By Nathan Bennett
Chief operating officers (COOs) are too stoic to admit it, but their job, the toughest in the c-suite, has only gotten tougher. In our recent refresh and re-release of Riding Shotgun: The Role of COO, Stephen A. Miles and I outline the wide range of factors changing business, and with it, the demands on the COO. Such factors include fallout from the last global recession, a renewed interest in governance, operational risks posed by natural disasters and terrorism, the rise of big data and the changing talent pool.
Each factor is significant, undeniable and unavoidable. And each factor requires COOs to develop and demonstrate new competencies, to think differently about risk and to become increasingly quick and agile in order to effectively lead operations. Here, I offer some insight into two of these forces, the renewed emphasis on governance and the rise of big data.
A positive trend through the past decade has been stronger interest in corporate governance. We’ve seen a resurgence of the activist investor largely over concerns about leadership’s ability to deftly manage through the recession. Not coincidentally, boards have become much more active and hands-on. Consequently, board chairs have become much more involved in ways that free up time on the chief executive officer’s (CEO) calendar. CEOs have, in turn, used this time to increase their involvement in daily operations.
At first glance, this engagement of the CEO with the business seems encouraging. However, many organizations are actually creating a succession risk by allowing the “newfound time” on the CEO’s calendar to dispense with the COO.
Most CEO successors come from the inside. When the successor is internal, no role comes close to COO as a reliable source for well-qualified candidates. This should be no surprise. The COO role provides a great testing ground for a potential CEO. In an environment that seems to only accelerate, the removal of the COO position – even if the CEO thinks he or she has the bandwidth to take on COO responsibilities – creates a succession risk.
A second force, the rise of big data, will compel every company to be a technology company. Leaders who do not adapt their companies to the ramifications of this reconfiguration will be at a great disadvantage. Big data changes power relationships in an organization. No longer does expertise or reputation for judgment rule the day.
Instead, access to massive amounts of data and the ability to intelligently manipulate and glean insight from it become the prized skills. COOs are increasingly expected to show greater depth of understanding in technology and the manipulation and interpretation of massive volumes of data. In fact, it would not be surprising to see the COO of the not-too-distant future coming from a career inside the technology function. Without sufficient technological savvy it will be difficult to hire the best people, to make the best decisions around operations and so on.
The changes businesses have experienced over the past 10 years require COOs to develop a new set of tools. Without the ability to understand and leverage big data, without an increased sensitivity to the challenges associated with global operations and without a highly sophisticated approach to understanding risk, COOs will not be able to provide leadership, to achieve strategic objectives and help organizations succeed. The work we did with COOs in writing “Riding Shotgun” provides a clear agenda for developing and leveraging the COO role.
Bennett is associate dean for program innovation at the J. Mack Robinson College of Business of Georgia State University. Read more about him at http://robinson.gsu.edu/profile/nathan-bennett/.