The Many Types of Chief Operating Officers

If your company is thinking about recruiting a COO, you are not alone. Estimates show that US companies employ nearly 70,000 Chief Operating Officers in 2022.

Yet, not all COOs are created equal. The role originated to serve as second-in-command to the Chief Executive Officer (CEO). Today, there are many different reasons companies hire COOs.

You may think your company needs a new senior employee but not a COO. We are bringing you this guide to show you why you could be wrong. We will break down the nine types of COOs to help you identify your needs.

Are you ready to learn more about Chief Operating Officers and how they can benefit your business? Then check out this in-depth guide for absolutely everything you need to know.

What Is a Chief Operating Officer (COO)?

COOs hold the highest operational positions at their companies. They do not work with a single department, instead overseeing all of a company’s divisions.

If a company has an operations department, those employees directly report to the COO. The COO reports to the CEO as he or she is the only person in the company who holds a higher position.

Exactly how a COO’s role plays out depends on the company’s needs. We will go into full detail on the types of Chief Operating Officers in a moment. But first, we are clearing up some frequently asked questions about COOs.

A Brief History of the Executive Suite

The Chief Operating Officer role as it is today originates from the 1950s. The mid-20th century birthed the corporate executive suite (AKA the c-suite). Alongside CEOs and CFOs, COOs were among the members of early c-suites.

Today, c-level roles have expanded to include:

• Chief Marketing Officer (CMO)
• Chief Technology Officer (CTO)
• Chief Information Officer (CIO) or Chief Data Officer (CDO)
• Chief Security Officer (CSO)
• Chief Compliance Officer (CCO)
• Chief Human Resources Officer (CHRO) or Chief Human Resources Manager (CHRM)
• Chief Analytics Officer (CAO)
• Chief Revenue Officer (CRO)
• Chief Journey Officer (CJO) or Chief Experience Officer (CXO)

You can learn more about the origins and evolution of the COO role in this guide.

COO vs. CEO

Chief Executive Officer is the highest position one can hold at a company. A CEO is often the face of the company and may serve as Chairman or President of the Board of Directors, though this is changing. They drive the long-term strategy and create a pivot point from which the entire company can turn.

COOs, on the other hand, are often the CEO’s second-in-command. Unlike CEOs, operational leads may get into the day-to-day business, managing teams of senior executives.

COO vs. CFO

The Chief Financial Officer’s role is to take care of company-wide finances. Finances include financial planning and analysis (FP&A), financial reporting, and tracking cash flow.

In some sense, COOs and CFOs differ in their scope. For example, COOs get into the weeds of daily operations, while CFOs use daily financial data to make long-term decisions.

COO Qualifications

Companies hire COOs for many reasons. That is why qualifications for operations leads vary so much. In general, though, here are the top qualities companies look for:

• A Strategic Mindset: COOs may not need to be as strategic of thinkers as CEOs, but they need to understand business strategy enough to keep long-term goals in mind while working on short-term projects
• Congeniality: COOs usually work cross-departmentally, meaning they need to get along with most people, especially the CEO to whom they report to
• Multitasking Ability: Working across departments also requires the ability to juggle multiple tasks that stretch across different areas of expertise
• Willingness to Get in the Trenches: COOs are highly involved in a business’s daily operations, requiring a willingness to get their hands dirty

The most important qualification for an aspiring COO is management experience. That is why many people earn their Master’s in Business Administration before striving for this role.

Yet, you may be surprised to hear that only 24% of COOs have an advanced degree (i.e., a Master’s or Doctorate). The vast majority of COOs (65%) only holds a Bachelor’s degree, while 7% only have an Associate’s degree.

Before we move on, we want to make a quick note on foreign languages. After all, 32% of employers report the need for bilingual employees. And 56% of employers think demand will increase over the next five years.

COOs who speak a second language are most likely to speak Spanish (40%). French (14%), German (8.5%), Chinese (5%), and Mandarin (5%) are the second-most common languages spoken by bilingual COOs.

COO Demographics

Companies are starting to pay more attention to demographics in the workplace. Diversity, Equity, and Inclusion (DEI) initiatives have made a push for more diverse workplaces. And the COO role is no different.

