By Stefano Maifreni, Founder of Eggcelerate
You have heard of the Chief Operating Officer (COO) before. But as a small business, do you need a COO? A COO can help take your small business to the next level by enabling your team to focus on their strengths and executing on strategic initiatives instead of being bogged down in operational details.
What is a COO?
The Chief Operating Officer (COO) is the executive team member responsible for managing the business’s people, culture, and processes. The COO is the number two position in the company and reports to the CEO. The COO is responsible for managing the company’s day-to-day operations and is almost like the CEO’s right-hand person.
As second-in-command, they act as a check and balance on the CEO and help operationalise the organisational strategy. They ensure the day-to-day operations run smoothly and profitably (e.g., supply chains, human resources, technology services, maintenance, accounting, sales, marketing) so executives can focus on company growth and expansion.
A COO can be the difference between a company that meets its goals and one that over-achieves.
Why is the COO role important?
The success of a company rides on its ability to execute its strategy. The COO leads the business’s operational side, ensuring that departments, teams, and individuals are trained, equipped, and ready to perform. COOs are responsible for driving consistency and standardisation across the organisation so that processes and policies are consistent and reliable. With increased competition, business models changing, and the introduction of new technologies, companies need to be able to respond quickly to market changes. COOs help companies respond to these challenges by creating a culture of innovation, encouraging experimentation, and empowering employees to develop ideas to solve problems and improve processes.
5 Signs You Need a COO
While all small business owners may need a COO, many don’t know it yet. Here are five signs that you may need a COO. If these are true for your business, you should look for ways to hire a COO or promote someone on your current team to this role.
- Slow Business Growth: if the business has plateaued or is growing slowly, it could be that you are neglecting some key processes. A COO can ensure that you meet your milestones, develop the right segments, and invest in the right areas.
- Too Many Fires to Put Out: you may feel like you are constantly putting out fires and can’t focus on what’s important. A COO can help to put out the fires and create a more predictable business.
- Lack of Employees’ Confidence: employees are your greatest asset, but they may not feel empowered to do their best at work. A COO can help create a culture that encourages growth and acknowledges strengths.
- Not Enough Time for Strategic Planning: you need to take time to plan for your future, but you can’t find the time. A COO can help you set your strategy and keep you on track.
- Your Business and Your Life Are Out of Balance: running a business is hard, but it doesn’t have to take over your life. A COO can help you get your life back and leave the company running smoothly without you.
3 Resolutions for Small Businesses Seeking a COO
- Understand the Role of the COO: First, it’s crucial to fully understand the role of the COO so that you know what to look for during the hiring process.
- Rethink Your Current Structure:You should also take a step back and re-evaluate your current structure and needs.
- Bring the Human Element Back to HR:Finally, you should bring the human element back to HR. Hiring a COO is just one way to focus on returning the human element to your business.
Key Benefits of Hiring a COO
Enable innovation and growth.
As organisations attempt to grow, they will hit roadblocks along the way. In some instances, those roadblocks will be external: a competitor may have come out with a new product or service that’s better than your own, or a sudden drop in the economy may threaten to stall growth. In other instances, the roadblocks will be internal: employees may be unable to handle the shift to a new product or service or the expected growth spurt. To help organisations grow, COOs must assess what’s currently working and what isn’t. They must also identify the organisation’s weaknesses and strengths. With that information, they can determine the best ways to address the company’s issues and capitalise on its strengths.
Manage risk and operational risk.
One of the COO’s primary roles is to manage risk. However, as organisations grow, so does the risk. That’s why COOs must actively manage operational risk. With operational risk, COOs must identify ways to reduce the risk associated with day-to-day operations. They must also implement risk management strategies and create contingency plans if things go wrong.
Ensure culture and employee engagement.
A company’s culture is a critical factor in determining its success. Unfortunately, cultures can be fickle, change over time, and be challenging to sustain. Culture is deeply ingrained in an organisation, takes time to build and evolve, and cannot be managed with a few edicts from the top. That’s why COOs must actively manage their organisations’ cultures. COOs can do this by using their authority and influence over employees to instilltheir values and expectations. They can also design reward systems and performance reviews to reinforce the culture they’re trying to create.
The COO and the CEO: why they get on well together
All C-suite roles are essential, but some are more important than others. CEOs take on a tremendous amount of responsibility daily and don’t have time to manage operations. CEOs must be strategic and visionary; they are responsible for setting company strategy and vision. That means they must think big picture.
They represent the company to investors, Customers, and all the stakeholders.
The COO plays a vital role in helping the CEO do their job by contributing to the big picture and the strategy and freeing the CEO time so that they can focus on their part and rest assured that the company runs smoothly. The role of the COO has evolved to become more strategic and less operational.
They must determine where the company will go in the future and how it will get there. They must identify what the company does well and where it has room for improvement. They must determine how to use the company’s resources at best to be profitable.
In other words, a COO enables the CEO to bring the strategy to life through its day-by-day culture and operations.
The role of the chief operating officer has evolved over the years. While they were once responsible only for day-to-day operations, they are now more strategic in nature.The most significant benefit of hiring a COO for your small business is that it enables you to bring more of your strengths to the table.
The COO can help define processes that keep your team and business running smoothly.COOs drive consistency and standardisation across the organisation so that departments, teams, and individuals are trained and equipped to execute.
They also play an essential role in helping companies respond to changing market conditions and new technologies. COOs can create a culture of innovation, encouraging experimentation and empowering employees to develop ideas to solve problems and improve processes. A COO can help to create a culture where people can flourish.