What does a COO do? – The role & responsibilities of a Chief Operating Officer
Who is a Chief Operating Officer?
The COO role is complex, spanning operations, finance, HR, and more. Essentially, the COO oversees day-to-day activities to ensure efficient business operations. This enables the CEO to focus on high-level strategy and planning.
While titles and duties vary across firms, COOs generally oversee:
- Daily Operations
- Budgeting
- Hiring and Staffing
- Performance Monitoring
- Resource Optimization
- Revenue Growth
The Role and Responsibilities of the COO
The COO is a true jack of all trades – spearheading daily operations, budgeting, HR, performance monitoring and more. By taking on this wide span of responsibilities, the COO enables the CEO to focus less on the present, and more on the future.
This partnership allows the pair to make decisions today that unlock long-term gains. With robust operations overseen by the COO, the company can scale smoothly and sustainably.
In 2022, 40% of leading companies had a COO, with financial and energy sectors leading at 48%.
Daily Operations Management
The COO role centers around directing daily operations spanning multiple departments. This includes overseeing teams, systems, and processes vital for execution.
For example, the COO may manage:
- Facilities and real estate planning
- Supply chain coordination
- Inventory and logistics monitoring
- IT infrastructure and systems
- Business operations and workflows
By handling day-to-day supervision, they enable the CEO to focus less on immediate fires, and more on high-level planning.
The COO role also involves identifying issues, bottlenecks, and risks that affect operations. This allows them to implement solutions to boost efficiency.
For instance, they may drive initiatives like:
- Automating workflows
- Streamlining supply chains
- Upgrading connectivity and hardware
- Improving inventory management
The oversight and enhancements a COO brings to the table helps build a well-oiled business machine.
Budget Oversight
The COO also plays a key financial oversight role. This includes planning, monitoring, and controlling budgets across units.
Their budgeting responsibilities can span:
- Annual budget creation
- Managing disbursements
- Analyzing variance and actual spend
- Allocating resources smartly
- Forecasting revisions
- Cost optimization
By coordinating cross-functional budgets, the COO looks at the big picture. This helps align spending with strategic goals.
The COO may also oversee accounting, A/R, A/P, and advise on financing options. These tasks ultimately help position the company for targeted growth.
Hiring and Staffing
The COO also often owns HR-related roles like talent acquisition and management.
Their hiring duties may encompass:
- Planning annual recruiting needs
- Defining hiring criteria and pay scales
- Overseeing recruiting and staffing
- Creating employee onboarding plans
Meanwhile, general HR oversight could include:
- Setting company culture and values
- Implementing training programs
- Conducting performance reviews
- Ensuring legal/regulatory compliance
By driving people operations, the COO helps build a motivated, productive workforce. One that can scale capabilities alongside growth.
Monitoring KPIs
To complement financial and HR efforts, the COO also tracks operating metrics. Key datapoints help quantify progress across objectives.
The COO may monitor success indicators like:
- Revenue and profitability KPIs
- Customer metrics like NPS and churn
- Supply chain efficiency stats
- Inventory analysis
- HR metrics spanning hiring velocity, turnover rate etc.
Routine tracking keeps senior leadership aware of dips or surges. This enables data-driven mitigation or investment steps.
Optimizing Resources
The COO also has to optimize the allocation and usage of company resources.
This can involve actions like:
- Evaluating asset needs – production equipment, facilities etc.
- Maximizing working capital efficiency
- Reducing waste through digitization
- Containing contingent labor spend
- Renegotiating vendor contracts
- Keeping IT security and infrastructure costs in check
Through smart allocation, they ensure resources match immediate and future needs. This allows departments to operate unconstrained despite growth.
Driving Revenue Expansion
While COOs focus heavily on operations, finance, and HR – they also facilitate revenue growth.
Expansion initiatives the COO oversees can include:
- Improving production capabilities
- Boosting marketing and sales capacity
- Enhancing customer experience
- Entering profitable adjacent markets
- Evaluating merger and acquisition targets
- Pursuing strategic partnerships
With day-to-day optimization freeing the CEO’s bandwidth, the duo can align on moves to drive profits.
Should you hire a COO?
What are some of the challenges that a COO faces?
The COO position is critical and faces many challenges as the company grows. Common challenges for COOs include:
- Operational Efficiency: Ensuring smooth and efficient day-to-day operations.
- Strategic Planning: Aligning operational strategies with overall business objectives.
- Technology Integration: Adopting and integrating new technologies for improved efficiency.
