Chief executive officer - chief operating officer (CEO-COO) duos have been around for a few decades. Also known as chief executive-managing director duos, until recently COOs have not received much attention from management academics, the business-financial press or others outside the company. The spotlight remained firmly on the external-facing chief executive. There is now growing interest in this crucial yet largely externally-low-profile role which has been called the toughest job in the company.

A COO can be known by a variety of other official and unofficial job titles such as number two, deputy executive director, chief of staff, president, executive vice-president or senior vice president.

Continental Airlines CEO Gordon Bethune, who joined Continental as COO, passed the torch in December 2004 to his own COO Larry Kellner. Currently there is no “COO” but there is a “president” who is responsible for sales and marketing, human resources and labour relations, technology, corporate communications, global real estate and security, federal affairs, and international, state and civic affairs…

There is a growing need for the COO role. Today's large, complex, dynamic global enterprises often require a visionary and charismatic outward-facing CEO. There is an increasing need to pay attention to the external environment and longer-term strategic direction. CEOs are increasingly public, celebrity and ambassadorial figures spending most of their time communicating with stakeholders and constituencies.

At the same time, companies need someone who can devote sufficient time to overseeing the actual operations of the company. This is especially crucial in operationally intensive, acquisition-led, and/or hyper-competitive and dynamic sectors such as airlines, automotive or high-tech. The COO role fits the bill.

A typical reporting structure: all business units and some staff/support units eg IT or procurement report to COO. The COO and most staff functions eg finance and public affairs report to the CEO.

As with CEOs but even more so, there is no standard set of 'great COO' attributes. There is tremendous variation in the types of people, their backgrounds and expertise and a disparity of roles and responsibilities in terms of eg spans of control and decision-making power. This holds true across companies and within companies over time. The COO role can be a rich mix of guidance, consultation and direction with multiple roles including one or more of:

• Be the inside 'head down' here-and-now person. This enables the CEO who is the outside 'head up' person to concentrate on more strategic, longer-term bigger-picture issues.
• Control operations, as it says on the tin. Day-to-day, quarter-to-quarter responsibility for all areas of operations and project management eg production, marketing, sales, R&D, facilities management, call-centre management and outsourced functions.
• Make CEO's vision a reality. Action. Execute strategies. Coordinate and coach reports. Keep all units or departments moving towards a common goal. Spend time talking, meeting and in discussions with other senior executives, managers and employees. Listen to varied points of view and arguments. Find common ground. Build consensus between and across the organisation.
• Act as the CEO's number two Deputise eg when CEO on holiday.
• Complement the CEO. Act as a foil to the CEO's experience, skills, style, knowledge, penchants. Act as a calm, self-effacing balance to a brilliant but intimidating leader.
• Be a change agent. Similar to an internal consultant role, the CEO parachutes someone in to deal with a key issue such as turning around an ailing company.
• Mentor a younger, less experienced CEO. Sometimes a seasoned executive is brought in to work with a founder who is technically brilliant but unlearned in leadership.
• Mentor, develop and coach senior executives reporting to the COO.
• Keep a valued top executive on board. Prevent or forestall poaching or jumping ship by promoting and bestowing the title on a key senior person.
• Successor for CEO. Sometimes a COO is being groomed or tested as a CEO heir-apparent. A good way to weed out those who don't make the grade in practice.

The current CEO of AMD Hector de J. Ruiz joined AMD in 2000 as COO to the founder CEO W.J. Sanders. Ruiz achieved the daunting task of becoming CEO and successor to the founder in 2002. He is now working with his own COO who is an 11-year veteran of AMD.

Deciding to have a COO role in an organisation is a major structural choice fraught with dangers. For example putting in place a CEO-COO duo:

• explicitly divides between two people a set of top-level roles previously filled by one person.
• draws a distinction between strategy formulation and implementation.
• adds an organisational layer: makes the CEO even more remote from direct leadership.
• adds another highly paid executive to the organisation's costs.
• disrupts established reporting relationships
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All top corporate jobs are in some sense patronage or situational. The COO even more so. The success of the person and the role is highly dependent upon the dynamics of the CEO-COO relationship. There must be good personal chemistry and mutual support between the two.

Factors for a successful CEO-COO duo include:

• Commitment to cooperation by both the CEO and COO. The COO role will only work if an effective CEO-COO partnership develops. A high level of trust must be built and maintained. Rivalry, competition, development of factions or rival camps (think Blair-Brown) must be minimised. The 1-2 partnership must be able to withstand wedge-driving politics. Otherwise, whilst one person may 'win', it may prove ultimately destructive for the company.
• Emotional compatibility. Hiring a COO when the CEO is in place is fraught with even more difficulties than other senior appointments. Emotions must be acknowledged
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• Clear boundaries and decision rights. Clear guidance from CEO which is agreed by COO on autonomy and power-sharing. Agree explicit and reasonable demarcation lines and division of labour between CEO and COO at the outset.. Review regularly
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• COO is aligned with the CEO's vision. Shared agenda. The COO must embrace the CEO's strategy and make it real
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• Effective CEO-COO communication. This electronic age enables effective remote communication. Even so there is sometimes still no substitute for in-person CEO-COO interaction -- not just about business performance and vision but eg about process and emotional issues. This can help keep channels open and minimise misunderstandings. Sometimes a third party eg joint coach or mentor may help
.
• Locking the back door. Especially if the COO is a new role, executives who previously had direct access to CEO will now have an intermediary. The CEO must support COO in developing relationships with direct reports and discourage them from going around the COO to the CEO
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• The COO maintains balance between being a self-confident leader and controlling their ego, maintaining humility and staying out of the limelight. COO may not receive credit for job well done immediately or at all
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• Begin to share the spotlight. The COO's contributions may be less visible, especially externally, than those of the CEO. The CEO should make key stakeholders aware of the COO's achievements. This takes a CEO willing to acknowledge to the board and shareholders. Otherwise there may be rumblings of why does the job exist, waste of money, duplication of roles and the like
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• Ongoing support for the COO from the CEO and the board. Otherwise the role is unlikely to add value even if perceived by others eg top team in the organisation to be doing an effective job
.

There are contradictory arguments on the effectiveness of CEO-COO duos, but not much research or evidence to confirm. Is the COO the key to improved performance or not missed when they are gone? Has the lack of a COO contributed to a decline in company performance? Is the role headed for extinction…or is it on the way up? Is it more effective and less costly to simply have key department or unit heads reporting directly to the chief executive?

There are plenty of reappointments when the serving COO is promoted to CEO or leaves eg Sony; Guardian Media Group. Sometimes when a COO departs, their responsibilities are divided amongst other top managers eg when Steve Heyer left Coca Cola. Other times the role is revitalised after several years of non-use eg in Microsoft. New COO roles have been created in last few years at RadioShack, Airbus, Allstate, KPMG, Alcatel, Eli Lilly, Medtronic, Fujitsu, Volvo (subsidiary of GM), Lucent, Lexar and MTV.

At the end of the day, whether packaged as a partnership, collaboration, joint leaders and the like, the buck stops with the CEO. True senior management co-leadership, aka the 'two in a box' as envisaged by Heenan and Bennis back in 1999 is still extremely rare. A future BestofBiz briefing will look at this still embryonic concept of co-leaders at the top eg joint chief executives.


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Contact: Sue Watt, Editor, BestofBiz.com