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Unlike any other position at a professional services firm, the chief operating officer is simultaneously the practice’s most visible follower and the key individual responsible for leading the execution of strategy. According

to Nathan Bennett and Stephen Miles, by better understanding this striking contradiction in responsibilities, partnerships and COOs can more effectively lead their practices.

Law practices, accounting firms, medical practicegroups, investment partnerships, and managerialconsulting groups are often structured with a CEO

and a COO. These positions are staffed such that theCEO is a practicing member of the profession – typicallyelected by the partnership for a finite term of service.The COO, by comparison, is primarily qualified based onbusiness acumen and his or her tenure may or may notsurvive several “generations” of CEO leaders. Granted,there is variation from this description, but this is thepredominant model. From this arrangement come a hostof challenges for COOs that are unique to professionalservice firms.

COOs at workBefore trying further to understand this uniqueness inprofessional service firms, it is useful to describe someof the foundational elements of the COO role.Investigations of the role have identified four criticalsuccess factors for COOs. Briefly stated, success beginsby building and communicating a business case thatsupports the timing and motivation for the creation ofthe role. Then, success depends on finding the personwho represents the best fit to the opportunity. Finally,the last of the factors regards execution – no matter how“right” the COO is for the job, without sufficient on-going support he is unlikely to add value. When all fourof these steps are done properly the position can be anenormous asset to both the CEO and the company. →

As one might guess, the determination of whatis “right” in each case is a complex processbecause of the interdependencies among the foursuccess factors. The right person depends in part onthe reason and the timing, and so on.

Digging a bit deeper, there are seven reasons forthe creation of a COO role – each could conceivablybe defended using business rationale. Depending onthe circumstances faced by the focal business, theCOO role could be justified for one or more of thesereasons, to:

● Lead the daily execution of company strategy,usually in an operationally intensive industry

● Train as the heir apparent to the current CEO

● Allow the company to retain executive talent thatother companies may be trying to lure away

● Complement the CEO by bringing to the pairskills that the CEO either lacks, has not yetsufficiently developed, or prefers not to exhibit

● Serve as a co-leader; to be a very close partnerwith the CEO

● Be a change-agent charged with championing aspecific piece of work, such as developinginternal systems and operational discipline,orchestrating M&A, entering a new country-market, and so on

● Serve as a mentor to an inexperienced ordeveloping CEO.

Right person, nice fitTo the extent that the CEO and the board are able toelaborate a compelling case as to how the COOposition properly addresses one or more of thereasons above, then the “right reason” criterion hasbeen met. For example, after several years at thehelm of Quest Diagnostics, Ken Freeman built acase to bring on a COO both to prepare for a chanceat the top job and to help manage the acquisition ofSmithKline Beecham’s testing business. Freemanapparently did this successfully; Quest hasperformed well and his choice for COO, SuryaMohapatra succeeded him as CEO in 2004.

As to the question of the right person and the fitwith the opportunity, the firm’s leadership needs toconsider three things. First, is the COO candidate afit with the CEO/managing partner? The twoexecutives will need to quickly form a trustingrelationship and develop productive communicationnorms. Though liking is probably not a requirement,it is paramount that an unwavering respect existsbetween the two. Second, is the COO candidate a fitwith the demands of the position? Here, the key istheir ability to accomplish the business reasonbehind the position’s creation. As examples, MortTopfer’s ability to mentor Michael Dell during thegrowth of his company and Bob Herbold’s ability tobring internal discipline to the Microsoft culture

serve well. Finally, is the position a fit with theaspirations of the COO? Where the COO has aninterest in one day serving as CEO, issuessurrounding the likely timing of such an opportunityare critical. Similarly, if the board is quite certainthe COO incumbent has no upward mobility at thecompany, that needs to be clearly communicated atthe outset, as well. To the extent that the CEO andboard have found a candidate that “fits” the CEO,the needs of the business, and the opportunity, thenthe “right person” criterion has been met. Severalhigh profile executives such as Steve Heyer (Coca-Cola) and John Brock (Cadbury Schweppes) haveleft companies after concluding the top job wouldnot be theirs – at least not on their schedule. BothHeyer (Starwood Hotels) and Brock (Coca-ColaEnterprises) now are CEOs.

