The COO Imperative: Will you define transformation or be defined by it?

Use your position to more actively build the strategic vision

Traditionally, the COO’s role was internally focused on operations and implementation, and the heavy lifting on strategy development was left to other members of the C-suite. Those days are over.

Disruptive forces, all accelerated in a post-pandemic world, have put your role at the intersection of functions essential to strategy definition. COOs have unique insights into customers. Customer relationships are increasingly technology-driven – from sensors in products to chatbots providing customer support. These digital interfaces give you highly current insights into customer wants and behaviors.

1. You control key analytics. In most industries, the majority of data is generated within the COO’s domain – production runs, customer fulfillment, product performance, and the like. Working with the CIO, CTO and the technology team gives you a deep data-driven perspective on the enterprise.
2. You control the operational heart of the organization. With oversight of flexible manufacturing and agile systems, you are in the driver’s seat in providing a strategic response to competitor moves or market shifts. 
3. You understand the risks. COOs are responsible for many of the cross-border activities of the firm, including in-bound supply chains and outbound exports. Your operations are highly exposed to geopolitical risk, trade barriers and sovereignty rules – which makes you a valuable contributor to strategic planning, especially around trade, a critical cornerstone of any sustainable growth strategy.

COOs should use their unique insights – in data, operations control, and in risk management – to step up and take a seat at the corporate strategy table. There is no going back – the COO is a key strategist for the enterprise.

Use digital operations to be proactively agile, not just responsive

Operational agility – switching out production runs, product co-design, configurable products – can sound like the dry talk of engineers. But this flexibility is the new foundation for the agile company’s competitive edge. 

Traditional manufacturing requires weeks to respond to a customer request. Retailers forecast four quarters ahead to create new lines and products. Financial services companies take years to install and offer new consumer products. These kinds of delays and capital requirements keep traditional COOs in a reactive role of responding to external forces, keeping up with rather than setting the pace.

But operational excellence can be used proactively as a competitive weapon. With agile mindsets and methodologies, you can make your company first to the market, with less expensive products that meet the customer’s specific needs. This is not just a shift in operations – it transforms you into a strategic market-maker. Here are three actions for COOs:

• Operate a direct feedback loop to customers – use new digital touchpoints to create build a real-time “pulse” of customers for rapid response.
• Mobilize digital operations and manufacturing to build rapid response – from expedited orders to custom production.
• Take an aggressive stance in managing volatility – use robotics and automation to scale with disrupted and unpredictable markets.

Building this level of connectivity and agility into operations may sound like a tech-focused approach, but conversely it enables COOs to deliver against a critical element of any sustainable growth strategy – to put humans, in this case customers, at the center of operations, so that every tech investment has a positive human outcome in mind.

Develop a resilient workforce and operating model

In a time of technology-driven change, it is sometimes forgotten that the real success factor in transformation is people. 

The COO’s people challenges come in two dimensions. The first are legacy organizational structures – often multi-layered and siloed – that are designed to support the legacy business but are badly out-of-sync with the new one.

The second challenge is the workforce itself. In many transitioning companies, employees can be fearful of displacement, resistant to change, and may not have the expertise and training for the new world. COOs should respond in three ways:

• Redesign the workforce – align a map of the future state with the people and skills necessary to support it. Then conduct a full assessment of current skill levels to create a “skills gap analysis” that defines a redesigned workforce. This is your roadmap for change and your key to successful collaboration with your HR and talent management colleagues.
• Motivate the workforce with a purpose-led vision of the future – today’s most valuable employees are not just working for a paycheck. They are motivated by career opportunity, personal responsibility, and long-term values of equity and sustainability. These goals need to be demonstrated as part of your transformation.
• Futureproof the workforce – as technology is driven into operations, you face a dual people challenge. First, you must compete with CIO colleagues and others for some of the scarcest talent in the world. Second, this workforce must be highly skilled in traditional industries – designing an autonomous car requires both digital skills and deep experience in automotive design.

For many COOs, the answer is upskilling or retraining of the existing workforce. In the near future, even now, your team needs to be managing trainers, curricula, and skills-building to elevate the workforce of tomorrow.