Researchers Demystify Role of COO in New Book

Chief operating officers are something of a mystery. Second in command, they are typically responsible for day-to-day delivery of business results, but their role can vary widely from company to company, causing confusion over COOs' value, according to a new book.

"There is no agreed-upon description of what the job entails or even what it's called," says Nate Bennett, a Georgia Tech professor of organizational behavior who is co-author, with Stephen Miles, of Riding Shotgun: The Role of the COO (due June 19 from Stanford University Press) and an article in Harvard Business Review's May issue on the same subject.

Another challenge, in addition to defining the COO role, is determining whether the position is headed for extinction or making a comeback, say Bennett and Miles, a partner of Heidrick & Struggles Leadership Consulting. Although they cite one 2004 study showing that the number of firms with COOs had declined 22 percent over the previous decade, the authors have seen recent evidence that corporate demand for the position is growing.

While some firms have declined to fill vacated COO spots, instead dividing the job's duties among other top managers, many companies in a wide range of industries have announced new COOs in recent years, including Microsoft, RadioShack, Airbus, Allstate, Alcatel, Chiron, Nissan, Comcast, Eli Lilly, Apple, and Medtronic.

"We can easily argue that there is a growing need for the role," says Miles, listing such reasons as the widening scope of CEO responsibilities and the increasing desire of boards to identify heirs to the top spot. Bennett adds: "In light of these trends, it's surprising that COOs are not more common. Our suspicion is that they would be if there were less variability and confusion surrounding the role."

Aiming to shed light on a job largely neglected by scholars and the business press, Bennett and Miles extensively researched what makes a successful COO and why companies might want to add the position. Their book, Riding Shotgun, features in-depth interviews with numerous executives, including Motorola's Ed Zander, eBay's Maynard Webb, Starbucks's Jim Donald, and PepsiCo's Steve Reinemund.

Finding that COO duties tend to vary greatly because companies adapt the job to meet the needs of particular CEOs, Bennett and Miles identify seven major types of second bananas: 1) the executor, who implements strategies, enabling the CEO to be more externally focused; 2) the change agent, charged with leading major reorganizations, turnarounds, or other strategic imperatives; 3) the mentor, brought on board to help a young or inexperienced CEO; 4) the other half, whose strengths complement the CEO's; 5) the partner, for CEOs who work best in that kind of relationship; 6) the heir apparent, groomed to take over one day; and 7) the MVP, promoted because he or she is too valuable to lose to a competitor.

"The tremendous variation in COO roles and responsibilities manifestly implies that there is no standard set of 'great COO' attributes'." write Bennett and Miles in the Harvard Business Review, noting that the most critical factor for success is a high level of trust between the CEO and COO. "The CEO must feel certain that the COO shares his vision, is not gunning for the top spot, and can get the job done."

Of potential interest to any manager climbing the ladder, both the journal article and Riding Shotgun are intended as resources to help CEOs and COOs collaborate more effectively. While COOs must keep their egos in check, CEOs should find ways to share the spotlight, the authors note. Frequent communication and a clear division of responsibility between the two are also crucial, they write.

According to the authors, reluctance to add a number-two executive can sometimes be detrimental to both the company and CEO. They argue, for example, that ousted Hewlett Packard CEO Carly Fiorina should have hired a COO to help ease the company's complicated merger with Compaq.

"Understanding what makes for a successful chief operating officer is vital because the effectiveness of COOs is critical to the fortunes of many companies - and could be to many more," Bennett says.

Writer: Brad Dixon, College of Management