulting COO can help a small business with COO duties and it only needs to reserve several thousand dollars a year for the role versus the month to month hefty salaries. Having a consulting COO will provide a small business with long term value without the struggle of long term salaries and benefits associated with employing one permanently.
To hire a COO or not to hire a COO
The initial choice to create the role of a COO will depend largely on where the business is in its evolution, as well as the growth path that your business has taken or is going to take in the future. In some instances, a small business might fair off better with a VP of operations in place of a full-blown COO.
There are important issues that a small business might want to highlight when considering establishing a COO role in the organizational structure. For example, the workload that the COO would have to handle is something that has to be seriously well-thought-out beforehand. Has your business scaled so much that it currently needs a COO to deal with external promotions and managing shareholder relations?
If that’s the case, then you would definitely need a COO to handle all the day-to-day components of operations. Perhaps your business has grown considerably over the last few months and is now thinking about going public. In such an instance, a COO can step up to supply your organization with enhanced operations discipline in the run-up to your public stock listing or IPO.