Frontline to front role: how the COO is evolving from operations to strategy.

The COO is truly on the frontline of business leadership. No other role has as many varied touchpoints and responsibilities both inside and outside the business. They truly are the glue that sticks the organization together.

The centrality of this vital role was brought home during the Covid lockdown where COOs were utterly consumed with day-to-day business, addressing unpredictable staffing issues, solving problems and ensuring reliable supply chains.

Change offers opportunity

The COVID disruption was sudden and extreme, but the COO’s central role was merely one indicator of how that role is evolving as businesses are transformed by forces like digitization.  

Traditionally, the COO’s role was internally focused on operations and implementation, and the heavy lifting on strategy development was left to other members of the C-suite. Those days are over.

 “This changed situation has also opened clear opportunities for the ambitious COO. And the far-sighted company”, states Jürgen van Zwoll, Partner at Odgers Berndtson Germany.

In a recent opinion, EY addressed the potential of the modern COO: “As companies rebound from the pandemic, COOs are in prime position to lead and accelerate strategic transformation. By using your unique operational perspective and access to data-driven insights you can become key drivers of strategy development.”

What’s on their minds?

But before we address the future, what are COOs concerned about today? A global survey reported by Raconteur, revealed the top five issues that were on their minds.

The first is worker shortages and the battle to retain the right talent by investing in tech that’s easier to use and able to create the best remote working experience, plus AI and automation to make jobs more rewarding too.

Digital transformation initiatives were second on the COO’s list of concerns, perhaps unsurprisingly.

A third concern was the lurking threat of Covid-19 variants requiring restricted or remote working. In places like China and Japan, the pandemic is still very much a force even as restrictions begin to be lifted.

Unsurprisingly, the continued global supply chain disruption is a big concern, with efforts to nearshore and reshore drawing time and attention. Given the war in Ukraine, the energy crisis, and ongoing shortages of key components, these efforts are likely to continue.

Finally, the COO’s surveyed were focusing attention on making their supply chains more sustainable, many having already had to cope with the impacts of climate-related disasters, regulatory/political uncertainty, and civil society pressure.

Looking forward

Returning to the future with all those present preoccupations in mind, there is clearly an opportunity to get on top of those changes to carve out a more strategic role that plays a defining role in driving transformation.

The logic for this is that the COO can use their unique operational perspective and access to data-driven insights to become key drivers of strategy development.

As EY point out, “Disruptive forces, all accelerated in a post-pandemic world, have put your role at the intersection of functions essential to strategy definition. COOs have unique insights into customers. Customer relationships are increasingly technology-driven – from sensors in products to chatbots providing customer support. These digital interfaces give you highly current insights into customer wants and behaviors.”

A broad and deep perspective

In detail, this opportunity is based on control of key analytics with the majority of data generated withing the COO’s domain. Having a real insight into key data like production runs, how products perform, customer fulfilment and other key indicators means that the COO gets both a broad and deep perspective to what is working and what is not.

Then, if the organization has to respond to what is shifting in the market or what a competitor is up to, the COO is at the operational heart of the enterprise, able to direct flexible manufacturing and agile systems to respond and take the initiative.

Olaf Szangolies, Partner at Odgers Berndtson Germany says, “When it comes to risk, the COO is in the front-row and brings a very up-to-date understanding that comes with operating across borders via supply chains and exports.”

Exposed to geopolitical risk, trade barriers and sovereignty rules makes the COO’s insights a valuable input on strategy, especially around trade, the basic bedrock of for a growth strategy to be truly sustainable

A key relationship

Relationships are key if the COO is to fully maximize the role and that starts at the very top. As Raconteur puts it, “The COO and CEO relationship is critical. Working together they need to sustain unwavering alignment, achieve deep trust and be in sync on the major opportunities, challenges and risks”.

This will favour the COO with the soft skills and collaborative attitudes to make the relationship work. In the future, influential leaders will overshadow the importance of technocrats.

Continue the discussion with us

If you would like to discuss this subject in more detail, and its application to your organization or personal COO career trajectory, please don’t hesitate to get in touch.