Season’s Greetings to all my readers.
The Chief Operating Officer (COO) position has emerged from the shadows as a fundamental role in getting things done. Tim Cook of Apple performed the role brilliantly supporting Steve Jobs in executing a brilliant vision. Sheryl Sandberg, ex Google became Facebook’s COO in 2008 and is now a key lieutenant to CEO Mark Zuckerberg and an essential part of the pre and post IPO team.
However its not just a big company thing because I fundamentally believe the role is the key to any private company’s scaling strategy. It’s the glue that binds everything together. It’s the continuity script supervisor that makes sure the narrative is consistent across the company. It’s the guy or girl that keeps the trains running on time.
How does it impact the CEO’s role?
I would argue there is always a Venn Diagram at play between the roles of CEO and COO, some issues overlap, but the creating of the COO role allows the CEO to do 5 things better:
- Sleep. It helps knowing someone is pouring over the details, really following through on actions needed.
- Succession plan. Building a strong COO role allows the grooming over time of a successor to the CEO at least as one option.
- Leadership. Ensuring the company is sticking to its strategic objectives.
- Focus on special projects when required which could include: customer initiatives, entry into new markets, acquisitions, or developing more robust product road maps.
- Staying on top of the market dynamics, legislation, technology shifts, competitor behavior.
All of these issues take time and conflict with running day to day operations.
COO Performance Profile
So what fundamentally does the COO do? Well here are 13 items that could be in the key performance requirements of the job:
- Build an operational blueprint for the business covering all departments. Design policies and protocols that aligns all the resources of the company to support the vision.
- Mentor all key managers in business disciplines including finance, metrics, sales techniques, effective marketing strategies and teach them the economics of running a business.
- Continually review processes looking for inefficiencies and any areas where value is being lost.
- Always be assessing the quality of all staff and their ability to perform the role required. Ensure all roles have clearly defined Performance Profiles.
- Define key metrics needed by all managers to perform their roles.
- Ensure all reports are necessary, succinct and have clear calls to action.
- Design relevant meetings that answer key questions to ensure the activities of all managers are achieving success.
- Build a New Product Development process that is consistently applied to filter and ultimately launch new services.
- Build an internal training system – University – using existing resources, to ensure that all staff are being constantly developed and nurtured.
- Drive all marketing activity to ensure that sales leads are produced on a consistently monthly basis and set targets for all activity.
- Drive sales behavior and ensure that all sales team members have firstly, excellent product knowledge, secondly excellent customer knowledge and finally are executing a world class sales process such as the Prime Process.
- Ensure world class production processes are in place and are constantly evolving.
- Ensure Product Road Maps are clearly defined, make commercial sense and have propositions for customers wrapped around how they would use the product.
Smaller Companies under $100m Sales
Because of the cost and risk involved for smaller businesses of bringing on a senior full time director, a more economical model is to have the COO role done part time. The Portfolio Partnership is currently engaged in fulfilling this role on a part time basis with many clients working inside their business helping to execute a new operational blueprint aligned with the CEO’s vision. We also backfill this role when the time is right by mentoring younger managers.
It’s interesting that Private Equity players are highlighting their talented Operating Partners who can bring great value to their portfolio. Not everyone believes they can – see link. At TPP we have a bench of successful CEOs with industry knowledge and know-how that get it. We won’t match a large public company guy with a $20m fast growing recruitment business!
On the other hand I believe many private companies should be investing in this role as a full time position to really establish an operational blueprint. Just be careful that you have a candidate that can execute the Performance Profile noted above. I’ve seen too many CFOs and Sales Directors fail at this role because they’ve never had a chance to develop their careers outside their specialist field and are not ready for this broader position.
Have a great holiday.