Next, the timing of the position’s creation needsto be considered. One interesting thing about COOpositions is that they are used strategically and maynot be filled for periods of time – companiesannounce that the COO is leaving or is beingpromoted to CEO and the “duties will be assumedby other members of top management”. In manycompanies the job exists, disappears for a while,then returns – as has been the case at Microsoft.This suggests that timing – both with regard to thecompany’s needs and the CEO’s needs – must be aconsideration. As to the company’s needs, we referback to the discussion of the business justificationfor the COO position. As to the CEO’s needs, twopoints are critical. First, the CEO has to be ready toshare power with the COO. In some ways, thisbecomes a psychological drama – can the CEOshare power without suffering an ego-blow? This isplaying out at Intel where Paul Ottelini, the CEOand former COO, has not yet announced a new COO.Second, a number of CEOs have indicated that theCOO role becomes important after they have reallydeveloped an understanding of the company. CarolBartz at Autodesk and Ed Zander at Motorola aretwo examples of CEOs who have talked about theimportance of the CEO really learning the businessbefore creating an extra “layer” of managementbetween them and it. Finally, as noted above, thereis an issue of timing that the COO candidate shouldbe considering, too. If they aspire to the CEO role,they need to have a sense of how much “runway”the chief executive has left and whether or not thatcoincides with both the time they need to preparewhile serving as heir and the time they are willing towait. To the extent that the CEO and the Board haveaddressed and resolved these issues, the timingcriterion has been met.

Chief communication officerFinally, once the right person has been found, the

© 2006 The Author | Journal compilation © 2006 London Business SchoolBusiness Strategy Review Autumn 200662

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business case and the timing well articulated andwidely-accepted, the issue of ongoing supportrequires attention. In our conversations with COOs,a number of important sorts of support are regularlypointed to as critical. The most critical form ofsupport that the COO needs is frequent, open,honest communication. The chief reasoncommunication is so critical is that it helps assurethe CEO and COO stay aligned on matters ofimportance to the company’s success. Whereverfault lines emerge, some will seek to exploit them.Should a wedge be driven between the two, theresulting confusion hinders the ability of others toexecute on the company’s plans and may lead toderailment of one or both of the CEO/COO.

The second key element of support COOsmentioned is the importance of an ongoingagreement about where the CEO and COO jobsbegin and end. The boundaries between thepositions are likely to be evolutionary – that is not aproblem as long as there is good communicationamong the executives and as long as each backs upthe other with regard to where decisions get madeand their roles are communicated to the broaderorganisation to ensure clarity is maintained.

The third issue – the “back door” problem –refers to the desires of top executives who onceaccustomed to serving the CEO as a direct reportnow find themselves reporting to the COO. COOsneed to become comfortable with allowingexecutives access to the CEO – to do otherwisewould simply be foolish. At the same time, wherethe CEO understands the concerns being broughtforward “belong” to the COO, the CEO needs to

respect that and guide the executive back to the COOfor the decision. Failure to do so blatantly erodes theauthority of the COO and can lead to derailment.

Finally, great COOs understand that their jobinvolves working for the success of another – theCEO. To the extent that the CEO is willing to sharethe spotlight, the COO is supported in that others –including members of the board – recognise thequality of the COOs contributions and theirdedication to the company. In all, to the extent thatthe Board and CEO continually provide support, thatcriterion is met.

Professional service COOsWith this background, elements of the COO role thatare unique to the way the position operates in

professional service firms become clear. Three pointsare particularly critical to successful firm leadership:

● the business case for the COO position● how COOs survive leadership changes● how COOs learn to use influence to “lead from

behind”.

Earlier, seven business reasons that supported thecreation of a COO role were outlined. Reviewing thatlist in the context of most professional service firmssuggests that only a few of them are likely to berealistic. In these firms, the predominant rationalebehind the role is that of executor: The COO is thereto make sure the firm is effectively run. There isevidence to suggest that the COO as mentor role hassome presence – particularly to the extent that aCOO who has survived a leadership transition playsan important role in the on-boarding of the newCEO/managing partner. Similarly, there is evidencethat an occasional “change agent” motivation ispresent – typically when there has been atumultuous leadership succession and the firmrequires a “new start” of one form or another. Thatsaid there is scant evidence of the COO positionbeing a place to develop an heir apparent or toretain executive talent.

