What Is a COO? Understanding the Role of the Chief Operating Officer

It usually reports to the Chief Operating Officer (CEO) and is responsible for handling the day-to-day operation and execution of business strategy. A COO, however, has a broader scope, overseeing the entire company’s operations. COOs and other chief executives work in every type of business, from small to large, with few employees or thousands of employees.

In this case, the COO might carry out the CEO’s mandate by instructing the human resources department to hire more quality control personnel. The COO may also initiate the rollout of new product lines, and may likewise be responsible for production, research and development, and marketing. After gaining valuable experience at Microsoft and LinkedIn, Clemens became COO of Pandora in 2014.

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Though he did not have the title of COO (he was vice chair), he did the job of COO and was Dell’s mentor and right-hand man. The problems of the company were due to rapid growth that it could just not keep up with. coo acronym business It had a planned launch of notebook computers that was eventually stopped because of poor production planning. At the time, the company didn’t know what product lines its profits and losses were coming from. They both are tasked with participating in daily management activities to keep the company running smoothly.

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The first foundational principle of direct-cost optimization is simply to avoid overpaying. Activities typically include negotiating better rates and terms with existing suppliers, qualifying new vendors, optimizing sourcing strategies, and leveraging economies of scale with strategic suppliers. In tandem, the company can also reduce costs (as well as its carbon footprint), by adopting energy- or water-efficiency measures or by redesigning packaging.

• And when the resolution of the problem requires specific skills, he or she mobilises the relevant skills in-house.
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• This hands-on approach not only ensures that your operations are built to last but also leaves your team with the skills and knowledge they need to continue driving efficiency and growth long after the program ends.
• In essence, the COO translates strategic plans into actionable steps and ensures that all departments are aligned and working efficiently toward the company’s objectives.

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Their work often involves a high degree of stress because they bear the responsibility of making the business successful. That means leaders are typically promoted or appointed into the position from within the company. That certainly doesn’t mean you won’t see or have the opportunity to apply for external chief officer position roles, but it is an important practice to be aware of if you have aspirations to become a COO. In 2021, the average base salary of a chief operating officer was $145,467 per year, though this figure can vary depending on the company and the experience level of the candidate.

Also known as the Director of Operations (DOP ), he/she ensures on a daily basis that the teams are able to carry out their missions and achieve their objectives successfully. Discover 18 alternatives to Asana in 2025, with tests, reviews and criteria for choosing the best project management software for your needs. Curious about how we approach operations and want a glimpse of the thorough, strategic methods we use? Our Essential Business Operations Toolkit offers a hands-on introduction to the systems and processes that define our work.

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• As such, COOs tend to be employed by the largest organizations, essentially freeing up time for the CEO to focus on long-term business strategies and challenges rather than operations.
• This strategic management position, along with the CEO, CMO and CTO, is akin to an operational orchestra conductor.
• In a similar vein to the COO, the title of corporate president as a separate position (as opposed to being combined with a “C-suite” designation, such as “president and CEO” or “president and COO”) is also loosely defined.
• A Chief Operating Officer (COO) is a senior executive responsible for overseeing the daily operations of a business.

The company had been performing well until about 1993 when business started to flounder. In 1999, Lane received a salary of $1 million and a $2.25 million bonus. He was also given 1.125 million in stock options, at the time valued between $11.8 million and $30 million. According to him, because the people providing the professional service were experts on the product, the company could charge a high price for it, resulting in a high margin. Keep in mind that the role of a COO may vary from company to company according to each firm’s needs. In this article, learn about what a COO does and how one can uniquely contribute to the success of your company.

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This included opening a new park in Hong Kong as well as the opening of Disney’s California Adventure right next to Disneyland in Anaheim, California. When the CEO position eventually opened up in 2005, Iger seemed like a natural choice to helm the company. The Innovator is one of the types of COOs who embraces new ideas and strategies. They’re often the first to try something revolutionary and were often brought on specifically for that reason.

Innovative COOs are the ones who usually bring about big changes in the company, often out of necessity. When companies need to change course or turn things around, The Innovator is the type to get the job done. The type of COO who believes in getting things done on a day-to-day timeline may be seen as more of a manager. Most COOs want to be involved in the details, but this type is one that goes even further than that. They’re able to break things down into more manageable parts and communicate what needs to get done on a monthly, weekly, daily, or even hourly basis. Some might look at this type as a micromanager, but they make sure to keep things organized and under control no matter the circumstance.

Roles and functions

A new company will have very different needs than a company that has been around for 100 years and has a large market share in its industry. Depending on the company, its needs, its cycle stage, and its unique characteristics, the specific type of COO required to help it realize its goals will vary. Consequently, COOs often design operations strategies, communicate policies to employees, and help human resources (HR) build core teams. In many cases, a COO is specifically chosen to complement the skill sets of the sitting CEO.

While CEOs may get most of the spotlight, COOs can still be a major force for successful companies. The following are a few examples of COOs who have made an impact in their role. They work closely with newer team members as they guide them through the first few months and help them acclimate to the organization. Think of this type of COO as a mentor, someone who will take others in the company under their wing. This article was edited by Christian Johnson, an executive editor in the Washington, DC, office. A wealth of experience as COO gives you all the knowledge and skills you need to succeed the CEO and take on this role with brio.