Because the role of top corporate leadership is evolving, the COO's job is becoming “situational.” “New demands from a company's external and internal customers affect the general management of the enterprise and, in turn, hold implications for the COO role,” says Harper.
“COOs of need to be flexible and adapt to changing demands set by customers and the CEO. As the complexity and pace of business increases, CEOs are relying more on a team than just one other top executive.”
External considerations that affect the COO role include: • Strong global, regional, and local competitors. • The increased power of customers. • Impatient institutional investors. • Talented managers who are ambitious and open to opportunities offered by others. • Global product overcapacity. • Increased regulatory oversight. • Relentless pressure to update, or even change, the company's fundamental business model.
The most pressing internal considerations are: the reduction of layers of management and emergence of numerous project-based formats; greater levels of investment in the IT infrastructure, which enable enhanced vertical and horizontal operations and communications processes; and an extensive use of alliances along with robust amounts of mergers and acquisition activity.
Some of the variations of the responsibilities of the COO as reported by executives interviewed include: • Oversight of a mix of various company operations. • Oversight of a mix of operations and functions. • Oversight of a mix of operations and functions, and acts as the organization's senior troubleshooter. • Engagement in a process of evolution from driving the operations of the company to sharing the overall leadership with the chairman and CEO and other top executives. • Responsibility for the alignment of operations and people behind the strategy to transform the company's technology, oversight of product development, and innovation, as well as the firm's cost structure and chair of the corporate committee that addresses key people-related issues.
The Conference Board report offers a three-step analysis process that companies can use when deciding whether they need a COO:
• Analyze your company's leadership and general management requirements in the context of your strategy and company culture – including the relationship between the CEO and COO. • Consider the central arguments in favor of and against the COO role in terms of your company's immediate goals and longer-term strategy. • Assume the COO role is unlikely to add value to the general management of the enterprise and build the strongest case to the contrary.
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