- Risk Management: Identifying and mitigating operational risks.
- Talent Management: Recruiting, retaining, and developing a skilled workforce.
- Cost Control: Managing and optimizing operational costs.
- Regulatory Compliance: Staying abreast of and adhering to industry regulations.
- Supply Chain Management: Ensuring a resilient and efficient supply chain.
The August 2023 Pulse Survey by PwC shows some of the challenges addressed by COOs.
How do you become a COO? What are some key skills required?
Some key skills that a COO needs include strong leadership skills, analytical skills, and problem-solving skills.
The COO must be able to lead the company’s employees and inspire them to work towards the company’s goals.
Additionally, the COO must be able to analyze data and make decisions that will benefit the company.
Finally, the COO must be able to solve problems that may arise.
Here are the required skills.
- Around 10 years of extensive experience in operations preferably within the same industry.
- Additional certifications in business operations & project management (nice to have)
- Five years of management experience.
- A bachelor’s degree (preferably B.Tech) and preferably a master’s degree, preferably an MBA
- Exceptional executive presence, business acumen, and presentation skills.
- Demonstrated skill in advanced excel and a strong orientation towards managing by process.
- Understanding of business functions such as Delivery, Human Resources, Operational Functions, Business Administration, Finance, Sales, marketing, etc.
- Experience in fundraising from VCs is a plus.
- Working knowledge of data analysis and performance/operation metrics
Actionable Quiz: Are You Ready to Be a COO?
If you’re an entrepreneur considering hiring a COO or stepping into the role yourself, ask yourself these questions:
- Are you comfortable managing day-to-day operations across multiple departments?
- Can you oversee budgeting and financial planning for different business units?
- Are you equipped to drive recruiting, hiring, onboarding and culture building?
- Do you have experience tracking KPIs across functions to inform executive decisions?
- Are you able to optimize resource allocation – assets, working capital, staff etc.?
- Do you have bandwidth to facilitate revenue-driving initiatives alongside internal operations?
- Does a heavy focus on execution and operations fit your strengths more than high-level strategy?
- Are you excited by the challenge to coordinate many moving parts in service of scale?
- Would you thrive on opportunities to boost efficiency and build organizational muscle?
- Would you relish partnering with a visionary CEO as yin to your yang?
If you answered “yes” at least 7 times, a COO role could be a great fit! Ready to translate tactical skills into strategic growth.
Scoring: 7-8 Yes Answers = Emerging COO Potential 9-10 Yes Answers = Clear Fit for a COO Role
COO vs Chief Executive Officer and the COO-CEO relationship
The roles of CEO and COO are often confused, as both positions are responsible for the day-to-day operations of a company.
- The COO works closely with the CEO However, there are some key differences between the two jobs.
- A CEO is typically responsible for setting the overall strategy and vision for the company, while a COO is responsible for ensuring that this vision is executed effectively.
- CEOs are also responsible for raising capital, managing investors and representing the company in board meetings. While COOs are typically more focused on the operational side of things.
- Ultimately, the CEO is responsible for the overall success of the company, while the COO is responsible for making sure that everything runs smoothly on a day-to-day basis.
COO salary
The COO reports to the CEO and typically draws a lower salary compared to the CEO.
A chief marketing officer (CMO) is a corporate executive responsible for planning and executing marketing initiatives.
The CMO position is typically one of the most senior roles in a company, and CMOs are often involved in setting strategy and direction for the entire organization. As such, CMOs are typically very well-compensated.
The average salary of a CMO in the US is around $250,000 per year and in India is around $50,000. However, salaries can vary widely depending on factors such as experience, industry, and geographic location.
For example, CMOs in the tech industry tend to earn higher salaries than those in other industries, due to the competitive nature of the market.
Salaries also depend on the stage of the company. Bootstrapped startups generally pay a lower salary compared to high-growth startups and industry tech leaders who pay really well.
Who are the COOs of some of the leading companies?
Sheryl Sandberg – Ex COO, Meta
Sheryl Sandberg is the COO of Meta Platforms and the founder of LeanIn.Org. In June 2012, she was elected to Facebook’s board of directors, becoming the first woman to serve on its board. Prior to joining Facebook as its COO, Sandberg was vice president of global online sales and operations at Google.
In 2012, she was named one of the most influential people in the world by Time magazine. She has an MBA from the Harvard Business School.
Sandberg is leaving Meta in the fall, but she will continue to serve on the company’s board. Zuckerberg also said that Javier Olivan, who oversees key functions at Meta’s four main apps — Facebook, Instagram, WhatsApp and Messenger — will serve as Meta’s new COO.
