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Column
Recent events refute speculation that need for COOs is in decline. Just what is it about the COO role that makes it so attractive? By Nate Bennett and Stephen Miles Over the past several years we have been involved in a series of research efforts geared at better understanding what we view as arguably the most critical of the C-suite positions: that of the chief operating officer (COO). Among our conclusions is that the COO role is unlike other C-suite roles because of myriad nuances related to how that individual must complement the CEO. Finding the right partner, creating the right chemistry, bringing the right person on board and maintaining the right balance between the two executives is a very complicated process. Not all companies invest properly to get it right at the start, while others fail to recognize that it isn’t a “one and done” process – it requires constant attention to produce the positive results seen in companies like Microsoft, Adobe, and others. The reader may note that we have carefully used the word role to refer to the COO. This is intentional and illustrates our suggestion that the role be recognized as unlike other c-suite level positions. A role is understood to be a part that someone plays, whereas a position denotes a specific “place” on a team where an individual performs a job. The difference we intend to highlight is that positions are typically well-understood and fairly static. If someone reveals he is the left fielder for the Boston Red Sox, even a casual fan understands quite a bit about what he does. Roles, by comparison, can be filled in a number of ways. The clubhouse leader for the Red Sox might be a player in any of the nine positions. Further, that leadership status may be ephemeral — the leadership role may be taken by different players in different situations or at different times. A ‘Clubhouse’ Role Our contention is the COO role is more like the leadership role in the clubhouse, and that other C-suite titles are better defined as positions. We make this distinction because recent events have sparked speculation that need for COOs is in decline. We disagree, because the role will never go away. And the way in which companies name job functions is as much about their own idiosyncratic culture as it is anything else. In fact, some companies are now allowing employees to create their own titles (a recent Forbes.com article included examples such as CEO of Love and Director of Chaos). Instead our perspective on the data leads us to believe that the role is as healthy as ever — and that in fact everyone wants to be the COO. Just what is it about the COO role that makes it so attractive? Obviously, the COO role is responsible for running the company. He or she must ensure the numbers are met; deliver on the mission, vision, and strategy; provide value to customers; build the product and company brand; and lead a large segment of the workforce. As a result, this is clearly a critical and potentially enormously fulfilling role. Hands Back on the Wheel Currently, individuals coming from different titles have established — or are thought to have established — their role in such a way that it overlaps significantly with what has traditionally been understood to be the COO role. In some instances this appears to be driven by a sense that they have to get “their hands on the wheel” of the company to correct its course; in other instances it appears to be driven by a need to become more central to a company’s operation. For example: 1. Recently Howard Schultz returned to the leadership position at Starbucks. His succession plan — to groom then-COO Jim Donald into a successor — did not produce results that met muster. He has stepped back in to run the company — he wants to be its COO! 2. Just a short time ago, in a story with striking parallels, Michael Dell returned to the company that bears his name. His successor, Kevin Rollins, was groomed for the CEO position while serving as COO. The results of his leadership were not deemed acceptable and Dell has returned to run the company — he wants to be its COO! 3. A recent CF0.com article was titled “Who Needs a COO?” The author made the case that CFOs are better partners to the CEO and that involving the CFO in operational details means “the need for a COO goes away.” So it appears that CFOs also want to be COOs. 4. A number of companies — perhaps because they sense a concern about execution across the organization – are experimenting with a relatively new role: chief strategy officer (CSO). Because the CSO role is nascent, it will no doubt continue to evolve. And, as we have observed with the COO role, it is likely to be enacted differently to meet the particulars of the company and its leadership team. That said, a large part of the CSO job does appear to be coalescing around execution — particularly of near-term strategy. So it appears that CSOs also want to be COOs! Well Suited, Clearly Defined The important point to keep in mind is that what is central to the effective, sustainable operation of a company is a capable team of individuals placed in roles for which they are well suited and that are defined clearly so they — and their legions of subordinates — share a clear understanding of who has responsibility for what. How the roles are named is useful only to the extent that what the name connotes is widely understood. |
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Bennett is the Catherine W. and Edwin A. Wahlen Professor of
Management in the College of Management at Georgia Institute of Technology. His
research and teaching interests include leadership and strategy
execution and top management of team dynamics. Stephen Miles is managing partner of the Leadership Consulting Practice at Heidrick& Struggles and oversees the firm’s worldwide executive assessment/succession planning practice. The two co-authored the book, “Riding Shotgun: The Role of the COO,” published in 2006 by Stanford University Press. The authors can be contacted at nate.bennett@mgt.gatech.edu and smiles@heidrick.com. Copyright © 2008 Directors & Boards, P.O. Box 41966 Philadelphia, PA 19101-1966. All rights reserved. Contact the webmaster. < Privacy Notice > |
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