Understanding the COO Role
We've all heard the term "COO agenda," but its meaning is often ambiguous. Many COOs move into the role from related operations positions, making the transition seem less like a change. Before starting in a COO role, it's essential to answer two critical questions: Why do we have a COO? And why am I in this role? The scope and situation of the role vary by organization and industry. It could involve overall operations responsibility or business support functions. Understanding these factors is crucial for a COO to succeed.
For example, in a heavy industry like mining, the COO might be responsible for primary operations. In a financial institution, it could be business support functions. In other cases, the COO's role is similar to that of a president, overseeing business units. The situation, such as a business transformation or recovery, also drives what needs to happen in operations.
Seeing What Drives Value
The COO must be clear on what creates value for the company. It's not just about low cost; it's about understanding the strategy, how operations drives it, and which operational sensitivities determine outcomes. Connecting the cascade of drivers to strategic objectives is essential. For instance, a logistics company launched initiatives but found they had little impact on overall results. A mining company focused on individual site performance but missed the big picture. The COO is best positioned to fill these gaps and prioritize operations efforts.
Setting the COO Agenda
The COO agenda guides actions, tests investments, and helps focus on "COO-only" topics. Its core elements vary by company and context. These include vision, where only 22 percent of employees believe leaders have a clear direction. It also includes plan and execution, stakeholder engagement, organization and talent, and a personal operating model.
An effective operations vision articulates the plan for success and serves as a guide for employees. It must be unambiguous and communicated clearly. A robust plan intertwined with the vision is essential for moving forward. COOs should assess and act across five areas: operations, stakeholders, culture, team, and themselves.
Engaging Stakeholders
The COO plays a pivotal role in building relationships with stakeholders. Internal stakeholders like the CEO, C-suite, and board are crucial. For example, the COO must understand how to collaborate with the CEO, communicate the "full operational picture" to other C-suite executives, and engage with the board in focused meetings. External stakeholders such as regulators, suppliers, and customers also matter. The COO should have market-facing experience to collaborate effectively with the marketing function.
Building Organizational and Talent Excellence
About 70 percent of corporate transformations fail due to organizational issues. The COO is critical in ensuring the right infrastructure and talent are in place. This includes ensuring strong frontline leadership, being clear about intentions, and considering how to amplify success. COOs should assess their organization and talent, build capabilities, and manage behaviors.
For example, they should focus on developing managers as the "true center" of the organization. They should also use concepts like leader's intent to guide decisions in ambiguous situations. Additionally, COOs need to consider how to influence change through various techniques like role modeling, understanding and conviction, confidence and skill building, and reinforcement with formal mechanisms.
Establishing a Personal Operating Model
A COO's role is different from their previous one. They need to "lean into their left hand" and improve in areas outside their core expertise. Successful COOs find a balance between running the operation and delivering strategic outcomes. They need to be deliberate in establishing their personal operating model, clearly defining their role.
They should know their strengths and limitations and align talent accordingly. Creating an actionable plan and sticking to it is also important. COOs should be clear about what data and reports they need and how frequently. They should also lead to inspire talent and shape the culture.
Managing Time and Energy
Effective time management is a challenge for COOs. They should spend no more than a third of their time on running the operation and focus on COO-only topics. Stepping back and making data-based decisions instead of being reactive is crucial. Scheduling activities to prevent "energy troughs" and setting boundaries is also important.
Today's effective COOs have a defined agenda aligned with the business strategy. They drive collaboration with stakeholders, are inspirational leaders, and delegate well. By focusing on these aspects, they can deliver the highest impact for the organization.