Here are some statistics breaking down the demographics of operations leads in the US:

• The majority of COOs are men at 76.6%, which is down from 81% in 2010
• Only 23.4% of COOs are women
• The average age of a COO in the US is 52.2 years, and 90% of US COOs are older than 40 years
• Only 10% of COOs are 30–40 years old, and 0% of US COOs are in the 20–30 age group
• The majority of COOs are white (81.9%), which is only down 1.1% from 2010
• 6.6% and 6.5% of US COOs, respectively, are of Latin and Asian descent
• Only 3% of COOs in the US are Black or African American, and less than 1% of US COOs have a Native American background
• A growing number of COOs identify as LGBTQ+ at 12%
• The majority of COOs work in coastal cities in California, Florida, Washington, and New York
• COOs are also highly employed in large metro areas like Chicago, IL; Austin, Houston, and Dallas, TX; Atlanta, GA; and Phoenix, AZ

Like most roles, COOs are predominately white males. However, as you can see above, this fact is slowly changing.

How Much Do CEOs Get Paid in 2022?

One of the most common questions regarding COOs is: how much do Chief Operating Officers get paid?

The starting salary for a COO is over $100,000 per year. The average wage for all US COOs is $175,471 per year. However, the top 10% of COO earners bring in more than $293,000 per year.

It is also important to consider pay disparities. For example, female COOs earned 10% less than their male counterparts in 2021. The average male COO earned $184,995, while the average female COO earned only $166,501.

There is also a pay disparity when it comes to COOs’ race and ethnic background. White COOs earn an average of $180,925 per year and Asian COOs earn $175,495. Black, African American, and Latino COOs earn the lowest salaries at just over $173,000 annually.

As with any position, the level of education also has an impact on a COO’s salary. COOs with advanced degrees (Master’s or Doctorate) can earn an average salary of over $200k per year. Meanwhile, COOs with Bachelor’s and Associate’s degrees earn $185k and $146k, respectively.

Finally, the state and city where a COO works can impact his or her pay. States in the northeast of the US (e.g., New York, Rhode Island, Massachusetts, and New Jersey) pay COOs the highest salaries.

The southwestern half of Texas, the Southwest corner of Kansas, and the northeastern half of Illinois also pay COOs high salaries.

COO Employment Outlook

The final frequently asked question about COOs that we are addressing here is: what is the employment outlook for Chief Operating Officers in the US? Since COOs are so critical to companies, demand for their expertise is increasing.

In terms of overall top executive jobs, the Bureau of Labor Statistics (BLS) estimates that there are nearly 3 million c-level positions available in the US. The BLS also estimates that demand for c-level executives will rise 8% over the next ten years, which equals about 209,500 new jobs added.

The COO unemployment rate has been on the decline since 2010. In 2022, over 4% of COOs were unemployed. Compare that to the unemployment rate for COOs in 2019, which was a minuscule 1.7%.

One of the best things about being a COO is that you do not have to stay in one place. The majority of COOs (33%) remain at the same company for only 1–2 years, while only 15% remain in their role at the same company for 11 or more years.

The 9 COO Archetypes

If you ask 100 industry executives what, exactly, a COO does, you will probably get around 100 different answers. That is because a COO’s role is intimately tied to the needs of the specific company he or she works for.

Still, we can generally divide operation leads’ roles into nine different categories or archetypes. Below, we will go into depth about each of these archetypes.

1. The Chief of Staff

Chief of Staff-type COOs are most common in smaller businesses and startups. They typically serve as partners instead of second-in-command to the CEO. Also, unlike typical COOs, the Chief of Staff does not manage any departments.

Why doesn’t the Chief of Staff COO manage anyone? It is because he or she is technically an extension of the CEO. The company’s founder or board of executives hires the COO to lend the CEO an extra hand and serve as the CEO’s strategic advisor.

In other words, the Chief of Staff and the CEO share duties. Some companies even require their COO and CEO to share an office in these cases. That way, the two executives can work closely to exchange strategies and ideas.

