The Evolving Role of the COO To Navigate The New Normal

Nov 28, 2023 | COO Insights

As companies adapt to the challenges of the 21st century, the COO has emerged as a key figure for organizations. They are critical players for steering companies through disruption and driving strategic innovation.

In 2023 and beyond, the role of a COO is far from the traditional confines of operational efficiency and process optimization. While the primary objectives of ensuring smooth operations, strategizing for productivity, and collaborating with the C-suite remain, the scope and challenges have expanded significantly.

The Economic Research Firm anticipates a remarkable 16% increase in the salary of COOs by 2025. As a result, the average expected earnings are expected to rise to $340,372 per annum. This financial projection reflects the growing importance of the COO role. In this article, we will take a closer look at how the role of COOs is evolving, and the changes they are expected to focus on in the coming years.

Redefining COO Responsibilities

The pandemic and the associated disruptions have rewritten the job description for today’s COOs. Their roles are no longer solely confined to internal operations. They now encompass a broader set of responsibilities that touch upon areas such as supply chain management, sustainability, cybersecurity, and workforce development.

Remote Workforce Dynamics

The surge in remote work, fueled by the COVID-19 pandemic, is among the most significant changes impacting the COO’s role. According to Pew Research, a large proportion of remote workers prefer to continue working remotely, signaling a long-lasting transformation in work patterns.

In this context, COOs are confronted with the task of ensuring operational efficiency while managing a geographically dispersed workforce. The scope of their responsibilities has expanded to include a closer collaboration with Chief Human Resources Officers (CHROs), focusing on salary adjustments, employee well-being, and the complexities of hybrid and remote workforces.

The Role of Communication

An essential trait for the modern COO is effective communication. The distributed nature of work necessitates seamless and consistent communication across the organization. Modern COOs are driving communication through various channels, from video conferencing to messaging apps and in-person interactions, fostering a dynamic company culture.

Characteristics of a Modern COO

  1. Adaptability: The modern COO must be highly adaptable, ready to move swiftly in response to changing technologies, consumer behaviors, and workforce requirements. This adaptability extends to operational strategies and innovation to navigate uncharted territory.
  2. Hospitality: In the context of a COO’s role, hospitality involves understanding the needs of the entire team. Empathy and engagement are crucial for implementing new policies or processes effectively.
  3. Good Communication: Effective communication, through a mix of channels, is critical. It ensures that a remote or hybrid workforce remains closely connected, maintaining an agile company culture.

Enhancing Supply Chain Visibility: A Top Priority

The business-pace is now faster than ever. A transaction or merger that would normally take months or weeks is now just a matter of hours. As a result, enhancing supply chain visibility has emerged as a critical priority for Chief Operating Officers (COOs).

With the complexities of global markets, uncertainties such as the recent pandemic, and ever-evolving customer demands, maintaining a resilient and transparent supply chain is essential. As revealed by EY’s 2022 survey, this emphasis on supply chain visibility isn’t new.

It’s been a top priority for supply chain executives since at least 2019. The economic uncertainty and business recoveries in 2023 and 2024 have further underlined the enduring importance of this issue.  However, the survey also points out that while this is a priority, only about four in 10 respondents (37%) have witnessed improvements in visibility.

This shows highlights several challenges that COOs are facing in their pursuit of enhanced transparency. However, in response to these challenges, COOs are now investing in a spectrum of technologies and strategies.

These include adopting control towers, supply chain analytics, and digital twins of their supply chain to gain a more comprehensive view of their operations.

These tools not only offer better visibility but also provide real-time insights, allowing COOs to identify potential disruptions and respond swiftly. Such measures contribute to the overarching goal of streamlining supply chains, making them more resilient in the face of unexpected changes.

Leading the Charge on Sustainability

2023 was the third warmest year to date, registering a 0.43°C average increase throughout the year. As a result, sustainability has transcended buzzword status and become a core objective for organizations. COOs are now playing an instrumental role in driving sustainability initiatives within their organizations.

This extends to:

  • Reducing carbon emissions,
  • Adopting circular business models, and
  • Ensuring compliance with evolving environmental regulations.

It’s observed that 72% of enterprises are actively working on reducing the water intensity of their operations. This reflects a clear commitment to sustainability and the recognition that ecological responsibility isn’t just ethical but also advantageous from a business perspective.

Moreover, it also shows the increasing importance of ESG (Environmental, Social, Governance) considerations – something that COOs must integrate in business’ day-to-day activities. Consumers and investors alike are scrutinizing companies for their sustainability practices, which encompass reducing material waste, adopting renewable energy sources, and designing products with recyclability in mind.

For COOs, this implies an obligation not only to meet regulatory requirements but to authentically integrate sustainability into their organizations’ DNA.

Building Resilience for Future Challenges

2022 and 2023 marked the start of an era defined by ongoing disruption. As a result, the otherwise undervalued role of COOs has been highlighted to be a critical on. They are now relied on for taking proactive measures to fortify their organizations against a multitude of threats.

One of the standout findings from EY’s research is that 53% of industrial companies that have nearshored or re-shored operations in the last 24 months. This indicates a substantial shift in supply chain strategy, driven by a necessity to enhance resilience. COOs have realized the importance of having alternate sourcing strategies in place to avoid bottlenecks and delays in the face of unexpected events.

Stress-testing techniques are also part of this strategy. They are designed to enabling organizations to assess their vulnerability to different scenarios. The ever-present risk of disruptions, whether from natural disasters, geopolitical events, or even cybersecurity threats, necessitates that COOs prepare for uncertainty.

It’s all part of a broader focus on enhancing supply chain resiliency, ensuring products are available where and when they are needed.

Digital Tools & Revenue Generation

Disruptions in every business aspect has meant a new, tech-infused landscape. As a result, COOs are embracing digital tools not only to streamline operations but also to open new revenue streams. Implementing digital capabilities, including advanced artificial intelligence (AI) and innovative applications, has the potential to:

  • Reduce forecasting errors,
  • Optimize production, and
  • Improve procurement processes.

This translates to not only cost savings but also the potential for generating new revenue streams.

For COOs, the role has evolved to encompass identifying innovative technologies. They not only help improve the core functions of the business but also open doors to entirely new markets and products. This means that a COO’s mandate now extends beyond operations optimization into driving business model innovation.

The Roadmap for Transformation Programs

Constructing a successful transformation program is a multidimensional process that involves several key steps. The first step in any transformation program is self-assessment. COOs have begun reviewing their organization’s design and identify opportunities for differentiation.

This often entails stress-testing the resiliency of the existing operating model, assessing the current talent pool, and pinpointing any potential gaps in capabilities. These insights allow COOs to prioritize their transformation plans and initiate the necessary changes.

It’s worth noting that operational transformation is an ongoing journey, especially considering the evolving landscape of potential disruptions. Cyber threats, natural disasters, new regulations, and uncertain economic conditions necessitate a continuous process of adaptation.

Advanced digital tools play a key role in this endeavor, allowing COOs to respond rapidly to these challenges and turn potential disasters into opportunities. With a successful transformation program, organizations position themselves for long-term success. The results often extend beyond immediate cost savings and efficiency improvements. They provide a solid foundation for seizing opportunities and maintaining a competitive edge while rivals grapple with missed deadlines and opportunities.


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