Why Chief Operating Officers are becoming Performance Directors
As COO imagine you're running a more agile, efficient operation capable of anticipating external events and pivoting quickly to avoid harm. Imagine you can do this while matching workload with on-demand intelligence to reduce cost and flex resources based on variable customer demand. And imagine doing this within a working environment that emphasises health and wellbeing with a range of flexible benefits that ensure your people grow with the company. You’ve become the ultimate performance director.
“Get (way) better at anticipating change. Upheaval is now the norm—both globally and locally. Companies, and their operations leads, need to be prepared for any disruptive event, no matter how far-fetched. To do this, COOs need to have their fingers on the pulse of the marketplace—one COO in a specialty chemicals company told us the ideal COO will have had a few years’ experience in a role that interfaces with the market.”
– McKinsey & Company ‘Why do Organizations have COOs?’
These are some of new challenges and opportunities now facing COO's as highlighted in the recent McKinsey article "Why do organizations have COOs?" published in December 2023. They're still expected to optimise company assets and processes to deliver outcomes as efficiently as possible and are increasingly being given responsibility for championing culture, contributing to (and challenging) strategy and building in resilience to cope with variation in demand and business interruptions. On top of that, they're now being asked to figure out how to create and manage dynamic teams comprised of permanent employees and those brought in to address specific, short-term activities (intelligence-on-demand). So what's driving this role transformation?
As you'd expect it's a combination of factors but perhaps the most compelling is the demand for a healthier working environment and how this needs to be combined with operational excellence and owned by a senior leader. The focus is shifting from what you do to how you do it. Pandemic, disruptive technologies and automation have changed employees expectations regarding how they want to work and the terms under which they operate. Flexible working hours, job sharing, access to mental and physical wellbeing services are just a few examples. There's also the growing trend toward portfolio careers, working on a fractional basis for multiple companies. The COO is expected to navigate through these emerging trends to continue to deliver healthy business outcomes through a healthier working environment. This is becoming known as the wholistic enterprise - the addition of the letter 'w' being deliberate to indicate the delicate balance between desired wealth (for companies and individuals) and health.
The wholistic enterprise and its' impact on organisational design, culture and working practices is a subject we'll revisit in future articles.
“Manage talent creatively. In the wake of the pandemic, COOs are confronting a new set of talent-related challenges. It’s up to them to provide pleasant working conditions, meet employee needs, ensure diversity and equity in the workplace, and create an appealing corporate culture.”
– McKinsey & Company ‘Why do Organizations have COOs?’
A discovery mindset can uncover breakthrough actions and opportunities as it frees thinking from bias and constraints imposed by existing practices.