Top 3 Area Of Focus For New COOs
As a new COO, it can be tempting to launch headfirst into the role, making drastic organizational changes within weeks of coming on board. But an experienced Chief Operating Officer knows that when starting out, there are a few things that need to be a priority first.
So, what are the top 3 areas of focus for a new COO?
In today’s blog, we’re talking about the top three areas of focus for a new COO.
1. ORGANIZATIONAL ASSESSMENT
As Chief Operating Officer, you’re expected to know how the business runs from end to end. Operations is, by definition, the process in which your product or service is marketed, created, sold and then distributed to customers – so you need to be across it all.
As a COO being hired externally, this can be extremely daunting. It takes people years to master their craft and you’re expected to at least have a grasp of how everyone fits into the business. Even if you’ve been promoted internally, there’s pockets of the organization you probably never even knew existed.
For this reason, your first priority as COO, regardless of how you got the position is to do a top-down assessment of the organization. This may seem counter-intuitive, after all, you’ve been brought on to drive operational change and the CEO is going to want to see results, fast.
An inexperienced COO will typically jump right in and start making changes to things without fully understanding what really is happening in the organization. While some quick wins can look good in the monthly manager’s meeting, without a deep understanding of how the business works, you could be doing some damage that won’t become obvious for months down the track.
Instead, the COO should first take the time to fully scope every arm of the business and everyone’s role in moving the company forward. But it’s not just about being taken on a grand tour of the office and shaking the hands of a few department heads. A holistic organizational assessment goes way deeper.
In your first 30 days as COO, your organizational review should include:
- COMPANY CULTURE
Understand and document the organization’s mission, purpose, values, vision and goals. Are these same values held by the employees of the company? Do these values drive product development or do they apply to customer interactions only?
Are policies, procedures and training manuals available and constantly updated? Can staff easily access information regarding their role? Just remember, documentation also applies to you as well. You’ll need to review information management as well as document retention.
- ORGANIZATIONAL STRUCTURE
You’ll need a clear understanding of the organizational structure, specifically single points of failure and business silos. Thins includes mapping out the business’ operating model, operational flow and value chain and finding areas of inefficiency.
Meet with key operational heads. This includes managers, team leaders and the people in your organization that are the experts in their role. Take note of any gaps in the leadership as well as their aptitude for emotional intelligence, especially self-awareness and self-management. Respect the people in these positions but also take note of their effectiveness in their roles as well as how much they emulate the company culture and values.
One of the best indicators of company culture is the staff turnover rate. People cycle through companies with toxic management and a negative work environment. Review attrition rates and any staff feedback reports. Also compile data on staff numbers, diversity statistics, salaries, employee engagement and organizational commitment.
Treat your first month as a giant stocktake. Take inventory of absolutely everything including physical tools, equipment, supplies and technology. Real estate should also be inventoried. This means mapping out any headquarters, offices, manufacturing plants and facilities - both domestically and abroad.
You’ll need a high-level overview of all revenue, the cost of materials, staffing and logistics. The finance department reports to you, so you need to be across how much everything costs and where the business’ money is moving. What is the company’s risk tolerance and is it properly tuned?
There’s more to the job than just making the CEO happy. There are always other people invested in your company, some financial, some as part of a partnership. But keeping the various stakeholders happy is core to any successful business. As COO, you’ll need to find out who the key stakeholders and what their level of involvement is with the business.
- KEY PERFORMANCE INDICATORS
How does the business measure success? What data is available and how is it aggregated? Are there any metrics that should be collected but currently aren’t? Is the business tracking irrelevant data?
- THE FUTURE
Is the business committed to research and development? How much time and resources are dedicated to refining or developing new products? Is there a robust project management process integrated into R&D?
It’s a lot to get through, especially within your first month as COO, but it’s absolutely crucial to cover as much as you can in as much granular detail as possible.
2. DEVELOP STRATEGY
Once the COO has good understanding of the business, the next stage should be devoted to developing an executable strategic plan.
Too often, strategies are designed by leaders in an executive meeting room, miles away from the production floor and aren’t really reflective of what’s actually happening in the business. They’re often quickly hatched to address the vision of the CEO, without much thought to process and practicality.
As COO, you need to drive actionable change that not only makes the CEO’s dream a reality, but do it in a way that promotes profitability. This all starts with a carefully considered strategy.
When it comes to developing this strategy, you should ensure that all stakeholders (leaders, employees, customers, suppliers and partners) are fully engaged and consulted before making any final decisions. Not only does this give you valuable insight into various business workflows, but when everyone is involved, they’re way more likely to support you when it comes time to implement.
A good strategic plan should look like any well-thought-out plan including a purpose, values, vision, goals, objectives, initiatives, actions and expected timelines.
The final thing a new COO need to focus on is the implementation the strategic plan you’ve been so busy developing. But the implementations phase is a lot more complex that just “making it happen”. A great implementation must follow a process, it must have accountability and rigor and it must be measured. There must be checks and balances and a constant eye on things as changes occur. Contingency plans and rollback strategies also come into play in this phase.
It’s also important to continue to engage and involve all stakeholders in the implementation of the strategy. As much as possible, make everyone a part of the entire change effort. This deepens the ownership of strategic success.
You should also ensure that performance data is tracked and regularly reported throughout the various phases of implementation. This way you can tweak sections of your plan to react to changing situations.
Your role, as COO, is to grow, scale and improve a business. Too often, COOs come in as glorified managers with lots of perks, high pay and enormous bonuses. Remember that a true COO is the most important catalyst for change in an entire company.
If you are looking to identify areas of operations to work on, the right advice is priceless. As business consultants and COO, we work with entrepreneurs every day to set them up for success by identifying where their business is suffering. We help them pinpoint which processes to re-evaluate and adjust to grow their business. And best yet… We offer hassle-free, no obligation 30-minute discovery calls to see how we could help you. Just contact us today.
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