2. The Successor

CEOs do not remain CEO forever. Someone has to succeed the current CEO, and often that person is the Chief Operating Officer. In fact, many companies hire COOs with the intention of eventually elevating them to the CEO role.

But why hire the Successor as COO first? In other words, why don’t companies wait until the CEO leaves to bring in the heir apparent? One main reason is to have the Successor learn more about the ins and outs of the company first.

As we mentioned, COOs are more of a part of the day-to-day than CEOs. They also manage multiple divisions of a company rather than only one or none at all.

This factor makes the COO role a perfect vehicle for helping the Successor meet other high-level executives and show that they are the right fit for the CEO role.

And clearly, this strategy works. One study found that 44% of CEOs held the Chief Operating Officer position before ascending to Chief Executive.

3. The COO+

Other common operations lead role in startups is the COO+ archetype. This archetype refers to operations leads who do a whole lot more than oversee operations. These individuals typically assume additional c-suite duties.

For instance, a COO + CFO might take care of operations and oversee the company’s finances. They may also manage the finance department in addition to their duties as the operational lead.

Another common role COOs at startups take on is as the Chief Experience or Revenue Officer. These roles help define a company’s go-to-market strategies. A COO + CXO/CRO would handle operations as well as marketing and sales.

4. The Executor

Executors get things done. When a company hires a COO to be the Executor, they are looking for an individual who will take the c-suite’s strategic vision and put it into action. Results are a key performance indicator for these COOs.

Companies in particularly competitive markets often employ the Executor. For example, the technology industry is among the top sectors that employ COOs. And many of the COOs are Executors.

In fact, we have already talked a lot about Executors so far in this article. Executors are the type of COO who takes over the company’s operations. That way, the CEO can do fewer daily tasks and focus more on the long-term vision.

5. The Shot Caller

The last type of startup COO we will talk about here today is the Shot Caller archetype. Startup founders bring on Shot Callers to literally run the business in their place.

Often, the founder of the startup also serves as the company CEO. In a startup’s early days, the founder-slash-CEO often runs the company’s day-to-day operations.

When the founder wants to take a step back, he or she can hire a Shot Caller to take over some of those tasks. Then, the founder/CEO can focus on strategic vision, product evangelizing, or even narrowing the focus to a specific division or project.

6. The Agent for Change

Growing a business requires change, and change requires the Agent for Change COO. COOs who fall under this archetype are brought on to help employees and senior managers execute an institution-wide transition.

For example, the Agent for Change might help boost lackluster sales performance. If the company is going international, the Agent for Change might also help managers understand how to pull that off successfully.

The Change Agent comes into a company with little guidance. In other words, this type of COO will mostly fly solo. They will have to determine the proper path by which to pull off the change effectively.

7. The Mentor

The majority of CEOs are in the late stages of their careers. They have done and seen it all. But sometimes, whether due to budget or strategic reasons, companies hire qualified yet somehow inexperienced Chief Execute Officers.

The good thing about a relatively inexperienced CEO is that he or she can learn as the business grows. The downside is that if the company grows too quickly, the CEO may not have the chance to learn enough to be effective.

That is where the Mentor COO comes in. The Mentor is an operations professional who may or may not have served as CEO previously in his or her career.

What the CEO lacks in experience, the Mentor has an entire career behind them. That way, this type of COO can support the CEO and help him or her grow into the executive the company needs.

8. The MVP

Do you know that employee who started their career with a company and worked their way up? That individual knows the company’s history. What is more, that person is extremely familiar with the company’s internal processes.

This kind of expertise makes that person the company’s Most Valuable Player (MVP). And company MVPs are the ideal candidates for the Chief Operations Officer position.

Not only does giving the MVP the COO role reward him or her for their loyalty. It also ensures the MVP will not leave for a better position at a competing firm. At the same time, the company gets to benefit from the MVP’s expertise.

9. The CEO Foil

CEOs may be know-it-alls when it comes to the firms they run. But these leaders do not know everything. That is where the CEO Foil archetype can be highly effective.

The CEO Foil is an operational leader who has skills that the CEO lacks. For example, imagine a company run by a CEO who has many years of experience in the industry but who specializes in sales. In this case, a COO who specializes in marketing or product development might be an excellent CEO Foil.

