When it comes to COO hiring, you may have heard rumors that the role is changing and, in some cases, is being hybridized with other C-suite roles. As Deloitte studied the changing roles of COOs in the insurance industry, it concluded a COO’s vision and propensity to adapt to change are now top differentiators.
CFO Dive reports the gradual disappearance of the COO position altogether. In other cases, COO hybrids are emerging, particularly in combination with CFOs. “To increase efficiency, companies across industries have begun supplanting their COOs with an operationally focused CFO,” the outlet reports.
And then there’s the growing technical aspect of COO responsibilities. Take a look at these top strategic priorities for COOs outlined by enterprise software company Unit4: AI and chatbots, advances in automation, cloud transformations, software integrations, cybersecurity, and more. CFOs are focused on technology, too. Between 2016 and 2021, the share of finance leaders who say that they are responsible for their companies’ digital activities has tripled.
Given these shifts, should employers rethink their COO hiring strategies? We asked a few of our executive recruiting and executive consulting leaders their thoughts on these changes in COO hiring. Below is a Q&A to help inform your own conclusions.
What advice do you have for companies regarding the future of their COO vs. CFO roles?
“Although there are growing similarities between the two roles, there will still be differences and aligning staff/resources to complement the strengths and weaknesses of the individual (if combined into one role) would be imperative,” says Dave Benjamin, Practice Director-Professional Services at The HT Group. “While COO’s may not have as detailed training in the financials/GL side, they’ll have more visibility in growth-creation/sales, people operations, and related areas that CFOs don’t always bring to the table.”
“As I look at the list of executives whose careers we have been following, we see several that have jumped into combined roles of COO and CFO. Generally, they lead companies under $25M in revenue and have a solid financial background,” adds Sam Wood, The HT Group’s Director of Consulting Services.
With COOs and CFOs focused more on technology, how is the CTO role affected?
Wood suggests that the sector—and therefore the executive structure—is the determining factor. “If the company’s innovation for products exists in manufacturing, as an example, the CTO and/or CIO positions frequently report under the CFO, and technology is treated as a cost center,” he explains. “If, however, the product is technology, the CTO/CIO usually reports to the CEO. A CFO’s job is to drive costs down to improve profitability, and innovation can be difficult when the first constraint is always cost.”
Benjamin adds that a combined role can be effective here, too, but, in comparison to a traditional CTO, “there may be an array of ‘blind spots’ (development, security, etc.) that a dual-role exec may not have the appropriate experience for.”
What do you recommend employers look for in C-Suite candidates given these evolving roles?
The consensus among our sources is to value a wide range of experiences in C-suite candidates—don’t arbitrarily narrow the list of attributes you seek.
“We see excellent executive candidates get passed over because they may have had a job sector pivot within their career. Diverse sector experience brings additional strength into an organization as it leverages that experience,” Wood advises.
“Employers should look for candidates with diverse skills and experiences who truly want to be entrenched in all facets of the business,” Benjamin says, adding that it’s also essential to understand such an executive wearing multiple hats will need to rely on team members with deeper experience in certain areas. “I would recommend caution in making assumptions that a blended resource will have full expertise in multiple areas and to be prepared to buffer with people and technology to enable their success.”
To better pivot when it comes to COO hiring, you may want to work with an advisor or consider a fractional or interim COO with the help of The HT Group consulting services. For permanent hires, it’s crucial to weigh your needs against these changing parameters and then use experienced executive recruiters who know how to assess, source, recruit, screen, and hire a COO who fits your vision.