Updated: Mar 10, 2021
How to make a difference and truly have an impact
Jane’s COO team were recognised for consistently delivering to the highest standard and like a world-class juggler managed to keep a seemingly impossible number of balls in the air at the same time and without letting them fall to the ground and hence a project or task fail to be delivered. Her team of talented professionals from diverse backgrounds trained and coached to an enviable standard, each with top-notch skills and capabilities which they applied to a variety of urgent and important projects that came their way. Some had followed Jane as she moved office location and gained in seniority, such was her reputation that people desired to be either part of her team or work closely with them so they could learn from her. When another high-profile, urgent project came from the Exco, naturally Jane and her team were selected to take care of it. What makes the difference and turns people like Jane into a linchpin for their organisations?
Learning and Development teams do a good job stretching their scarce budgets across large areas of their organisations. Nearly all large companies are effective with making investments to train their entry-level employees or to learn technical skills required to perform most roles but without a deep understanding of what it takes to be successful in certain linchpin roles this type of training cannot be effective. Companies vary widely when it comes to the level of effort they invest to deeply understand critical positions, what it takes for professionals in them to be successful, and the reality of the environments they operate in with negative consequences such as ineffectual decision making, derailment and imposter syndrome.
Let’s be more specific and drill down into what a linchpin is and how they are different. A quick search online provides the following descriptions:
a person or thing vital to an enterprise or organization
one that serves to hold together parts or elements that exist or function as a unit
Seth Godin (author, teacher and one of my inspirations) goes even further to emphasise the importance of linchpins within organisations:
“…the Linchpins, are the people who make a difference, the ones that ship, the rare ones that truly have an impact. This group of people, in that moment of time, change everything.”
So why do I believe Chief Operating Officers (COOs), broadly defined, match this description and deserve to be referred to as linchpins? In a nutshell, it is because, COOs must come up with innovative solutions to complex, often adaptive challenges, constantly learning but at the same time having to make decisions based on incomplete and at times seemingly conflicting information and demands. The best COO’s are comfortable “threading the needle”, achieving business objectives by striking a balance between conflicting goals and interests. They usually have small teams yet must influence and motivate large virtual teams or teams of teams to achieve the objectives for their businesses. Technical acumen is a minimum requirement to succeed, more important are the leadership and interpersonal skills in order to motivate and influence large, complex and virtual teams.
To help organisations understand what skills and behaviours COOs must continuously invest in to be most effective in their roles, I created a development framework. In this model, the most common set of challenges that often go unnoticed and hence underdeveloped are broken down into distinct areas to focus on. But before we get into those details, let’s take a closer look at the financial services COO role, why it is so important to the smooth running of a complex business and the benefits organisations can gain by investing in the development of their teams.
The financial services COO role has undergone considerable change since the financial crisis. The change was inevitable considering the market, economic and geopolitical volatility as well as significant regulatory changes over the past ten years. Adapting to resource constraints, the war for talent and increased regulatory scrutiny, to name just a few, have required an evolved and ultimately more sophisticated and yet subtle skill set.
What this means for COOs is that they are operating in an environment where things are changing faster, increasingly so and different kinds of things are changing in a multitude of ways. The management acronym VUCA, does a good job of summarising the reality in which they operate:
Volatile, increasingly so, unexpected events
Uncertain, unclear and incomplete information
Complex, many connected parts and variables
Ambiguous, lack of clarity, lack of precedents
It is this very environment that has driven the increased demand and importance of the role as it has expanded from being the preserve of the front office/first line of defence to being common across most second line of defence functions, such as finance, technology and legal and compliance.
The Different Types of Financial Services COO
The COO title is used inconsistently across the financial services sector, typically roles such as Chief Administrative Officers (CAO), Chief Control Officers (CCO) or Chief of Staff (COS) are part of the business management arena and hence are often used interchangeably, albeit the different names highlight differing priorities for the role within each organisation.
According to the seminal 2006 HBR article: Second In Command: The Misunderstood Role of the Chief Operating Officer (Nathan Bennett and Stephen Miles) article there are seven kinds of COO. However, in my experience three of the seven are the most accurate descriptions for the post-financial crisis, financial services COO:
The Executor – to coordinate and execute the plans and objectives developed by the top management team, the Exco. Often there is simply to much scope and complexity for one pair of hands and so the COO will take on responsibilities that would often belong to the CEO’s in a less complex organisation.
The Change Agent – to lead and be accountable for a specific high-priority and high-profile initiatives such as financial resource optimisation or e-trading technology efforts. It is common for the COO to be responsible for multiple high-priority projects and free up the CEO to focus on strategy, clients and important day to day decisions.
The Other Half – the COO’s skillset complements the CEO’s experience, style and expertise. Often the CEO will have risen through the ranks as the most successful trader, salesperson, or technical expert and is missing core knowledge and skills that are increasingly required to run a complex business or department. The combination of the CEO and COO will often be the complete package.
There is one core element to the COO role that I feel differentiates it from most others: COOs, being in charge of day-to-day operations, regularly have to make decisions, often without consultation, risking the unhappy reactions of others as they perform the delicate and often impossible task of threading the needle. If you were to ask the more experienced COOs what the single most important improvement they needed to make during their careers, the list identified would be something like this:
Be a more effective, forceful and direct communicator in all settings
To stop worrying about upsetting everyone, stop trying to appease the loudest vested interest groups
To be a more effective challenger of the CEO and Exco and less focused on their approval and support
To have confidence in themselves, their skills and hence to speak up more and voice their opinions
Be an effective delegator and be comfortable saying no and not automatically accepting the need to involve themselves in everything urgent
Yet typically an effective feedback loop that captures this experience and wisdom is missing with the result that a tailored talent investment program that recognises and embraces the uniqueness of the important role is substituted with more generic training or reliance on learning on the job. The latter does a good job when it comes to learning technical skills but are not effective at helping busy professionals develop new skills and capabilities to address the most important improvements identified by the experienced COOs and hence what is required to be a linchpin.
The Six Development Needs
Don't worry. There is a solution. Through my coaching and prior career experience, I have identified six critical areas that COOs should invest in and develop to elevate their impact and influence. The areas in which they need the greatest development support are leadership capabilities, interpersonal skills and behaviour. As Marshall Goldsmith in
"What Got You Here Won't Get You There" says,
“…the higher you go, the more your problems are behavioural…”
In these financial services organisations, all the players are smart and are technically skilled – they wouldn't be in their roles otherwise. To reach the top, they need actionable insights into the specific areas that are outcome-driven and can readily link back to their business strategy.
Six critical development areas for COOs:
What's the bottom line? Continue to remain on top of and current in the required technical skills for your role. It is actually the leadership, interpersonal skills and personal behaviours that become so important and have a more significant impact on the higher rungs of the financial services ladder. Investing in and making improvements to these areas will result in more effective, more impactful and better-prioritised decision-making, high-quality execution delivered by high-performing teams, and more satisfied stakeholders and a better chance of meeting or exceeding the objectives of the business.
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