The position of Chief Operating Officer (COO) in leading corporations is being transformed not eliminated according to a report released by The Conference Board, the global research and business membership organization.
The report, The Changing Role of the COO, is based on in-depth interviews with executives from companies representing diverse industries and a literature review. Executives surveyed include heads of human resources, regional heads, COOs, CEOs, heads of business unit, and heads of company research.
“The scope and intensity of leadership demands call for a team approach at the top,” says Dr. Robert J. Kramer, Principal Researcher at The Conference Board and author of the report with contributing author David Harper, founder and managing principal of The Advisory Alliance.
“Some companies are deciding that the composition of that corporate leadership team need not include a COO. Others are changing the duties for which a COO is responsible.”
The report finds that the need for and the definition of the COO role is determined by the relationship between the COO and CEO, including their personalities, in the context of the needs of the particular business. A risk assessment of the CEO “going it alone” and internal talent management considerations are also used for determination.
Some of those interviewed say that the COO position is evolving from the number two spot in a company to a leadership “on demand” role that changes focus with changing business strategy.
The report finds that companies – to grow more quickly in an increasingly competitive business world – are becoming flatter, with the CEO now going directly to the heads of lines of the business for answers.
HISTORY OF THE COO: The position of COO, though born sometime in the 19th century, reached its apex in the 1970s, when more and more prominent firms began adding the position to deal with greater management needs spurred on by increasing diversification.
Its popularity dwindled in the '80s, but was revived with the growth of the dot-com era, only to fall with the era's demise. Most recent studies indicate that only a small percentage of leading U.S. companies currently employ a COO.
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