What Does a Chief Operating Officer (COO) Do? Roles and Qualifications

What Is a Chief Operating Officer (COO)?

The chief operating officer (COO) is a senior executive tasked with overseeing the day-to-day administrative and operational functions of a business. The COO typically reports directly to the chief executive officer (CEO) and is considered second in the chain of command.

Key skills required for COOs include analytical know-how, significant industry experience, and strong leadership abilities, as well as educational credentials like an MBA.

The COO usually complements the CEO by dealing with internal company operations. This frees up the CEO to concentrate on external strategy and public representation.

Read on to learn more about chief operating officers, including the different types (there are generally seven) best suited for different situations and different companies.

Understanding the COO's Role in Business Operations

The COO focuses on implementing the business plan, while the CEO focuses on long-term goals and the company's broader outlook. In other words, the CEO devises plans, while the COO implements them.

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.

The COO might instruct human resources (HR) to hire more quality control staff to carry out the CEO's mandate. The COO may also initiate the rollout of new product lines, and may likewise be responsible for production, research and development, and marketing.

Key Responsibilities of a COO

A chief operating officer is responsible for the day-to-day operations of a company. Their responsibilities can include:

• Recruitment and hiring
• Financial operations
• Budget development
• Production oversight
• Executing business strategy

Remember, a COO's role can vary based on each company's specific needs.

The COO often manages internal affairs, while the CEO acts as the public face, handling external communication.

In many cases, a COO is specifically chosen to complement the skill sets of the sitting CEO. In an entrepreneurial situation, the COO often has more practical experience than the founding CEO, who may have come up with an excellent concept but lacks the startup know-how to launch a company and manage its early stages of development.

Consequently, COOs often design operations strategies, communicate policies to employees, and help HR build core teams.

Different COO Types and Their Functions

Every company is different and in a different stage of growth. A new company will have very different needs from a company that has been around for 100 years and has a large market share in its industry. Depending on the company and its needs, cycle stage, and unique characteristics, the specific type of COO required to help it realize its goals will vary.

There are generally seven types of COO:

• The executor, who oversees the implementation of company strategies created by senior management and who has the responsibility of delivering results on a day-to-day basis.
• The change agent, who spearheads new initiatives and may be in charge of leading specific company turnarounds.
• The mentor, who is hired to counsel younger or newer company team members, such as a young CEO.
• The most valuable player (MVP), who is promoted internally to ensure they don't defect to a rival company.
• The "other half," who is brought in to complement the CEO and who typically has the opposite characteristics and abilities of the CEO.
• The partner, who is brought in to co-lead as another version of the CEO.
• The heir apparent, who becomes COO to learn from the CEO in order to ultimately assume the CEO position.

Qualifications and Vital Skills for COOs

A COO typically has extensive experience in the field within which a given company operates. COOs often work for at least 15 years climbing the corporate ladder. This slow build helps prepare COOs for their roles, by letting them cultivate extensive experience in the practices, policies, and procedures of their chosen field.

Also, because they're traditionally responsible for directing multiple departments, COOs must be resourceful problem solvers and must possess strong leadership skills. Most COOs have at least a bachelor's degree, often supplemented by a Master of Business Administration (MBA) degree and other certifications.

Pathway to Becoming a COO

The path to becoming a COO can be a long one, just like for any C-suite role. It can take many years of learning on the job as well as in school. Others become COO much more quickly, such as by joining a startup or starting a business.

To become a COO, focus on these steps:

1. Get your degree: Pursue a bachelor's or master's degree in business for foundational knowledge.
2. Gain varied work experience: Seek opportunities in different departments to broaden your understanding.
3. Develop leadership experience: Enhance managerial skills for organizational leadership.
4. Build your network: Cultivate strong professional relationships inside and beyond your company; they can lead to your first or next COO role.

Comparing the Roles of COO and CEO

There are some basic similarities between these two roles. Both the CEO and the COO are inside directors of a company. They both are tasked with participating in daily management activities to keep the company running smoothly.

The CEO leads the company, while the COO is second in command, reporting to the CEO.

Where the CEO is typically outward-facing, the COO is typically inward-facing, in charge of internal operations and communications. And while the CEO devises business strategy, it is the COO who oversees its implementation.