The Rise and Inevitable fall of the role of the COO

Back at the start of the 1980’s one of the least glamorous and under rated executive roles was that of the Chief Operating Officer.   The COOs of the 60’s and ‘70’s were the typically hard-nosed ex-engineers (almost always men) who were tasked with keeping the production lines running and the Unions in check.   Then along comes the computer and the world of work changes and the role of the COO is transformed – the rise has begun.

During the ‘80’s, at the dawn of “Thatcher’s Britain”, as the most technical of the Board functions, the COO is given the task of “overseeing” what this new technology (under the care of the newly emerging CIO function) is capable of doing.  In many cases IT and Ops merge and the COO finds themselves responsible for a growing empire as the newly unleashed computing power enables organisations to centralise, computerise and rationalise previously siloed functions.    Interestingly it is usually the “neutral” operations division that ends up managing the slimmed down entity as a central function providing service back to the divisions.

During the ‘90’s, as the breadth and depth of the “shared services” delivered by the COO functions grows, so too does the COOs power at Board level.   Now a major “owner” of resources the COO has the power to drastically influence the cost base and the overall P&L.  He (yes he is still a man) has become important.

During the ‘00’s, the ever increasing capabilities of web based technology opens up a yet greater world of possibilities for the COO.  Global sourcing is on the agenda and by the end of the decade the typical COO is poised magnificently over a global empire of efficient shared services providing support to the now very slim-line and somewhat denuded divisions.  No-one is now surprised when a COO is appointed CEO and even the CFO believes they have a powerful rival for the top spot.

However, if I may make a prediction, I suspect history will dictate that this current decade is the zenith for the power of the COO.  For whilst it has been technology that has been responsible for creating their empire it is inevitably the new digital technologies that will take it apart too.  Ironically just as the first wave of computing muscle bought the direct control of resources into the COO function the new digital wave will take them away again.  The availability of services from the cloud, the availability of “utility like” capabilities from outsourced providers and the ever present requirement to find lower cost alternatives will inevitably lead to a radical shrinking of the COO functions as the role of the COO changes from being that of master controller to that of master co-ordinator.

The “teens” will see the rise of COO’s who are capable of dismantling their own empires – focussing on the ability to scope, procure and manage the necessary operational services from outside the four walls of their own businesses and capable of coping with the subsequent reduction in their own power base.

Of course I could be wrong, and as of now the COO’s are more powerful than they have ever been and are still hoovering up organisational functions and responsibilities – but it won’t do us any harm to remind ourselves that what goes up will inevitably come down.

Is there a future for consultancy as we know it? - Re engineering the Advice Giving Industry – 1

In my blog of Tuesday, 31 May 2011 (see archive for details) I shared my personal conviction that the management consulting business model will be radically changed by “digitisation”.  Since then I have been keeping tabs on a number of “digital consulting solutions” in an attempt to spot trends and understand the developing market.  What I am learning is challenging me to deconstruct and rethink the processes for requesting and providing advice.   This short blog is the first in a series that will examine the future for the advice giving industry.

So first up, the big question is, should all consultants sleep safely in their beds and ignore the impact of the new digital capabilities?  Absolutely not.  Why?  Because of the growing wave of new digital service providers who are looking to link up those in need of advice or support with those capable of providing it.  These new providers are developing some unique and compelling propositions that could spell the beginning of the end for some of the traditional cosy consulting models by offering a potentially better quality of advice at a better price point than can be gained through the standard "request for proposal" avenues.  

New Models include:

1.       Ask your own digital network – (facebook, twitter, linkedin, google+ etc) – cheap as chips and can provide some good answers if the question is simple enough and straight forward enough e.g. – “Does anyone know of a good tool for doing process mapping?” – if your network is big enough the “wisdom of crowds” concept can come into play.  The challenge is being able to articulate a simple enough question - not as easy as it seems.

2.       Ask a specialist advice giving site – these come in a wide variety of shapes and sizes from the brilliant and addictive fivesquids http://www.fivesquids.co.uk/ where people will provide you with all manner of advice and services for just £5 to the much more sensible Know How Mart http://www.knowhowmart.com/ which hooks up business executives who want to chat through a challenge with a relevant global expert.  It’s a kind of cross between ebay and match.com. Sites such as Know How Mart are generally better able to provide better advice when the problem is ill defined and in need of refinement.   The big advantage of these sites is that they can make use of global experts who are keen to work on a portfolio basis rather than full-time.

Now the intriguing thing about these models is that through the use of digital media clients can now  access truly global experts and purchase their “expertise” in micro packets of time.  I can’t believe that this won’t become an increasingly popular way of purchasing advice giving services over the next 5 austere years.  So, going back to the big question, "how will the traditional consulting companies (who run the risk of being disintermediated by these new sites) respond?"  Watch this space

More in the next blog

Alex Matthews – Delivering an exceptional customer experience - 10 Reflections from 35 years of listening to customers.

