Chief Operating Officer - The bridge between strategy and execution

The role of the Chief Operating Officer has evolved since the turn of this century. Due to increasing globalization and frequent disruptions, achieving operational excellence in today’s times is increasingly challenging. At the same time, the role of the CEO has also expanded to dealing with external stakeholders like the media and regulatory bodies, due to which the ‘second in command’, the COO, is responsible not only for the day-to-day operations of the organization but also for long-term strategic planning, change management, and organizational resilience

Successful COOs thoroughly understand the key performance indicators of a business, interacting with cross-functional teams to drive performance and achieve targets. They are also more often than not key to succession planning and business continuity. In 2023, 27% of Fortune 500 CEOs were promoted from their roles as Chief Operating Officers

The rise of Fractional CMOs

Startups, SMB’s, and organizations in transition work on tight budgets in comparison with established brands. Their day-to-day operations are led by the CEO, in addition to a management team that handles specific functions. The presence of a full-time COO requires a higher spend on remuneration and benefits while essentially duplicating some of the roles and responsibilities of a CEO or management team on a full-time basis. This poses a conundrum to many organizations, wherein the role of a COO is essential, but not as a permanent employee

Hiring a fractional COO is a strategic approach where companies hire an experienced COO on a part-time, project-based assignment, giving businesses an opportunity to engage a proven professional to optimize operations, streamline processes, and identify areas for improvement. They bring a fresh perspective to the ‘current state of operations’, are hands-on in their approach to solving issues, and aim for quick wins in short spells while building for the future. Simply put, businesses can engage a highly experienced COO at a fraction of the cost and commitment

Interim vs Fractional COO

When companies make the decision to bring a COO on a part-time basis, it is very important to define the nature of engagement; whether it is a project-specific role or does it require perennial strategic oversight and operations management. A fractional COO, as discussed above, is embedded into an organization’s structure, albeit in a part-time capacity over a continued period. An interim COO, on the other hand, is more project-specific, time-bound, and is usually hired during periods of transition, acquisition, and company restructuring. High-growth organizations with a future demand for a full-time COO would do well to hire a fractional COO, as they are deeply integrated into the business over time, making them a natural fit for a full-time COO

Points to consider while hiring a fractional COO

A highly experienced and results-oriented leader with a proven track record of driving operational efficiency, enhancing business processes, and nurturing organizational growth would be an ideal candidate as your part-time COO. In addition to a candidate’s qualifications, the management needs to define the key responsibilities clearly to determine the time and level of commitment needed. Familiarity with industry-specific trends and challenges would be an added advantage, so would a holistic understanding of key functions/departments of an organization

References

1. Cornwall, Jeffrey R., David O. Vang, and Jean M. Hartman. 2019. Entrepreneurial Financial Management: An Applied Approach. N.p.: Taylor & Francis.
2. Piasecki, Darryl. 2022. “The role of the chief operating officer.” McKinsey.https://www.mckinsey.com/capabilities/operations/our-insights/stepping-up-what-coo will-need-to-succeed-in-2023-and-beyond.
3. Rothwell, William J., and Robert K. Prescott, eds. 2022. Succession Planning for Small and Family Businesses: Navigating Successful Transitions. Milton Park: Taylor & Francis