A COO is not simply a potential CEO successor in waiting; he or she needs a specific set of characteristics and skills to perform the job and, more importantly, to mesh with those of the CEO and other senior functional leaders. The results of this synergy are significant: An effective COO creates and influences the discipline for everything within an organization’s infrastructure to smoothly scale up or down, allowing the CEO to devote his or her bandwidth to addressing complex strategy for growth and managing external contingencies.
Although the functions of a COO can vary widely from one organization to the next, in nearly every situation a COO embodies several important characteristics:
Uses influence instead of positional power: A COO must be able to collaborate and affect a range of personalities and job types, moving easily from connecting with backoffice employees to the Board of Directors.
Views strategy as inseparable from operations: A COO sees all operational tasks from the lens of strategy, ensuring that every effort expended organizationally supports the strategy of the organization.
Coaches and mentors: A COO should model and promote development through coaching at all levels, and also encourage all levels of employees to act within the mission of the organization to make independent decisions that support and enhance the relationship with the customer. That’s where the rubber meets the road — where the customers are. At the end of the day, the relationship with the customer drives shareholder value.
Is results-oriented: A COO needs to be able to assess issues and solve problems in a fact-based way, using key metrics that drive the business.
Consciously shapes culture: A COO uses consistent leadership and a deep appreciation for developing followership to shape the culture of the organization.
In addition to evaluating these characteristics, a CEO also should choose a COO whom he or she sincerely respects as a person, and commit to developing an effective working relationship based on a foundation of trust. In time, that trust should also extend from the employees to the COO.
At the onset, a CEO should provide clarity to the COO on how their roles differ. The COO should clearly understand the CEO’s expectations around duties and responsibilities. Differences of opinion between the CEO and COO should be expected and encouraged. Communication between the two should be often and thorough, so that the CEO avoids sending mixed messages and second-guessing. And beware: The CEO shouldn’t consider or label the COO “a good operator,” because that creates, in effect, a psychological ceiling that might lead the organization, Board of Directors and COO to be perceived as broad-based enough to operate outside the boundaries of operations.
Coming equipped with and continuing to develop a broad set of experiential competencies is critical in reacting nimbly in this economy. Cross-functional experience in field sales, supply chain, human resources, real estate and construction are all important, as is augmenting these with functional experience in marketing, finance, legal and IT. These are crucial areas of preparation for CEO-succession candidates.
The CEO should be proactive in the COO’s development to the CEO level, and in that vein can also consider:
When the COO demonstrates readiness, expanding the COO’s functional areas by elevating him/her to president, which allows for broadened business exposure and growth of general management acumen.
Increasing exposure of the COO to the Board of Directors at Board and Committee meetings and informally through Board-mentoring initiatives.
Including the COO in analyst calls and street-related activity.
Recommending that the COO serve on Boards of other companies to gain new skills and experiences.
Finally, the Board of Directors should take note: A strong COO will not solve the problem of a weak founder or CEO. Enough said…