The COO has all the makings of importance: a three-letter moniker, C-suite status, and a top-paying salary. But exactly what does a COO do and why might a company need one?
One might be surprised to learn that not all C-suites have a COO. The roles within the top level of an organization can vary widely between companies and industries.
Here’s what one needs to know about the role of the COO and what it means for any business.
What Is a COO?
COO stands for Chief Operating Officer. This person oversees the company’s ongoing business operations as determined by the CEO.
The CEO and COO positions are closely related. While the CEO focuses on long-term business goals, he or she depends on the COO to carry out plans in the present to reach those long-term goals.
The COO plays a role similar to that of a Vice President. The CEO’s success is largely dependent on the strength and success of its running mate, the COO.
What Does a COO Do?
The responsibilities of the COO will vary between organizations. But in general, the COO handles day-to-day operational needs.
This could include creating operating policies and strategies, communicating these strategies and policies to employees, and overseeing human resources.
The actual duties will depend on the strengths and weaknesses of the company. For example, companies who are suffering from high turnover will need to focus on improving hiring and talent sourcing.
As the CEO develops intentions and ideas for the company, he or she will rely on the COO to execute them.
If the company is in its early stages, the COO may also serve as a mentor to the CEO.
In some cases, the COO is an inherent choice for CEO should the position become available. Apple’s Tim Cook served as COO before becoming CEO in 2011. Enterprise Holdings’ COO Pamela Nicholson was COO before becoming CEO in 2013.
The two roles work in tandem to guide the company’s overall mission. Yet, only about 36% of Fortune 500 and S&P companies still have COOs, down from 48% in 2000.
Qualifications of a COO
COOs usually have experience within the field in which the company operates. In most cases, the COO has worked their way through the ranks of the company or industry.
In recent news, Jigna Patel is announced as new COO of Smart Circle. Having served in the company for 10 years, she worked her way up to an executive position.
COOs have a balance of business expertise, management experience, and a thorough understanding of policies and practices in their field.
COOs also must have strong leadership skills. It’s a people-oriented position that requires good communication and an ability to connect with others.
Do You Need a COO in Your C-Suite?
Now that you know the answer to “what does a COO do,” do you think a COO would bring value to your organization?
The C-suite isn’t set in stone. Rather, companies must decide for themselves which positions offer the biggest benefits.
However, it’s a general consensus that operational leadership can spur a company’s growth. Exactly how much growth will largely depend on how you maximize this leadership asset.
For more top business insights, head to our Latest Business blog.
