From service “scapegoats” to strategy partners: the evolving role of the (European) COO

Although the role of chief operating officer (COO) is relatively new in Europe (in contrast, for example, to North America and the UK), it is now becoming more established across all industries in the Eurozone. This is in no small part due to the strong credibility which COOs have built by focusing on efficiencies which have helped businesses meet their profit margin goals. In a declining market with limited cash flow, COOs have been instrumental in many cases in driving growth by cutting costs, enhancing efficiency and creating teams across the organization.

This article considers the findings of a multi-method study on European COOs incorporating interviews with COOs and other C-suite executives. The study looks at the many aspects of the COO role. For example, there were instances of COOs taking the initiative at board level to streamline strategies, such as restructuring leadership and other measures, producing enhanced results. The study also looked at the set of managerial capabilities needed to fulfill the role. For example, COOs must be able to deal with the unexpected, such as events which can have a huge impact on operations. They need to be able to react to new competition and change cost structures within their organization.

"The COO has currently to take up all the stuff that the others don’t like to do. And in a bank those are typical back-office functions which are perceived not as sexy as some of the front-office responsibility. But, having fulfilled some of these functions now for years, I cannot really subscribe to that because I think they are as sexy as any other business in the world. All depends on the attitude."

COO
large European financial service provider

The creation and the design of the COO’s role indicates high diversity within companies, from operational excellence to strategic enablement. There are some internal as well as external factors that have contributed to the rise of COOs in Europe. The internal drivers include a shift in core tasks, competencies or priorities, such as quality, or optimizing the span of control at board level. External factors, which have influenced the increase in the number of COOs, comprise challenging customer demands, fierce competition and compliance with regulatory requirements.

The article proposes a number of “lessons learned” which will be of interest to potential COOs, CEOs and other board members, plus external stakeholders. These include recommendations on communicating successes, leveraging internal knowledge and reinforcing existing skill sets within the organization. However, despite long-term loyalty, the study suggests there is still limited recognition of the role in Europe. Currently, it seems that staying at one firm and helping to establish the COO position is perhaps the most viable way of securing a COO role. Overall, the findings of the study clearly show the role of the COO would benefit from further research as it continues to evolve and expand within Europe and globally.

The complete article was written by:

  • Gunjan Bhardwaj
    Former manager in the Advisory Practice, Ernst & Young, Germany
  • Andreas Bissinger
    Researcher in the Department of Innovation Management and Entrepreneurship at EBS Business School, Germany
  • Prof. Dr. Andreas Eisingerich
    Assistant professor of Marketing at Imperial College Business School, London
  • Prof. Dr. Florian Täube
    Assistant professor in the Department of Innovation Management and Entrepreneurship at EBS Business School, Germany

Download the full article pdf (pdf, 212 kb)

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