COO: The Role Explained

What is a COO?

A Chief Operating Officer is regarded as one of the highest-ranking executives in an organization or business model. In a general sense, the COO is responsible for the daily operation of the company; the individual is required to report the company’s daily activities or maneuvers to the firm’s highest ranking executive—typically the Chief Executive Officer. In a number of business models, the COO will also carry the title of President, which typically denotes the individual as the number-two in command (the CEO is typically the lead officer). That being said, in some cases, the duties of the COO may be divided and carried out by Sub-C-Suite executives, including the Executive Director and the Vice President.

Dissimilar to other C-suite positions--which tend to be classified based on universal responsibilities (for example the CFO will always handle the firm’s finances)--the position of COO is defined in accordance to the acting CEO. In many ways, the selection of a COO is similar to the election of the Vice President of the United States; the power and responsibilities will vary dramatically depending on the needs of the particular President. As a result of this metaphor, it can be stated that the role of the COO is highly elastic and contingent. The role and precise duties of the COO will fluctuate based on industry and specific company, as well as be influenced by other executive officers.

Functions of a COO:

As stated above, the role of the COO will differ greatly from industry to industry and from organization to organization. For example, in the manufacturing industry, the primary responsibility of the COO is to develop, design and improve the systems that create and deliver the firm’s products. In this industry, the COO is tasked with the critical duty of ensuring that business operations are efficient and effective and that the firm’s resources, services to customers and analysis of inventory systems are functioning efficiently and effectively. Some organizations may function without a COO, while others may employ multiple posts. Despite differences in raw numbers and the more common variations found in specific duties, there are some universal functions that COOs will typically perform:

• The COO must distribute and utilize limited resources so the firm achieves maximum value for the company’s stakeholders. The COO, in attempting to reach such efficiency levels, will be instructed by the CEO and Board of Directors.

• The COO will develop the organization’s strategy/mission statement and deliver this document to the lower-ranking staff members. Once the mission is understood, the COO will implement appropriate rewards, as well as corrective practices, to align the employees with the company’s goals.

• The COO is responsible for monitoring and maintaining staff and the expectations of such individuals. The COO will motivate employees to fulfill organizational requirements and will monitor employees to ensure the efficient completion of a task.

• The COO will drive performance measures for the operation—including a full consideration of efficiency versus effectiveness—in the form of dashboard statistics for review of key indicators.