All this is consistent with the view that in thesefirms the COO position is one where the incumbenthas “hit ceiling” – career progressions from this jobforward will require moving to a similar position witha bigger and/or more prestigious firm or perhaps to afirm in a more desirable location. This creates amanagement challenge: how can a firm continue to

develop and motivate their COO when the prospectsfor personal and economic growth may really lieelsewhere? There are two choices here – each isbased in accepting the reality that at some point theCOO will outgrow the job. In one scenario, thepartnership accepts this and manages the COO in amanner that is friendly to the opportunities thatmight one day arise: the spotlight is shared with theCOO, challenges that stretch the incumbent areoffered and efforts to ensure success are made.Ultimately, successes are celebrated publicly. In theother scenario, the COO is managed without muchexposure to light and with an emphasis on thedevelopment of firm-specific skills that woulddecrease the incumbent’s attractiveness to otheremployers.

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Great COOs understand that their job involves working forthe success of another – the CEO.

Of course, the irony here is that in managingthe COO with an appreciation of the fact that theymight leave, the partnership actually creates thesort of job that would entice them to stay while onthe other hand the partnership concerned with“imprisoning” their COO is essentially helping themdecide to leave. An example of this was describedby Andrew Waitman, the managing partner at CelticHouse Venture Partners, a VC firm which specialisesin early stage investments in high technologycompanies in North America and the UK. Indescribing the way he partners with the COO, DavidAdderley, he said he encourages “David to go out to

venture shows representing our firm . . . it provideshim exposure, we know he makes a greatimpression, and it makes it clear to all that our firmhas managerial depth – that we are more than just acollection of investors.”

The second unique component to the COOposition in professional service firms is the fact thatoften the COO serves through multipleadministrations. This would be quite rare in otherbusiness sectors. What is much more common is forthe position to be eliminated while the CEO“learns” the company. For example, when JohnBrock became CEO at InBev he eliminated the COOposition. Though he reported it was painful to haveso many direct reports, he recognised that becausehe came in from outside the firm it was the bestway to really understand the dynamics underneaththe company’s operations. He acknowledged thatthe arrangement was not sustainable over time;moving forward it would again become the righttime for a COO. In contrast, it is difficult to imaginea new leader in a professional service firm decidingto simply eradicate the COO position in order thatthey could then “learn the business.”

When the COO wants to survive multipleadministrations, there needs to be an ability toadapt to the personality and tendencies of thevarious CEOs. As Karen MacKay, a principal withEdge International, notes from her experience withlaw firms in the UK and around the world, “It isfascinating to watch COOs adjust their styles basedon the practice background of the new managingpartner. When the managing partner’s background isin litigation, they want to ‘win’ every interaction;when the managing partner is a tax attorney, each

detail is fascinating and important; when themanaging partner has a corporate background,everything is a “deal” to be made . . .effective COOsunderstand these different styles and can adapttheir approach to the job accordingly.”

There are cases in professional service firmswhere the COO does not survive a leadership change– usually this was because the COO ‘bet on thewrong horse’ in that they had, whether intentionallyor not, become too closely associated with a losingcandidate for the top job. Arguably, this points tothe most critical thing for COOs to understand –successfully remaining in place across leaders is

most directly the result of creating confidenceamong the partners that your loyalty is to the group– not only to particular members of the group. AsMacKay said, “to the extent that partners see theCOO as loyal to the firm, they can trust them to actin the best interests of the firm.” The second key tosuccess across leadership transitions concerns theway the COO is portrayed by each incumbent – thiscan be summarised as the degree to which the COOhas the spotlight. When a COO has demonstratedunequivocally that he is both competent and loyal,it would border on foolishness for a new CEO toadvocate a change of COO. Frankly, given theconcerns many CEOs have for maintaining their ownprofessional practice, it would seem unlikely theywould make a move to fix an element of theoperation that was not broken. This point wasechoed by Jeff Scherb, the COO/CTO of the EuropeRegion for Heidrick and Struggles, who said “thework I do has become associated with myposition . . .no new boss is likely to see a reason towant to take it on . . .each of my new bosses hasbeen content to let me continue with my plans Ithink because I have been able to articulate thevision and strategy well. I have tried to elaboratethese things in a big enough way that they areclearly going to last longer than the service of anyone CEO or regional managing partner.”