      Just before Christmas, Alex Matthews (customer experience guru for HSBC, M&S and many others) decided to change the pace of his working life and stepped down from HSBC to pursue a portfolio of consulting projects.  Having spent the last 3 years getting to know Alex really well I can say without doubt that when he talks on the topic of “the customer” it’s time to sit up and take notes.  I am therefore delighted that Alex has been good enough to share with me his collected wisdom from 35 years of listening to customers and working to deliver an exceptional customer experience.  Collated below are his top 10 reflections for business leaders looking to get the customer experience spot on.

1.  Know Thy Customer – And I mean KNOW

A recent study showed that on any given day the front line were aware of 100% of the customers’ issues... the average UK CEO at the time could name only 4% of them.   The smart CEOs seek out real (as opposed to stage managed) opportunities to get in their stores, branches, call centres etc and actually talk to and serve their customers.  There is no substitute for this.

2. Know the difference between what the Customer Wants and what the Customer Expects

There are always elements of any product or service that customers just expect and there are some that can absolutely delight them.  Being able to distinguish between the “everyday” elements that tend to drive “satisfaction” and the handful of “wow” elements that enable a business to truly differentiate itself is essential. It enables the business to put its energy and resources into being better only where the customer needs it to be great. Don’t try and beat the competition on the everyday stuff.  It’s OK to be as good as the best of the rest on the everyday stuff.

3. Understand exactly how the customer makes you money

Understanding that whilst the overall interaction and impression the customer has of the organisation is important it is often how the customer is dealt with at one or two “moments of truth” that will determine the customers’ loyalty and advocacy.  Being able to identify what parts of the interaction you have with your customer are truly the “moments of truth” and then aligning your resources to deliver a phenomenal customer experience is essential to maintaining a profitable relationship with your customers

4. The BIG things are often the little things

The “wow” aspects of the customer experience, whilst not always easy to identify are often the easiest to implement by the individual e.g. acknowledging a customer by name, smiling at a customer and saying thank you to a customer in their own words; little things yes but the hardest things for the organisation to implement.  It requires a lot of effort to be expended on developing the culture of the organisation to the point where the “little things” are natural.

5. Talk about customers.  About what they would think, not what we think of them

Does the leadership at all levels, but especially the top, have conversations about customers?  Not high level strategic presentations about customer segment migration (important though these are) but just plain simple conversations. They might be about last week’s complaints or about last week’s store visits (M&S ‘s board would all be in stores at the weekend and those comments would form the early part of the Monday board meeting. Tesco used to have an empty chair at its trading meetings to represent the customer and what she, yes she, might think about what ever was being talked about).

6. It’s about people!

The most important cog in the machine is the person you speak to. I know, I know we can all have wonderful digital lives now but businesses that treat their employees as real human beings tend to find those human beings transferring that feeling to customers.  Are staff required to use a script or are they trusted to use their judgement? Are they empowered to make a decision on your behalf or does it have to go to a higher authority? Does the employee look like they enjoy being there??? Old fashioned stuff I know but amazing how often that really is all you need to know!!

7. Look after the middle managers

And of course there is now oodles of research to prove that happy employees deliver a better customer experience and the biggest factor in the creation of happy employees is the quality of their middle managers. They are the biggest influence on how those who serve customers feel about their life at work. How are branch managers, team leaders, etc assessed? Are those who get promoted the best examples of the brand values and are they rewarded on their ability to performance manage?  In Disney 50% of a leaders’ performance rating is generated by how they bring the Disney values to life... as judged by their direct reports!!

8. Make it easy

Customers don’t want complicated.  Life’s too busy for that already.  Numerous channels, numerous products, loads of small print…  Over the years, we’ve managed to make it all so complicated.  Customers just want it to work.  There has to be a cost and profit component to what we do, but we also need to ensure that it’s easy to use and easy to buy.  Metro and other new entrants are picking up on that, and building simplicity into their business.  The chef Gordon Ramsay is a stickler for a trimmed back menu at all his establishments – learn to think like Gordon

9. Bring the customer in – live transparently

The beauty (and horror) of our digital age is that the customers will be inside our organisations whether we like it or not – the smarter businesses have learnt that trying to keep them at arms’ length is pointless and have thrown wide the doors to invite them into improve all manner of processes including sales and service, product design, ethics and compliance, complaints handling and organisational governance.

10. Now and again, let people err on behalf of the customer

The people who interact with your customers, for all intents and purposes, tend to be the most junior in the business.  Yet it is what they do that wins or loses those customers.  You need to give clear guidelines and support for what decisions they can make – but in the end it’s their decision and they won’t always get it right.  Accept it.