In other cases, the CEO Foil may serve as a complement to the CEO’s personality. For example, imagine a CEO who has an excellent strategic vision but has trouble communicating that vision to employees. A COO who specializes in internal communications would be an excellent CEO Foil in that case.

Famous COOs and Their Archetypes

Now that you understand the different types of COO archetypes, let’s put that learning into action. Below, we have compiled some examples of famous COOs today and the archetypes they fall under.

Ana Corrales

Ana Corrales is the COO of Google’s consumer hardware business, Nest. Corrales earned the top spot on the list of the top 100 COOs of 2020. She has over six years of experience at Google and nearly 25 years of experience in the tech industry.

Corrales has experience as a CEO. She founded and headed up the solar energy startup, SunModular, which she sold in 2010. After over a decade at Cisco Systems, she became the CFO and COO of Nest.

Google acquired Corrales through its purchase of Nest in 2016. They kept her on as a Vice President from 2016 to 2018 before making her the COO of the Nest business at Google.

Corrales is the perfect example of how a COO’s archetype changes depending on the company. At Nest, Corrales had the COO+ archetype, acting as both the CFO and operations lead.

Now, Corrales’s archetype is the CEO Foil. She brings experience from Nest that Google Chief Executive Sundar Pichai does not have. Specifically, she has expertise in developing home hardware, while Pichai’s background is in web applications.

Tim Cook

Tim Cook is the former COO of Apple, and he has been Apple’s CEO since 2011. In 1988, he earned his Master’s of Business Administration from Duke University. Before that, he worked his way up to Director of North American Fulfillment at IBM.

Cook’s first COO role came as the COO of Intelligent Electronics. He oversaw the company’s reseller division until 1997. Cook then earned a position at Compaq, where he was quickly recruited by Apple.

Apple originally recruited Cook as a Senior Vice President overseeing global operations. But in 2005, the company promoted Cook to COO. At the time, Apple announced plans to name Cook as CEO Steve Jobs’ successor.

It is probably pretty obvious what COO archetype Tim Cook falls under. He is the Successor. When the board of executives named him the company’s operations lead in 2005, they explicitly stated their intention to see Cook succeed Jobs.

However, Tim Cook also falls under a second archetype. He was the Chief of Staff and interim CEO for various times when Jobs was on medical leave. During this time, Cook took over all the daily operations so Jobs could focus on the long-term strategy for the firm.

Pamela Nicholson

Pamela Nicholson currently serves as Chief Executive Officer at Enterprise Rent A Car. She has spent her entire career at Enterprise as the company hired her directly after she graduated from the University of Missouri in St. Louis.

Nicholson became Enterprise’s first-ever female CEO in 2013. She is also the first Enterprise CEO who is not a member of founder Jack Taylor’s family. Fortune also named her among the 50 Most Powerful Women in 2007.

Before Nicholson came on as Enterprise’s CEO, she served as Chief Operating Officer and company President for over ten years. And long before that, in 1981, Enterprise hired her as a management trainee.

Nicholson accumulated nearly 40 years of experience at Enterprise before retiring in 2019. So, it should be no surprise that we think her COO archetype is as the MVP.

After almost twenty years at Enterprise, the company rewarded Nicholson with the COO role. And this was a smart move considering that Nicholson could have taken her expertise to a competitor.

But Nicholson is also clearly the Executor. As COO in 2007, she increased the company’s sales by $3.5 billion, showing her ability to produce some pretty impressive business results.

Scott Donnelly

Scott Donnelly is currently serving as the CEO of Textron, an aerospace company. He is also a veteran of General Electric (GE), having worked for the company for almost 20 years.

At GE, Donnelly held multiple leadership positions within the company’s aviation, research, and healthcare divisions. He also held various management roles at Martin Marietta, GE’s former building materials subsidiary.

Donnelly left GE in 2008 to join Textron as COO and Executive Vice President. The company hired him for one specific reason: to succeed CEO Lewis Campbell when he retired.

