Adi is the Founder & CEO of Sheba Consulting and a seasoned leader with 30+ years of experience growing businesses and leading change.
Every successful business requires vision and a robust operational plan to execute that vision. In a well-run business, these two parts are intertwined but are carried out by at least two people with very different skill sets: the chief executive officer and the chief operating officer. While a CEO’s role is widely recognized and understood, a COO is often overlooked as second in command to the CEO. However, their role is much more complex than this. So, what is a COO, and how can they serve you?
The COO is responsible for ensuring the company’s day-to-day operations align with the company’s vision and goals. They develop and implement operational processes that drive efficiency, reduce costs and enable scale. This is achieved by formulating and implementing strategies that drive business growth while maintaining the sustainability and long-term health of the entire operation.
I’ve served in various COO roles over the last two decades and had a front-row seat to the demands and responsibilities. Before engaging the help of a COO, it’s important for business owners and CEOs to understand the role of a COO and what they can expect. A good COO should:
• Increase efficiency. A COO can enhance operations and boost efficiency by identifying gaps and weaknesses while implementing, supervising and monitoring operational processes, leading to increased productivity and cost savings.
• Lead to better decision making. With a COO in place, the CEO can focus on strategic planning, growth, sales and business development, freeing up time for more thought-out and effective decision-making.
• Improve risk management. A COO can identify and mitigate risks that could impact operations, helping protect the company from potential threats.
• Help you to spend more efficiently. The COO should be responsible for managing operational costs and ensuring budgets are set, met and adjusted according to dynamic business needs and realities.
• Develop talent. The COO oversees the company’s complex and dynamic organizational structure while directing employee recruitment, training and development efforts accordingly, ensuring the right talent is in the right seats through the various stages of growth.
• Provide greater accountability. The COO’s overall management and direction of company operations can increase accountability across employees, tasks and projects, ultimately leading to improved performance and results.
Although a COO can significantly enhance your business’s progress, the wrong COO can greatly hinder it. So, what should specific skills should you look for when searching for the right COO? A good COO is:
• An effective leader. A successful COO must be able to motivate and inspire employees to achieve the company’s objectives.
• A strategic thinker. A COO must be able to develop long-term plans and strategies. Also, a skilled COO possesses the rare ability to manage both the big picture and the details while knowing when to appropriately focus on each.
• A proponent of operational excellence. The COO must have a strong understanding of operational processes while being able to effectively implement systems that support them.
• A finance whiz. With or without a CFO, the COO must understand financial management as they manage the company’s profits and losses and make informed decisions based on financial data.
• A strong communicator. The COO must be able to communicate effectively with senior executives, employees and external stakeholders alike.
If you’re a small business owner, you might be thinking that sounds like an expensive hire, but it doesn’t have to be. While bringing on good talent is always going to include some investment, many companies that don’t have the capacity or need to hire a full-time COO opt for fractional COOs instead. These are typically experienced executives who’ve held various senior leadership positions as full-time employees and offer their services to small- and mid-sized businesses on a more limited basis. This approach can allow businesses to reap the benefits of a COO in a more cost-effective way.
Fractional COOs can also bring a fresh, outsider perspective to companies through new ideas and solutions while improving operations and driving results. They often work with multiple businesses simultaneously, providing the experience of seeing operations from every angle. As a fractional COO, I have seen firsthand the benefits this model can bring to businesses that are open to the concept.
Whether you opt for a full-time or fractional COO, the key to success lies in the partnership and collaboration between CEO and COO. A genuine collaboration between these two leaders is the foundation for success. When this partnership falters, not only do problems remain unsolved, but they are often exacerbated.
Open and direct communication and a willingness to embrace change are vital components of a successful CEO-COO partnership. Business owners must be willing to relinquish some control and allow their COOs to fulfill their responsibilities. Failure to do so will inhibit the business from realizing its full potential.
From my personal experience, the most rewarding outcomes emerge when CEOs and business owners are flexible and receptive to the perspectives, strategies and transformations their COO can provide. It’s through these moments of genuine collaboration that businesses can flourish and overcome challenges.
In conclusion, the value of a strong CEO-COO partnership cannot be overstated. By investing in and entrusting operations to a skilled COO, businesses can unlock the transformative potential of this strategic relationship.
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