Mark Hurd. If there's a poster boy for chief operating officers (COOs), Mark Hurd just might be the one. Sure, he's now chairman, president and CEO of Hewlett-Packard Co. in Palo Alto, Calif. But he proved himself to be a very capable COO at Dayton, Ohio-based NCR Corp., and some people believe that Hurd, an experienced COO-type CEO, is just what HP needs to regain its position as a world-class IT market player. Among the believers is Karen Myers.
"He comes straight out of a COO background. That was his title. It's also clear that is his style," emphasizes Myers, COO and CFO of Insight Inc., a Manassas, Va.-based firm providing supply chain solutions and consulting services. "I think he is doing a very good job."
Yet, does every North American manufacturing company, regardless of its size or location, regardless of its industry, regardless of whether it's publicly or privately held, need a COO? Coca-Cola Co. clearly thinks so. To fill the vacancy created when COO Steve Heyer left the company, the Atlanta-based beverage producer on Dec. 6, 2006, announced it was promoting Muhtar Kent, the head of international operations, to president and COO.
Whether or not a manufacturing company needs a COO, states Scott Kingdom, depends on the skills of the CEO; the skills of the group, or division or business-unit executives; and how the executive roles have been defined. "There is nothing so inherently specific or unique about the manufacturing business that kind of automatically leads you to a 'yes' or 'no' answer," emphasizes Kingdom, global managing director of Korn/Ferry International's industrial practice. Kingdom helps manufacturing companies find, among other people, CEOs, presidents and COOs.
In Timothy R. Hassenger's view, change -- more so than the size of a company or the industry it's in -- determines whether there's a need for a COO. And the COO's job is defined by "the degree of change that's asked or required of the business," says Hassenger, managing director of BBK, a business advisory firm specializing in manufacturing.
At Green Office Systems, for example, CEO Brian Eberle decided to put a COO in place so he could focus on growing the business. The $6 million, 85-employee, family-owned re-manufacturer of office furniture wants to double sales. And having a COO who grew up in the business -- his son Douglas -- frees Eberle to get out of the office to bring in more business.
"When you're in the business every day and you're running it, [that] kind of limits your ability to bring in new business and create new relationships," Eberle explains.
In assessing their need for a COO, most manufacturing companies would be well advised to first ask a few basic questions about roles and strategy, operations and competitive advantage. For example, a recent survey of 300 C-level executives done by Waltham, Mass.-based PRTM Management Consultants suggests three basic questions manufacturing companies should be asking themselves are:
- Who should be responsible for "game changing" operational strategy?
- Who should be the architect of operational changes aimed at gaining competitive strategic advantage?
- Who should be accountable for implementing the company's operating model?
For example, a manufacturer seeking to change the basis of competition within its industry "might want a CEO who's managing the external dimension of that change and a COO who is managing the quite formidable internal dimension of that operational transformation," he suggests. Similarly, a U.S.-based manufacturer that's a major global player "quite often will need someone who's playing a COO role to knit together what can be an increasingly complex set of operational relationships" that includes foreign partners, states Deck.
The choice is either an "operationally adept" CEO or a COO in charge of "driving" a level of excellence across functions, indicates Deck.
"Hard-Pressed To See Hierarchy"
Lehigh Technologies LLC, a supplier of engineered rubber powder to the tire, plastics, rubber and specialty chemicals industries, is a small startup with large aspirations. There are only three executives at its headquarters office: CEO Dennis J. Gormley, COO Anthony M. Cialone and CFO Patrick R. George.
So what then does Cialone do as COO? With several day-to-day operating responsibilities, he's a bit more Mr. Inside than is CEO Gormley, who has somewhat more of a Mr. Outside role with such people as investors and customers. This arrangement provides Cialone with some creative wiggle room.
At the same time "there is a lot of overlap," Cialone stresses. "We've got to know what each other is saying, doing and representing. We have to be able to work hand-in-hand," he states. "It takes people who have good chemistry with one another to be able to function in this type of organization." Adds Gormley: "I have two guys who are absolutely great, and I almost look at myself as the guy with the experience that wants to be sure that while these guys are testing the boundaries that we don't make the big mistakes."