Jeff Williams – COO, Apple
Jeff Williams is a top executive at Apple. He works under CEO Tim Cook and is responsible for the company’s worldwide operations, customer care and support, as well as its design team and the software and hardware engineering for the Apple Watch. Jeff has also been a driving force behind Apple’s health initiatives, developing innovative technologies and pushing medical research forward.
Jeff has worked at Apple since 1998. Starting as the head of Worldwide Procurement, he has since led worldwide operations for all products including the development of the Apple Watch. Jeff’s work was crucial in Apple’s entry into the mobile phone industry with the debut of iPhone.
Jeff worked at IBM from 1985 to 1998. He has a bachelor’s degree in Mechanical Engineering from North Carolina State University and an MBA from Duke University.
Greg Peters – Chief Product Officer & COO, Netflix
Greg Peters is COO and Chief Product Officer. He leads the product team, which designs and builds the Netflix experience. Greg was previously International Development Officer for Netflix, responsible for partnerships with consumer electronics companies, Internet service providers, and multi-channel video programming distributors that allow Netflix to deliver movies and TV shows across devices and platforms.
Before joining Netflix in 2008, Greg was the senior vice president of consumer electronics for Macrovision Solutions Corp. (later renamed to Rovi Corporation). He also worked at digital entertainment software provider Mediabolic Inc., Red Hat Network, and Wine.com.
Greg holds a degree in physics and astronomy from Yale University.
Vanessa Papas – COO, Bytedance
Vanessa is currently the Chief Operating Officer of TikTok globally. She oversees the content, marketing, product, and operations teams for the video platform.
She used to be in charge of research and trends for YouTube creators as well as audience development and creative strategy. Her goal was to help creators grow their channels and get more people using YouTube.
Before this, Vanessa was the Global Head of Audience Development for YouTube. In this role, she developed strategies to help build loyalty for creators and their content. She also worked closely with YouTube’s core product, marketing, strategy, and content teams to create the YouTube Creator Playbook. This resource has been used by over 20 million creators.
Vanessa was Vice President of Programming and Audience Development at Next New Networks. She helped the company get more views on their videos. In March 2011, Next New Networks was acquired by YouTube/Google.
Vanessa has a lot of experience with strategy and development, online media, education, and commercial production. She has two Masters degrees in Media from the New School and the University of Queensland.
Dan Shapera – COO, Linkedin
Dan Shapero is the Chief Operating Officer at LinkedIn. He helps companies grow their business and build winning teams through LinkedIn’s value. In this role, he oversees global sales, operations, as well as member and customer success. Since joining LinkedIn in 2008, Dan has held various leadership roles managing global teams across sales and product management.
Before joining LinkedIn, Dan was a management consultant at Bain & Company and a startup entrepreneur.
Dan has an MBA from Harvard Business School, and a BS in Applied Mathematics from Johns Hopkins.
TL;DR
A COO oversees day-to-day business operations, enabling the CEO to focus on high-level planning. Though roles vary, COOs generally manage:
- Daily workflows across departments
- Budget creation and cost optimization
- Talent recruitment, development and culture
- Performance monitoring using KPI dashboards
- Resource allocation and utilization
- Revenue driving initiatives
By coordinating these administrative and operational responsibilities, the COO keeps the organizational engine humming. This allows the CEO bandwidth to strategize with the COO on future growth moves.
The piece explains each COO duty in depth – from supply chain fixes to hiring velocity analytics. It aims to demystify this complex role balancing tactical execution and strategic input.
Added quizzes allow readers to self-assess COO readiness, and help entrepreneurs identify needs gaps indicating it’s time to hire an operations-focused executive.
In short, an effective COO-CEO partnership blends strong day-to-day operations management with visionary growth leadership.
If you enjoyed reading this post, check out our other posts on our blog and also take business assessments to ensure that your company is moving towards success.
We hope that this article has provided you with some valuable insights into what it takes to be a successful CEO. Here are some other related articles that cover topics related to building the right startup team.
- The ideal CEO and their roles & responsibilities
- How to find the right tech cofounder or Chief Technology Officer (CTO) for your organization
- Why do you need a Chief Marketing Officer and how to hire one?
- Why every business needs a Chief Productivity Officer?
- How to find a co-founder for your startup business?
- Assembling the ideal startup team
- How to build a tech startup team?
Are there any other areas you would like us to cover? Let us know.
