COOs ‘get stuff done.’ Sometimes the good stuff, more often the bad stuff. The ultimate completer finisher, they are all about delivery and realising a plan.
The role of the COO is often defined by the organisation it serves: no two are exactly the same. The agendas COOs work towards are determined by where the firm is in its life cycle; from high-growth start-ups to more mature firms undergoing re-structuring, transformation or consolidation.
While each business is different, we can broadly categorise COOs into two groups. The Commercial COO is responsible for co-ordinating the front end business unit. This could be building the product or service or making sure the sales activities are aligned with clients and their needs. The COO serves to introduce the right platform and tool kit to drive revenue and ensure the clients get what they want.
This is different from the Operational COO, which might be considered the more traditional form. Their emphasis is ensuring the back office ‘engine room’ of a company works to underpin all of the organisation’s activities. Operations and technology platforms in particular form a major focus for these COOs, with additional functions such as HR, risk and management of assets, such as property, often included.
These roles may seem quite different, but what is consistent is the need for COOs to create a functioning bridge between the front and the back of the business, ensuring one is aligned to the needs and efficiencies of the other. This is no mean feat at the best of times, but in a financial services market wracked by seismic change following the financial crisis, the challenge and dependency for a COO has become immense.
In the banking world, COOs are attempting to force through change while dealing with severely limited resources. Declining revenues have restricted budgets for investment while cutting costs through automation and headcount has increased the burden of risk on underlying platforms. All this is taking place at a time when regulators have increased the requirements for reporting and transparency. Up to 90% of change budgets at major financial institutions are now being directed towards meeting regulatory requirements rather than being focused on the bottom line for the benefit of its shareholders; who still want their cake.
To be successful, a COO needs a clearly defined objective; their job is to work out how to get there. In this, the COO can act as the CEO’s enforcer, ensuring the minute details are perfected to support the larger business’ goals. This often involves pushing through change across multiple front and back office areas of a business, where cuts and alterations to working practices can often bring a great deal of pain. Once this work is largely complete (it’s rarely ever ‘done’) COOs often feel the need to move on to new roles. If they have any friends left at an organisation they may move internally, but more frequently it’s time to move out and clear out and find something new.
The new market reality does present opportunities, however. World of Fintech is coming to town and it’s coming quickly. The ability to build a new platform, product or service and get it to market is where COOs can really make the difference between success and failure. Commercial COOs will be invaluable in introducing more direct, technology enabled communication with clients, while Operational COOs will be sought out to ensure the infrastructure is in place to underpin new strategies.
Whatever a business’ need, all types of COOs are now in a much higher profile job than they were 10 years ago. If not the CEO, a COO can often perform as the next best thing.