The role of the Chief Operating Officer (COO) has evolved significantly in recent years and has gained relevance in the corporate structure. On the other hand, the COO's functions are also transforming. We review the 5 key skills a COO needs to succeed in 2023.
The role of the Chief Operating Officer (COO) has become increasingly relevant as technology has made its way into companies and business digitalization has become a reality. A decade ago, the vast majority of companies still lacked a COO. However, Mckinsey reports that in 2022, 40% of leading companies had a Chief Operating Officer (COO).
Likewise, the role and functions of the COO has also changed over time. While his role used to be limited to managing operations and executing strategies commissioned by CEOs; now his role has evolved to become the main catalyst for business growth driven by technology, digitization, strategic expansion and employee technology empowerment.
COOs have become key players in generating value within an organization. The journey from their roots in the back-office to acquiring a leading role can be understood by the transcendence of new technologies, business intelligence, data strategies, data analytics and the need for companies to transform their data assets into valuable insights through data processing.
On the other hand, increased responsibility also translates into greater challenges.
McKinsey has found that already in 2022, many COOs find it difficult to allocate their time appropriately: only 33.33% of their time is dedicated to long-term strategic planning. The rest of their time is spent supervising staff and dealing with current operational priorities.
Other major challenges facing COOs today include:
- Management of workforce's specific needs
- Growing number of shareholders
- Rapid increase in automation
On the other hand, the role of the COO will continue to evolve in 2023.
In this scenario, it is critical for COOs to prepare themselves to achieve the skills that will be demanded of them in 2023 and the years to come. According to the McKinsey survey, the majority of CEOs believe that COOs should be better equipped to address the challenges that the future holds for them.
Let's take a look at what skills an operations manager needs to succeed in 2023.
Top 5 Key Skills of a Chief Operating Officer (COO) For 2023
1. Greater capacity to adapt to change
It has been a long time since operating environments were stable and companies could carry out bi-weekly operating plans. Today, operating environments are much more susceptible to change. Therefore, it is critical for COOs to be able to anticipate the environment in which they operate and have high adaptability to change.
Being ahead of market trends and other trends or contextual factors can be a major competitive advantage.
What to do to avoid being left behind?
- Be informed about the latest technology trends and new products and tools that are appearing in the market.
2. More collaboration in strategic activities
Another important point for a successful COO going forward is to forge greater synergy between the various business units and for the COO to take part in functions beyond his/her department.
Particularly relevant is the COO's collaboration with the marketing and sales departments. It is now important for a COO to be aware of the value proposition offered to the customer and the resources required for customer operations and customer strategies to be fulfilled.
Customer expectations now go beyond one department and involve the entire company. Greater collaboration between operations, marketing and sales can improve the customer experience and increase customer satisfaction.
3. Leadership skills and direct participation in important decisions
An efficient COO must have leadership skills to be able to guide his team and to participate directly in data-driven business decision making. Direct communication with the CEO and the creation of synergies between all managers is essential for a company to move towards the achievement of defined objectives with all stakeholders working in the same direction.
As data-driven decisions gain relevance, the COO's role in business decision making becomes more important.
According to one of the executives interviewed by McKinsey: "The COO role should not be considered second level [...] The COO is among the most complex roles in the organization in terms of agendas and interests."
Today, the COO plays a key role in problem solving, as well as being primarily responsible for guiding the organization toward innovation and optimizing resources and increasing productivity through new technologies, infrastructures and tools.
4. Promoting operational efficiency at a cultural and technological level
In today's fast-moving environment, achieving operational excellence is much more difficult than in the past. Due to supply chain disruptions, political and environmental uncertainty and radical job changes, it is essential for operations managers to be agile and responsive.
One of the fundamental functions of a Chief Operating Officer is operational monitoring and performance evaluation.
The COO of the future is a professional profile that proactively manages the company's inertia and is open to disruption to drive innovation and growth. He or she is also in charge of fostering a technological and data-driven culture within the business environment. On the other hand, he/she must be able to understand the routines and priorities of other middle managers in order to meet their technological and operational needs.
According to experts, mistakes should be a Chief Operating Officer's greatest inspiration. Mistakes are the best opportunity to learn from what went wrong and to identify what doesn't work.
5. A creative talent management
The world of work has changed considerably in the wake of the global pandemic caused by Covid-19. Operations managers must strive to adapt to the demands of the new labor market in order to find and retain talent.
One of the main difficulties in attracting and retaining operations talent is that it is a less attractive and historically valued field than other corporate sectors.
In this sense, an efficient COO must work to provide a pleasant working environment, meet the demands of employees, ensure diversity and equality in the workplace and create a desirable corporate culture.
At the talent retention level, one of the COO's main objectives for 2023 must be to demonstrate the relevance of this area within the organization and propose professional growth opportunities to avoid letting talent slip away.
The chief operating officer or COO has regained relevance in the general management of companies due to the technological and data-driven development in the business sector. The new roles and responsibilities of the COO require COOs to acquire new competencies to be able to perform the tasks that their role will demand from 2023 onwards.