Not all firms require a COO; however, those that do often benefit from the specific skill set that a COO brings to a company, such as strong analytical, organizational, and communication skills. In some corporations, the COO is known by other terms, such as „executive vice president of operations,“ „chief operations officer,“ or „operations director.“ In addition to having a strong and trusting relationship with the CEO, the COO should also have an effective relationship with the board. A good relationship between COO and the board allows the board to better understand and independently judge a potential successor. A strong relationship between the board and the COO also offers the board an additional expert opinion on the health of the company, and status of key initiatives.
- Mentor COOs are most often experienced executives brought in to young and rapidly growing companies such as startups.
- The COO is responsible for the daily operation of the company and its office building and routinely reports to the highest-ranking executive—usually the chief executive officer .
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- Others take years or decades to become a COO by slowly climbing the corporate ladder inside one or several large organizations.
- Heir apparent COOs are brought in to learn from a CEO and become familiar with a company before taking over the top job.
If the COO role is defined primarily in relation to the CEO, and no two CEOs are exactly alike, does that mean the job simply defies definition? What became clear in the course of our research is that the differences among COO roles arise from the different motives behind creating the position in the first place. It turns out there are seven basic reasons why companies decide to hire a COO, and these yield seven roles that COOs can play vis-à-vis their CEOs. Readers will recognize that the seven reasons are not mutually exclusive, though in this initial presentation we treat them as such.
Chief Operations Officer Definition
Ongoing changes have forced some CEOs to hire a second in command to help share the responsibilities, especially with communication. The role of the COO varies from one industry to another and even from one company to another. The one constant is the COO’s close relationship with the CEO, who is often responsible for defining the COO’s role. A controller is an individual who has responsibility for all accounting-related activities within a company including managerial accounting and finance. Corporate culture refers to the beliefs and behaviors that determine how a company’s employees and management interact. The history of Dell Computers is quite famous, with Michael Dell having started the company in his dorm room in 1984.
What are the three types of COO?
- The executor. A COO who takes on an executor role is primarily responsible for implementing the top management team's strategies.
- The change agent.
- The mentor.
- The MVP.
- The CEO foil.
- The partner COO.
- The heir apparent.
- The hybrid COO.
The daily responsibilities of the COO can be different, depending on the operational structure and needs of the company itself, as well as the industry in which it operates. As The Balance and other sources note, there is not a single, standard list of responsibilities when it comes to the COO role. Duties can change according to the goals and requirements of the company. In some businesses, for example, the COO may be more involved with the development of operations strategy and maintaining the company’s financial health.
What Is a Chief Operating Officer?
It benefits the CEO to allow such a relationship to form because it reflects confidence and fosters transparency. It also reinforces that the CEO is capable of developing talent, and helps the CEO to retain the COO by further empowering the individual. A strong relationship benefits the COOs in that they are able to expand their experience as well as their professional network. Additionally, if they are looking to be the next CEO, it allows them to develop credibility with the board.
If you believe you have the work experience and educational background for the position, read COO job descriptions and highlight relevant work experience that can qualify you. Gearing your resume in this way can also reveal other areas in which you may need to broaden your experience before applying for COO jobs. COOs and other chief executives work in every type of business, from small to large, with few employees or thousands of employees. Some of the most well-known chief operating officers include Tim Cook, who served as Apple’s COO before stepping into the CEO role in 2011, and Sheryl Sandberg, the COO of Meta. HBR Learning’s online leadership training helps you hone your skills with courses like Attracting and Cultivating Talent.
Salary of Chief Operating Officer
Mentor COOs are most often experienced executives brought in to young and rapidly growing companies such as startups. Their roles diminish as the CEO and executive team grow in experience and leadership skills. Normally, it holds a good number of years of experience in the business line for which they are hired as the role demands hands-on execution skills, people management, and financial budgeting, to name a few. These are influential, proactive, and strong leaders, and their success in their role depends upon the confidence they enjoy in their CEO and Board of directors and the commitment of their team members. Amy Sanchez, certified career coach at Swim Against the Current, said COOs work closely with CEOs to make important company decisions.
The COO role is a key member of the senior management team, reporting only to the Chief Executive Officer . You’ll have to maintain control of diverse business operations, so we expect you to be an experienced and efficient leader. If you also have excellent people skills, business acumen and exemplary work ethics, we’d like to meet you. Successful COOs are also very goal-oriented, chief operating officer definition and strive to achieve not only the day-to-day objectives that support the company’s daily operations, but the larger goals of the CEO as well. As The Balance pointes out, this goal-orientation should be balanced with needs for results. In other words, the COO should prove and demonstrate to the CEO and other senior executives how their strategy is supported.
This person manages and handles the daily business operations of the company, working closely with department heads and supervisors to support the day-to-day activity of employees. Finally, some companies offer the job of COO as a promotion to an executive considered too valuable to lose, particularly to a competitor. This appears to have been the case at News Corporation’s Fox Entertainment Group subsidiary. It recently announced that its president and COO, Peter Chernin, had signed a new employment agreement preventing a rumored move to rival Disney. Similarly, when McDonald’s restructured the roles of its U.S. and Europe presidents during the summer of 2004, that was interpreted by analysts as an effort to ward off poachers.
The Chief Operating Officer is second in command after the Chief Executive Officer . His or her role is to execute the strategies planned by the management team or board of directors. The CEO may also create strategies for the Chief Operating Officer to implement. Because the COO role can vary according to the internal structure and needs of the organization as well as the work of the CEO and other senior executives, responsibilities are not the same for COOs from company to company. Represents the heir apparent for the CEO and may stand in for the CEO if this senior executive is out of the office or otherwise engaged.
The CEO must feel certain that the COO shares the vision, is not gunning for the top spot, and can get the job done. Conversely, the COO must be sure that the CEO will provide whatever is needed to do the job, will not put any obstacles in the way, and will not thwart future career advancement. Let’s explore this question more fully, framing it in terms of what each party owes the other.
What is difference between COO and CFO?
Both COOs and CFOs need excellent communication and strategic planning skills to be successful at their jobs. However, a CFO focuses primarily on a company's finances while a COO focuses on a company's employees and general operations management.