In the flux environment of global financial services, the role of the chief operating officer is undergoing profound change, our global partners report. While CEOs can make the headlines, a strong COO keeps the organisation delivering day in, day out. In 2022, 48 per cent of major US financial services firms had COOs, and many CEOs are former COOs.
As we continue our look at the potential future leaders of the Australian superannuation industry, COOs are a clear outworking of the increased competitive and regulatory pressures. Once relegated to the back-office of administration, project management, sometimes IT, and finance, COOs are now stepping into a leading executive role as agents for growth, resilience, and innovation. They need to be the conductor of diverse teams bringing together a truly harmonic performance.
The evolution of the COO can be viewed through the prism of the Four Rs: resilience, renewal, robustness and, most importantly, relationships.
Resilience
In an era of unprecedented upheaval, from cyber threats to pandemics to geopolitical tensions, it will be COOs that are at the centre of organisational resilience. They will design the organisation’s operating model, then stress-test operations and ensure seamless service delivery during crises. They will bring a deep operational approach to risk management.
Leading multi-functional teams, COOs know they need to attract and retain the best subject expert leaders. Teams will be working hybrid and may be dispersed, so they will need to champion wellbeing support, foster a culture of innovation, and invest in cross- and up-skilling. Future COOs recognise they need engaged and motivated teams to drive operational excellence.
Just as many other society-wide externalities will be dealt with by “closed-loop” programs, the responsibilities of today’s chief sustainability officer will be folded into the future COO’s team. They will embed a total sustainability focus as part of their resilience brief. Through constant collaboration with their leadership peers, sustainability measures will become KPIs expected by all stakeholders and investors.
Renewal
Future COOs will move beyond operations and finance to become strategic leaders who will drive the transformation of the organisation. As the finance sector deals with greater customer expectations, digital disruption and ongoing regulatory changes, so COOs will be required to build adaptable systems and processes to respond.
The future COO’s renewal focus includes the deployment of what we might label today as advanced technologies: data analytics, artificial intelligence, blockchain, and robotic automation. Fund members and regulators will demand more real-time access to data – for example, ESG or risk measures that already exist in separate silos across the fund and its service providers. The future COO will integrate emerging tools to deliver consistency in customer service, reduce costs, and likely be able to reallocate people to higher-function roles.
Robustness
As our future COOs move out of the back room they will adopt a similarly agile approach to our modern technology leaders. Along with organisation-wide design thinking and rapid experimentation, the future COO will be responsive to competition and regulatory demands, while maintaining a reputation for creating robust processes.
As major superannuation funds continue to develop internal capabilities, from investments to sophisticated member services systems, they will attract highly experienced global senior talent for both the career opportunity and the mission. This will bring its own renewal in terms of global thinking and business networks.
Relationships
The future COO will likely be an expert in a couple of functions and a master collaborator across their multi-disciplinary teams. They are the organisational mortar holding the functional bricks together, strengthening the culture while constantly aligning resources to the firm’s strategic direction.
External relationships are equally critical to the COO’s success. They will be visible externally, representing the firm’s transformation programs, such as insourcing investments or operating systems. This extends to forming deep partnerships with service providers and seeking out and adopting global best practices.
To succeed, they will possess top-level collaboration and negotiation skills. The old adage can be adjusted to “jack of all trades, master of collaboration” as a label for the future COO.
Everything everywhere all at once
The future COO will need to be a front-foot leader, in contrast to their past role as a reliable executor. The team they lead will likely need to be swapping skill sets in and out as required to meet challenges. They will be thinking about team development and succession planning. To succeed in a mature strategic setting, they will need to assume greater autonomy to move at pace across a wider remit.
As consumer expectations rise, future COOs will offer robust systems with responsiveness, bring their attitude of regular renewal, and build depth in organisational resilience to manage risk, all while understanding their success rests on being a master collaborator.
The future for the COO is bright, as our organisational conductor must deliver a strong symphonic performance that delivers everything everywhere all at once. Michelle Yeoh has nothing on our future COOs.
Previous articles in the Future Leader series include the future CEO, CRO, CIO, CPCO, CMO, CTO and trustee directors.
Michael Swinsburg is managing partner at Alexander Hughes Executive Search and Leadership Advisory.
