To get a good understanding of why a given company has a COO and what the role is of the COO in a given company, it pays to start by thinking about the role of the CEO.
A CEO can be called on to do a lot of different things:
Communicating an inspiring vision and narrative
New business development
Board and investor relations
Defining and embodying company culture
Media and public relations
Hiring and managing an executive team
Scaling an organisation
Ensuring organisational alignment
Creating internal processes
Fighting organisational fires
This list is by no means comprehensive.
At a certain point it is no longer possible or optimal for the CEO to be directly responsible for all of these things, either because they don’t have the time for them all, or they’re not that good at them all, or both. At that point it often makes sense to split the role in two, with some responsibilities remaining with the CEO while others are passed over to a Chief Operating Officer.
Note that in some startups with multiple founders, one founder takes on the title of CEO while another calls themselves COO. Though there are no doubt exceptions, this is in many cases more a concession made so that everybody can have a “C-suite” title rather than a genuine COO.
There are of course many ways to carve up the pie, and no two COO roles are exactly alike. The seam that generally makes the most sense, though, is between the “big picture” and “execution”. The CEO is responsible for the big pieces of work that ensure the long-term success of the company (vision and strategy, capital raising, partnerships and BD) as well as being the external interface and avatar of the company to the Board, investors, media, and government. Meanwhile the COO ensures that at the heart of the company is a healthy organisation that is able to efficiently turn the vision into reality. This means leading internal communications, most day-to-day decision making, management of the executive team, dealing with the inevitable people and other fires, and—most importantly—putting the processes and norms in place that allow the organisation to execute and scale effectively.
In the case of a founder-CEO, a COO is often somebody with more experience managing and scaling large organisations. This skillset can be an excellent complement to the CEO’s vision, drive, and charisma.
A COO generally reports into the CEO, and is therefore accountable to the CEO. In practice though, CEO and COO generally operate more like a partnership (where the CEO is the more senior partner). It is of course paramount that there is a close working relationship between the CEO and COO, as there is enormous context that needs to be shared between the two for the partnership to be a success.
In terms of the areas of the company that a COO is responsible for, there is enormous variety. This will depend on the preferences of the CEO, the strengths of both the CEO and the COO, and the nature of the business. In my case, all functions in the company report to me with the exception of Finance. I know another COO where Finance does report to them, but Product reports directly to the CEO. Yet another COO is responsible for Product and Engineering, but not Sales. In some companies with a very complex Operations component, the COO is actually the Chief Operations Officer and has a slightly narrower remit that excludes product creation entirely.
I've framed the division of labour as being about long term vs. day-to-day. There are other lenses through which the division of labour can be viewed:
“Outside” (investors, capital, media etc.) vs. “Inside” (people and process)
Company (the entire corporate entity) vs. Organisation (the way the people are enabled to deliver results)
“What” vs. “How”
Strategy vs. Execution
The point isn’t that one of these delineations is more correct than the others, or that they are mutually exclusive. Rather, by understanding all of these different views, hopefully a picture begins to emerge about what makes a COO a COO.
Want to learn more? Don’t miss the next instalment: