A chief operating officer is often described as being in charge of everything and nothing at the same time because of the general nature of the job. Without managing a specific department, a COO operates in much the same way as a company president and sometimes holds that title. A COO is part of the executive management team and is one of the highest-ranking employees at a company.
Chain of Command
The title "chief operating officer" refers to the position’s control over the day-to-day operations of the business. Although management structures vary according to the company, the COO typically reports to the chief executive officer and president, if more than one person holds those titles. In situations where the company does not have a chief executive officer or president on site, the COO serves as the top executive in their absence. If there is a dispute between two department managers, the COO steps in to help formulate a solution.
A COO is usually heavily involved in developing strategic management initiatives. This can include offering input on decisions regarding expansion, acquisitions, cost-containment, debt reduction, staff downsizing or the consolidation of multiple locations. This work is usually done as part of an executive management team. The COO will meet with department heads to discuss the feasibility of the executive team’s strategic initiatives and report back to the team.
Working with department heads, a COO will review individual department plans for the upcoming year, including sales or production goals, budgets, staffing and any structural changes to a department. Department heads develop and submit their quotas, goals and budgets to the COO. They also meet one-on-one with the COO to discuss, modify and finalize their plans. The COO must ensure that each department’s goals and spending fit in with the company’s overall plans and budget.
After a business sets its strategic goals and its department heads create their plans to help achieve these goals, the COO is responsible for monitoring and tracking the progress of all areas of the business. He does this through weekly department head meetings or reports and through reviews of sales, production and financial reports. A COO might also work closely with a chief financial officer to understand the company’s financial position at all times. The two will review a variety of documents – including budgets, cash flow statements, balance sheets, debt information, receivables aging reports and income statements – to determine how best to use the company's resources.