A chief operating officer (COO) (or chief operations officer) is an executive in charge of the daily operations of an organization (i.e. personnel, resources, and logistics). COOs are usually second-in-command immediately after the CEO, and report directly to them, acting on their behalf in their absence. As such, COOs tend to be employed by the largest organizations, essentially freeing up time for the CEO to focus on long-term business strategies and challenges rather than operations. Smaller organizations and startups that introduce a COO into the reporting structure risk creating power struggles and confusion among employees, according to some management experts.
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- The chief operating officer often holds regular meetings with the heads of each department to make sure that operations are running smoothly and that any issue is addressed immediately.
- This type of redundancy also does little to help the business as a whole.
- This starts by understanding what a COO does and how they can help companies reach new levels of excellence.
- A COO is second in command to the CEO, who is the top executive at a company.
- According to research by Indeed, the average COO had 10 to 15 years of relevant experience before landing the role.
If the company plans to increase the production of a good, for example, the COO makes sure this happens. He or she makes sure this happens by working with the necessary departments in the company. The CEO, on the other hand, handles the overall management of the company. While CEOs may get most of the spotlight, COOs can still be a major force for successful companies.
Chief operating officer
A COO is second in command to the CEO, who is the top executive at a company. While the CEO is responsible for an organization’s long-term success, the COO is usually responsible for the day-to-day operations. No one else in the company, save for perhaps the CEO, knows how the business runs and how to make it better.
Relationship with a CEO
When companies need to change course or turn things around, The Innovator is the type to get the job done. By 2022, the number of leading companies with a COO had risen again to 40 percent. Clearly, businesses are beginning to recognize the value that a COO brings to the table. This starts by understanding what a COO does and how they can help companies reach new levels of excellence. The salary of a COO will vary greatly depending on a variety of factors, including the company they work for, their experience, and their contract. It sells database software, cloud technology, management systems, and a variety of other products.
I’m not sure of many companies that want to make less money or reach fewer people over time. Either way, the position is used as a training and testing ground for the next CEO. The role of a COO covers many important aspects of a business, but one crucial element is that a COO should have skills that pair well with the CEO.
The CEO may also create strategies for the Chief Operating Officer to implement. Though there is no specific educational track that guarantees landing a COO role, 65% of chief operating officers in the US have a bachelor’s degree and 20% have earned a master’s degree. The COO needs to know how key functions of the company (including product, finance, marketing, service) all work together to deliver a positive experience for the customer while reaching key business goals. Learn how other members of the executive management team, like chief information officers are evolving.
They collaborate with department heads to align strategies, drive operational efficiency, and enhance productivity. The COO often serves as a key liaison between different functional areas, facilitating communication, coordination, and integration across the organization. Their role is crucial in streamlining operations, improving organizational effectiveness, and supporting the CEO in achieving strategic objectives. A COO, or Chief Operating Officer, is a top executive responsible for overseeing the day-to-day operations of an organization. They work closely with the CEO and other senior leaders to execute the company’s strategic plans and ensure the efficient functioning of various departments and processes.
The Chief Operating Officer (COO) – a member of the executive management team for the company – is one of the highest positions at a company. COOs are directly and intimately connected to the Chief Executive Officer (CEO). Furthermore, COOs frequently engage with external stakeholders, including clients, suppliers, industry partners, and regulatory bodies. They attend industry events, conferences, and meetings to stay updated on market trends, establish relationships, and represent the organization. This external engagement is crucial for networking, business development, and staying informed about the competitive landscape. This allows the COO to gain insights into operational processes, identify areas for improvement, and ensure operational consistency across locations.
Get exclusive tools and resources you need to grow as a leader and scale a purpose-driven business. In this article, learn about what a COO does and how one can uniquely contribute to the success of your company. As of Q1 2024, Dell was the second-largest computer company in the world, with a market share of 14.84%. When Lane came on board, he integrated packaged software and high-margin professional service.
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. The type of COO who believes in getting things done on a day-to-day timeline may be seen as more of a manager. Most COOs want to be involved in the details, but this type is one that goes even further than that. They’re able to break things down into more manageable parts and communicate what needs to get done on a monthly, weekly, daily, or even hourly basis. Some might look at this type as a micromanager, but they make sure to keep things organized and under control no matter the circumstance.
Michael Ovitz was president from 1995 to 1997, being hired by Eisner and then dismissed not long afterwards. Bob Iger was president and COO from 2000 to 2005, when he succeeded Eisner as CEO. The chief operating officer’s job revolves entirely around the CEO’s wants and needs. Whatever operational tasks need to be accomplished, the COO makes sure that they are done. It usually involves working with the heads or teams of overseers working in each department (e.g., IT, finance, marketing).
Similar to the Vice President of a country, the COO works in tandem with the chief executive officer to make sure that all company operations fall in line with the plan established by the CEO. In 2021, the average base salary of a chief operating officer was $145,467 per year, though this figure can vary depending on the company and the experience level of the candidate. 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. 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.
When the CEO position eventually opened up in 2005, Iger seemed like a natural choice to helm the company. Top executives often work more than 40, including weekends and evenings. As with other details of the job, this will vary depending on the needs of the company. As of 2022, 40 percent of leading companies had a COO, with the financial and energy sectors leading the way at 48 percent. Furthermore, the role itself has changed—it’s bigger, bolder, and more transformative than ever. Other positions in a company – even managers of their respective departments – can generally transfer from one company to the next without a significant amount of difficulty.
For instance, when a company experiences a drop in market share, the CEO might call for increased quality control, in order to fortify its reputation among customers. To be considered for a COO position, one needs a combination of education and significant experience. Upgrading to a paid membership gives you access to our extensive collection of plug-and-play Templates designed to power your performance—as well as CFI’s full course catalog and accredited Certification Programs. Put simply; the CEO plans the strategy and oversees it while the COO implements it. In other words, one thinks things up and gives the orders while the other puts them into action.
The Internal Hire is often someone who has risen the ranks of the business. Maybe they started out in the lowest position, but through hard work and determination, they received promotion after promotion before entering the C-suite. Many companies like to promote internally this way because this type of COO knows every aspect of the company before they’ve even set foot in their new office.
Schwartz became sole president of Bear after Spector was ousted, and several months later assumed the position of CEO as well when James Cayne was forced to resign (Cayne remained chairman). The various types of chief operating officers reflect the individual’s leadership style. COOs have a strong educational background combined with extensive work experience. A strong COO will have worked in a variety of positions, particularly in a specific organization, to understand all of the different parts of a business and how they work together.
