Ask ten companies to describe their chief operating officer’s job and you will hear ten answers. When Nathan Bennett and Stephen Miles studied the role for Harvard Business Review in 2006, they found no agreed description of the job, and no agreement even on its name. The Bridgespan Group, studying COOs in nonprofits, reached the same place: the job’s most salient characteristic, it concluded, seems to be its variety.
Variety makes the role hard to define, to hire for and to judge. Yet behind every version of it sits one shape. A good COO carries the company’s strategy into the work people do every day, and carries the lessons of that work back into the strategy. This article maps that arc: the role’s origins, the gap it closes, the six areas it covers and the attributes it demands.
A role shaped around the CEO
Most roles in the C-suite are defined by a function. Finance belongs to the CFO and technology to the CIO. The COO’s role is defined by the chief executive. Bennett and Miles found seven reasons companies create one: to execute the CEO’s strategy; to lead a turnaround or another major change; to mentor a young or new CEO; to supply skills the CEO lacks; to share the load as a true partner; to test a likely successor; or to keep a valued executive from leaving for a rival. EY’s 2012 study of more than 300 COOs offered an image for the result. If the CEO and CFO are rocks in a river, the COO is the water that fills the space around them.
Fewer large companies now fill that space with one person. Crist|Kolder Associates found that the share of Fortune 500 and S&P 500 companies with a COO fell from 48% in 2000 to 36% in 2014. Gary Neilson of Strategy& linked the decline to chief executives taking on more direct reports and better dashboards. The role still leads to the top. Spencer Stuart found that 36% of the S&P 500’s new chief executives in 2020 came from the COO’s or president’s chair, more than from any other role.
Whether a COO makes a company perform better is less settled. A 2004 study of 404 firms by Donald Hambrick and Albert Cannella found that companies whose CEOs had COOs performed worse. A 2009 study by Jeremy Marcel found the opposite, and showed that the effect depends on the rest of the top team. Read together, the research makes one point: a COO helps when the role fits the CEO and the team, and hurts when it only adds a layer.
The gap a COO closes
The case for the role starts with a gap every leadership team knows. In 2005, Michael Mankins and Richard Steele found that strategies delivered, on average, 63% of the financial value their plans promised. In a 2013 survey of 587 senior executives by the Economist Intelligence Unit for PMI, 61% said their firm often struggled to bridge strategy and day-to-day implementation, and only 56% of their strategic initiatives had succeeded over the previous three years. In 2015, Donald Sull, Rebecca Homkes and Charles Sull surveyed nearly 8,000 managers: 84% could rely on their boss and their direct reports, but only 9% could always rely on colleagues in other units.
That last figure locates the breakdown. Plans fail less often in the boardroom than between functions, where no single leader owns the handoff. Closing that gap is the COO’s work.
You may have read that nine in ten strategies fail. The figure is widely repeated and rests on thin evidence. Researchers who reviewed the published estimates found them ranging from 28% to 90%, judged the top of that range likely an overestimate, and found no single reliable figure. The surveys above make smaller claims, and they are enough.
Six areas, three arcs
Our view of the role adapts EY’s wheel of the COO’s contribution. It has six areas of focus in three arcs, and the arcs form a loop.
Drive strategy. The COO helps shape strategy: supporting the CEO in setting the vision, running the strategic planning process and stress-testing strategies against the organization’s capacity to deliver them. The COO then translates strategy to operations, cascading it into operational needs and a roadmap, and designing the operating model that carries it.
Deliver results. The COO drives strategic initiatives, leading the largest of them and bringing functions together on work no single function owns. The COO also owns strategic assets: the critical functions of the company, and the leaders and high performers who run them, coached for the next stage.
Align organization. The COO positions and scales the organization, anticipating future needs, leading the program management office and driving continuous improvement across every function. And the COO manages performance, running integrated planning and giving leaders the business insight and intelligence to act on it.
The three arcs depend on each other. A strategy never translated stays a document. Initiatives without an aligned organization stall at the handoffs Sull’s managers described. Performance data that never reaches the strategy table cannot change the next plan. The COO is the one executive whose job crosses all three.
Measured on half the arc
Most COOs are judged on only part of that loop. EY asked COOs how strongly they are measured on each of eleven criteria. The top three were all operational: increasing efficiency (63%), keeping to the budget (61%) and realizing cost savings (59%). Strategic planning came in at 53%, contribution to transformation at 44% and business model innovation at 22%.
