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.