One year after coming on as COO, Donnelly succeeded Campbell as CEO, making his archetype the Successor. Donnelly’s COO role lasted for a little over a year (from July 2008 to September 2010).

During that time, Donnelly had a chance to familiarize himself with Textron’s operations. A little over a year was just enough time for Donnelly to win over the staff and management team, allowing for a smooth transition to CEO.

Sheryl Sandberg

Sheryl Sandberg has been the Chief Operating Officer of Facebook (now Meta) since 2008. She holds an MBA degree from Harvard and has only worked for three companies throughout her 37-year career.

Sandberg worked for Google from 2001 to 2008. She served as Vice President of Global Sales and Operations during that time. Before 2001, she was the Chief of Staff for the United States Treasury for seven years.

In 2008, Facebook recruited Sanberg to become the company’s COO. Now, 14 years later, she still holds the position and has a successful track record at the company. She was incremental in helping Facebook transform into a profitable company, positioning it as a platform where businesses could sell ads.

As COO of Meta, Sandberg seems to qualify for two archetypes: the Agent for Change and the Executor. As the Agent for Change, Sandberg led the company’s pivot into ad sales.

At the same time, Sandberg turned Facebook into one of the most profitable companies in the world. The outcome-driven mindset that allowed her to pull this off definitely marks her as a result-oriented Executor COO.

Does Your Company Need a COO?

Fewer companies than ever before employ a Chief Operating Officer. According to Crist Kolder Associates, Fortune 500 and S&P 500 companies are 12% less likely to employ a full-time COO now than in 2000.

In many cases, companies forgo hiring a COO because the Chief Executive Officer has the bandwidth to lead operations. In other cases, other members of the c-suite take on the tasks a COO traditionally would.

Even more commonly these days, technology has begun to replace operations leads. Software programs can now do many of the tasks traditionally divvied out to COOs, including hiring, business process management, and more.

So what are the reasons companies still employ COOs? We looked into the statistics of companies employing COOs in 2022. We have compiled our findings below.

Company Size

In general, the larger a company in terms of employee headcount, the more it needs a COO. 31% of firms with 1000–10,000 employees have a COO. And 28% of companies with more than 10,000 employees have one or more COOs.

Mid-sized companies are more likely to hire COOs than small businesses. 13% and 16% of 100–500 employee and 500–1000 employee firms, respectively, employ a Chief Operating Officer.

The smaller a firm, the less its need for a COO. However, companies with fewer than 50 employees are slightly more likely to hire a COO than companies with 50–100 employees. 8% of the former companies have a COO, while only 4% of the latter firms have a COO.

Company Status

A company’s status on the market makes it more or less likely to employ a COO. For example, private companies are 22% more likely to have an operations lead than public companies.

Government-owned and Educational companies are the least likely to employ a COO. Only 5% of Government companies have COOs. Even fewer Education companies have COOs at only 2%.

Industry

Some industries are more likely to employ COOs than others. The top industries that hire operations lead in 2022 are:

Companies on the Fortune 500 list are also highly likely to employ COOs, regardless of industry. 11% of Fortune 500 firms have one or more operations executives in their c-suites.

The industries least likely to employ a COO are telecommunication, automotive, utilities, construction, and energy companies. In each of these industries, only about 1% of companies have a COO.

Company Need

Sometimes, a company has a specific need that only a certain type of COO can fulfill. This need often corresponds to the COO’s archetype.

For instance, when the CEO of a public company gets to retirement age, the company needs to decide on a succession plan. And as a public company, they need to be transparent about that plan. In this case, the company can hire the Successor COO.

Other times, a company is not losing its CEO. But the CEO’s task list has grown unwieldy, and he or she needs an extra hand. Here, it is critical for the company to hire the Executor or Chief of Staff COO.

The final reason a company might need to hire a COO is to mentor an inexperienced CEO. If the CEO is inexperienced in general, the company can hire the Mentor. If the CEO does not know the ins and outs of the company’s culture and processes, the MVP COO might be more beneficial.