The final difference in the circumstance of theCOO in a professional service firm concerns the wayhe uses power and influence. Individualorganisational power is generally acknowledged tocome from five sources: the position, the ability toreward, the ability to punish, being seen as expert,and from being liked. The COO in a typical

© 2006 The Author | Journal compilation © 2006 London Business SchoolBusiness Strategy Review Autumn 200664

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Successfully remaining in place is most directly the result ofcreating confidence among the partners that your loyalty isto the group – not only to particular members of the group.

organisation arguably has access to all of thesesources of power. Of course, there is a great deal ofpower vested in the number two position. Further, tothe extent that the COO has used his position toforge a trusting relationship with the CEO, evengreater levels of power become available. Typically,the COO is in a position to administer both rewardand punishment either directly or indirectly throughhis influence on the CEO over others. In manycases, the COO will be someone who is viewed asexpert – it is his savvy regarding the industry andoperations that earned him the position in the firstplace. Of course, some but not all in COO positionswill be able to access power that is the result ofothers’ liking. Because these COOs have access toall these sources of power, they have many moreoptions available in their efforts to influence others.As is true in many cases, the more tools you have atyour disposal, the better off you are.

In comparison, COOs in professional service firmshave fewer of these tools. Most quickly seen is thedifference in expert power – COOs are generally notlawyers, doctors, certified financial analysts, dealpartners, management consultants, and so on.Similarly, they are likely not in the same position touse the promise of reward or the threat ofpunishment to influence many of the firm’smembers. Instead, they are limited to a reliance ontheir demonstrated expertise about operations andbuilding tight relationships with those they need toinfluence. Karen MacKay explained that from herexperience the effective COOs were “those who canlead from ‘behind’ – they understand how to plantan idea with one or more key partners, how tonurture it so that it grows, and how – as it grows –to begin to allow those key partners to view the ideaas their own. Some ideas need to begin with thosewho are influential in a specific practice, someideas need to begin with senior partners, still otherideas need to begin with women attorneys. GreatCOOs recognise that and know where to plant theseideas so that they do come in to being.” That said it

is true that the COO will have access to power to thedegree that they have strong relationships with theCEO. Jeff Scherb added “people know Kevin [Kelly;the regional president] and I are complete partnersin this . . .he and I both trust each other completely,so there is never an issue about one of us questioningthe other’s decisions. Everyone recognises this andaccepts either of us as decision makers.”

COOs in professional service firms have animportant job – no amount of professional talentcan overcome a situation where the firm can’texecute its strategy and serve its clients needs in anefficient manner. For that reason it is important thatthe COO role itself be thoughtfully considered andwell-executed. The first issue – that the position becreated for the right reason and at the right time –is relatively straightforward in these firms. Given thetalents and proclivities of the firm’s professionals,their interest and ability in attending to the dailyoperations of the firm are likely low – the COO is asolution to this challenge. Next, there is the matterof the right person for the position. This isinteresting because it is quite possible that theCOO’s tenure will span that of multiple CEOs. Thekey to success for the COO is the ability to be savvyabout adapting to each new leader’s style, to beeffective at planting and nurturing ideasstrategically among those with the power toinfluence other professionals, and to develop anddemonstrate a loyalty to the partnership rather thanto one or a few individual partners.

Finally, the question of the right support to createa successful COO must be addressed. Of course,the basics – clear communication, involvement indecision making, backing decisions made by the COO– need to be present. Beyond that, firms interestedin retaining their COO need to be deliberate aboutshining the spotlight on them and about providingopportunities for growth within the confines of thefirm. When shaped effectively with the stepsoutlined above, the COO role can bring to anyprofessional services firm unprecedented value. ■

Business Strategy Review Autumn 2006© 2006 The Author | Journal compilation © 2006 London Business School 65

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eNathan Bennett (nate.bennett@mgt.gatech.edu) is the Senior Associate Dean and a professor ofmanagement at Georgia Tech’s College of Management.

Stephen A. Miles (smiles@heidrick.com) is a partner and practice leader in leadership consulting atHeidrick & Struggles. Together they are authors of Riding Shotgun: The Role of the COO (StanfordUniversity Press, 2006).

London Business School Regent’s ParkLondon NW1 4SAUnited KingdomTel +44 (0)20 7000 7000Fax +44 (0)20 7000 7001www.london.eduA Graduate School of the University of London