Operational measures are the right foundation, since operations are the COO’s home ground. But a role measured only on cost and efficiency drifts back toward cost and efficiency, and the strategy half of the arc goes unowned. If a company wants its COO to shape strategy and lead change, the measures should say so: progress on strategic initiatives, the health of the operating model and the strength of the leadership bench.
The attributes the role demands
Six attributes mark the COOs who carry the whole arc:
- They adapt constantly, and lead change instead of waiting for it.
- They work at every level of the organization, from the board’s strategy discussion to the front line.
- They have worked in more than one operating model, and can judge which one fits.
- They know operations across functions, and improve them.
- They bring deep knowledge of the organization, its industry and its market.
- They adjust quickly when conditions change.
Larry Bossidy and Ram Charan argued in Execution (2002) that a company’s ability to execute rests on three linked processes: people, strategy and operations. The attributes above map onto the same three, and the COO is often the leader best placed to link them.
The last requirement is fit. The best COOs complement their CEO’s strengths, and a COO hired in the CEO’s image adds little. Elad Gil, in the High Growth Handbook (2018), framed the COO as a complement to the founder: the founder keeps the work they do best, often product, and the COO takes on the rest of the business. Aaron Levie described Box’s answer in the same book: he kept strategy, product and brand, and the COO took people, organization and process. Box decided it needed one at 40 to 50 employees.
The arc in a growing company
In a scale-up, the COO is often the first senior executive who is not a founder. Earlier this year, Tomasz Tunguz described four types of startup COO, from a chief of staff who adds to the CEO’s capacity to an executive who runs the business day to day, each answering a different need.
Smaller and mid-sized companies need the arc too, though not always a full-time executive to carry it. A part-time, or fractional, COO can take on the work for a defined period: assessing operations, setting up planning and performance management, and leading one or two initiatives. Such a role works best when it starts with something tangible, such as a first set of dashboards that brings sales, marketing and finance into one view, built while the wider assessment runs. The company sees value early, and the COO learns the business through its numbers.
From strategy to results, and back
The COO title will keep meaning different things in different companies. The arc should not vary. Someone has to carry strategy into the work, align the organization around it and bring the results back into the next plan. Whether that person is a full-time executive, a fractional one or a CEO who has not yet hired either, the arc needs an owner.
Works cited
Bennett, Nathan, and Stephen A. Miles. “Second in Command: The Misunderstood Role of the Chief Operating Officer.” Harvard Business Review, May 2006, https://hbr.org/2006/05/second-in-command-the-misunderstood-role-of-the-chief-operating-officer.
Bossidy, Larry, and Ram Charan, with Charles Burck. Execution: The Discipline of Getting Things Done. Crown Business, 2002.
The Bridgespan Group. “COO Roles and Structures: Stories from the Field.” 15 January 2016, https://www.bridgespan.org/insights/coo-roles-and-structures-stories-from-the-field.
Cândido, Carlos J. F., and Sérgio P. Santos. “Strategy implementation: What is the failure rate?” Journal of Management & Organization, vol. 21, no. 2, 2015, pp. 237–262.
Economist Intelligence Unit. Why good strategies fail: Lessons for the C-suite. Project Management Institute, 2013, https://www.pmi.org/learning/thought-leadership/series/pmo/c-suite-failing-strategiy-lessons.
Ernst & Young (now EY). The DNA of the COO: Time to claim the spotlight. 2012; reissued by EY, 2014.
Gil, Elad. High Growth Handbook. Stripe Press, 2018.
Hambrick, Donald C., and Albert A. Cannella Jr. “CEOs who have COOs: contingency analysis of an unexplored structural form.” Strategic Management Journal, vol. 25, no. 10, 2004, pp. 959–979.
Mankins, Michael C., and Richard Steele. “Turning Great Strategy into Great Performance.” Harvard Business Review, July 2005, https://www.bain.com/insights/turning-great-strategy-into-great-performance/.
Marcel, Jeremy J. “Why top management team characteristics matter when employing a chief operating officer: a strategic contingency perspective.” Strategic Management Journal, vol. 30, no. 6, 2009, pp. 647–658.
Neilson, Gary L. “The Decline of the COO.” strategy+business, 4 May 2015, https://www.strategy-business.com/article/00328.
Spencer Stuart. CEO Transitions 2020. April 2021, https://www.spencerstuart.com/research-and-insight/ceo-transitions-2020.
Sull, Donald, Rebecca Homkes, and Charles Sull. “Why Strategy Execution Unravels, and What to Do About It.” Harvard Business Review, March 2015.
Tunguz, Tomasz. “The Four Types of Startup COOs.” 23 February 2021, https://www.tomtunguz.com/four-types-coo/.