Startups

Only 1% of US startups employ a Chief Executive Officer. There are many reasons why this is the case. Two big reasons are budgetary constraints and lack of growth. But here are some signs that a startup does need a COO:

• The founder or CEO spends too much time on internal operations, and the external face of the business is suffering
• Executives and employees feel overwhelmed
• The leadership team needs support
• The company is planning to scale operations significantly

Still, because COOs command a six-figure salary at a minimum, many startups feel they can not afford one. That is where a fractional COO can come in.

What Is a Fractional COO and What Are the Benefits?

Is your company having trouble affording a COO even though you need one? Then you might need a fractional COO. A fractional Chief Operating Officer is an outsourced executive that firms can hire on an as-needed basis.

Some of the services fractional COOs provide include:

• Day-to-day operations management
• Business strategy advice and execution
• Researching and implementing standard operating procedures
• Identifying key performance indicators
• Data analytics

Still not convinced that your company needs a part-time COO? Then you need to hear about the benefits of these professionals.

Enable Growth

Founders and CEOs are the primary growth drivers at most companies. They build external relationships, foster trust with the board of directors, and drive the company-wide strategic vision.

Yet, when a founder or CEO gets bogged down with day-to-day operations, they can not do what they do best. Hiring a fractional COO will free up valuable hours of the founder or CEO’s day. That way, he or she can focus on growing the company.

Scale Flexibly

The more divisions a company has, the more it needs a COO. And as a company scales, this problem increases. Yet, even the fastest-growing companies may not need a COO all the time.

Fractional COOs can help solve this problem. Companies can take advantage of fractional COO’s services on an as-needed basis. Then, when your company no longer needs the COO’s services, you can scale back until you need assistance again.

Reduce Risk

Two additional benefits of fractional COOs are their experience and affordability. And both of these advantages can reduce risk at your company.

Fractional COOs tend to have over a decade of management experience. Unlike most executives, they also have experience at various companies in different industries.

Fractional COOs are highly affordable because you do not have to hire them full-time. You can take advantage of their services on a part-time basis. You can also hire a fractional COO who only spends 30% of 40% of their time with your company.

These factors reduce risk, especially compared to hiring a full-time COO. Even the most experienced COOs do not have the breadth of experience that a fractional COO does.

How Much Does a Fractional COO Cost?

COOs are not cheap. But hiring a part-time COO can help cut costs. These professionals tend to charge by the hour, so you will end up paying a few hundred dollars per hour for their professional services.

Of course, the exact cost you will pay for a fractional COO’s services depends on how often you need them. If your company is on a budget, you should first determine how much you can spend on a COO. Then, figure out how many hours’ worth of services you can afford.

For example, say your company can only spend $50,000 on a fractional COO’s services per year. If those services cost $200 per hour, you can afford about 250 hours worth. You could then afford a fractional COO who works part-time 25 hours a week for ten weeks out of the year.

Do You Need a Fractional COO?

We have already discussed the signs of a startup needing an operations lead. But what if your company is not a startup? How do you know if your firm would benefit from a fractional COO?

Here are some surefire signs that your business needs operational assistance:

• You are a small business owner, and you are so busy that you feel ineffective
• Your company’s operations are out of hand, but you can not afford a full-time COO
• You are in a fast-moving industry like the tech and auto sectors
• You have more than 50 employees, but a project manager handles company-wide operations
• You work with an enterprise-size company, and you need a part-time divisional COO
• Your product or service is excellent, but your go-to-market or sales strategy needs improvement
• Your company’s CEO is qualified but does not have a lot of management experience
• Your company is undergoing a transformation, and you need a hand ensuring it goes off without a hitch
• Your company has started to stagnate when it comes to hitting revenue goals
• Your company is about to go public, and you do not yet have a COO in the mix

There are so many more reasons why a company might need fractional COO services. If you are not sure, you can contact me to find out whether your company can benefit from my fractional COO services.

Inquire About My Fractional COO Services

A Chief Operating Officer oversees a company’s internal operations. There are various types of COOs, allowing companies to pick an operations lead that fits their unique needs.

Are you searching for a part-time COO to help your company manage growth? Get in touch with me to learn more about my local and remote fractional COO services.

Originally published at https://www.linkedin.com.