Reporting to the CEO, the Chief Operating Officer (COO) is an executive position that looks after the daily business operations within an organization. They are usually considered to be the second-in-command in a business, and their position is sometimes called the Chief Operations Officer or Director of Operations. Here we’ll look at the roles and responsibilities of this position and the relationship between the COO and other top executives.

Chief Operation Officer

The Chief Operating Officer sits within the organization’s team of executives. They are responsible for the operation and administration of a business. Almost any company today will have a COO, whether they are a regular business, government organization, or non-profit organization. The COO is the second leadership position within an organization and will report directly to the CEO. They are sometimes considered to be the heir to the CEO or would step up into this position during a time of illness. The COO should provide the organization with the leadership and vision it needs to ensure the people within the business are working to the highest standards. They’ll make sure the administrative procedures and operations are up to scratch and work to grow the business while ensuring it is financially stable.

The Duties and Responsibilities of the COO

As with any executive position, the duties that a COO performs will vary from company to company. However, there are certain expectations for this position across any organization, including:

  • Working to execute the strategies that were defined by the management team
  • Guiding a new CEO in their position
  • Leading the implementation of a new strategy
  • Working alongside the CEO to offer them support and guidance where needed about the operations of the organization
  • Ensuring the management team within the organization is strong at all times and promoting individuals who are integral to the company’s success
  • In some organizations, they may also work on marketing, sales, and production activities

The activities that a COO completes on a daily basis will be based upon the size of the company and the company’s needs. When working for a huge corporation, they are likely to act as just a senior managerial position, whereas other COOs will be involved in the daily activities in various departments in the business. COOs may be internally or externally focused, depending on the company’s expectations.

Why is a COO Important for a Business?

With a CEO in place, you may be wondering why the COO position is so important for a company. When launching a business, you may be questioning when the right time to fill this position is. The time to add this position will vary between companies, and many large businesses opt to hire into this position immediately upon the launch of the company. On the other hand, small businesses may never feel the need to add a COO, and instead, the CEO will complete the roles and responsibilities usually associated with this position.

If your CEO is no longer able to manage their team alone or is spending too much time on daily operations, these are clear signs that you need a COO to support them. An overwhelmed COO isn’t going to be able to work to the standards that are expected by the Board of Directors, which can quickly lead to issues further down the organization.

For many CEOs, they find running a company alone to be quite a lonely and daunting experience. With no one else to share their concerns or ideas with, a COO offers them a sounding board to overcome troubles they may be facing. They act as a partner to the CEO, who works with them to guide the organization through periods of change or difficulty. On top of that, it can minimize the number of people who are trying to directly interact with your CEO and offers another position they can turn to with concerns. When a company is expanding or starting a new initiative, this is a great time to bring in a COO for additional support and backup for the CEO. Companies may also hire a COO when they believe the CEO is heading towards retirement or planning to leave, as they can act as the heir to the role.

The COO and CEO Relationship

In many of the world’s top companies today, it’s often considered that the COO will take over the CEO role upon their departure from the company. For example, in 2011, Tim Cook became the CEO of Apple, having worked in the COO role previously. The same occurred with Steve Ballmer of Microsoft, who was named CEO in 2000. Their relationship with the CEO can make or break the success of any COO in a business. The two positions must work together with trust and respect and show each other the support that’s needed. When the two positions have a poor relationship, this often leads to issues lower down in the company. For this reason, smaller companies sometimes avoid hiring a COO early on in the company’s life, as it can cause a conflict of interest and tension within the organization.

Skills That are Required for COOs

A good COO will possess a wide range of soft skills. They will also likely be highly educated and experienced in the industry they are entering into, providing the industry knowledge required to oversee the business’s daily operations. These are the other competencies a COO should possess to carry out this role effectively:

  • Strong leadership skills to manage a large team of managers or employees
  • The COO must be a strategic thinker, and be open to taking on board other people’s feedback and ideas
  • A good financial understanding, as they will work closely with the budget and CFO
  • The COO will need to prove they are results-driven and have worked for large organizations before to turn around their results
  • Good delegation is required to carry out this position effectively, especially in larger organizations
  • COOs will need to be able to efficiently make decisions and weigh up the pros and cons of various situations
  • Finally, a COO will need to have excellent communication skills to drive the business forward. They must be able to minimize conflict and resolve issues immediately when they arise.

While it’s believed that some companies are reducing their needs for a COO due to technological advancements, the COO will almost certainly exist in large corporations for many years to come. For individuals who are aspiring to be a CEO in the future, this can act as an excellent training position that sets them up for this progression within the company. With all of the above attributes in place, a COO can help to guide the daily activities of a business and ensure its success for many years to come.