Difference Between CEO and COO

Edited by Diffzy | Updated on: June 06, 2023

       

Difference Between CEO and COO

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Introduction

CEO (Chief Executive Officer) and COO (Chief Operating Officer) are two of the most reputable positions in a company. These two C-Suite executives work closely to oversee the company's performance and lead it toward success.

They have huge responsibilities on their shoulders, and the company's growth depends on how well these two executives supervise and maintain the workflow of the company.

CEO vs COO

Although they both have a few similar tasks, there are some differences between these two roles.

The CEO is the topmost rank within a company, whereas the COO is the right-hand man of the CEO and comes second in position. The main task of the CEO is to envision certain goals for the company and direct them towards that goal, while the COO must ensure these goals will get fulfilled by overseeing the performance of each department of the company.

Both CEO and COO work hand in hand for the company to achieve great heights, but both of them have some distinct roles.

Difference Between CEO and COO in Tabular Form

ParameterCEOCOO
PositionCEO is the topmost rank of a company.The COO is the right-hand man of the CEO and comes second in the company.
ReportingThe CEO reports to the Board of Directors of the company.The COO reports to the CEO of the company.
Roles and ResponsibilitiesThe CEO makes a vision, plans out strategies for the long-term well-being of the company, and directs it to reach and maintain that goal.The COO is responsible for implementing the strategies and supervising the operational affairs within the company.
FocusThey focus on external affairs more and work on making relations with the shareholders and investors of the company.They focus mainly on the internal processes for the smooth functioning of the various departments in the company.
NecessityA CEO is an essential role in the company.A small firm can deal without the support of a COO. A COO is required by the companies which need support in managing the high level operations. COOs add to the well-being of a company.

What is a CEO?

CEO or Chief Executive Officer is the top-ranked C-Suite of a company. They are hired by the Board of Directors to lead their company. The CEO makes visions for the company and directs it to achieve the standard required to run favorably in the business world. the CEOs are the faces of their companies. They are required to participate in the external matters of the firms, including attending and participating in conferences and events, building and maintaining relations with shareholders and investors, and managing the marketing and expansion of the company.

The CEO is the ultimate decision maker, which is a big responsibility as making such big decisions may either lead the company towards success or risk failure. The CEO is accountable for the performance of the company.

Qualifications Required

A CEO must be a graduate, preferably in Business Administration, and should have at least 5 years of work experience in a relevant field.

Skills Required

It is not a piece of cake to lead an organization. The CEO must stand tall and lead the way through thick and thin for the company to have its name in a world filled with competition. One needs to have some very unique skills to become a CEO.

Some of these skills are:

  1. Vision – The CEO must have a vision for the company's future and then plan strategies to reach that goal.
  2. Leadership – The CEO must be a good leader who can encourage the team to be efficient and aim toward the set goals.
  3. Decision-making – The CEO must be comfortable with making strong decisions and understand that one big decision can change the company's future.
  4. Risk Management – The CEO must always be mindful of every move made concerning the company. The risks should be measured before taking any step that can hamper the growth of the company. The CEO may decide not to take a certain route if it is too risky.
  5. Ethics – The CEOs must have respect towards the work they do and towards their workers, customers, and fellow competitors. They should never deal in unethical activities that may cause harm to themselves, their company, or other companies.
  6. Management – CEOs must have management skills because one cannot be a successful CEO if one cannot handle a company and its team.
  7. Creative – CEOs should be creative in deciding various strategies for organizational growth.
  8. Interpersonal communication – A CEO has to meet and greet several stakeholders of the company and hence, need to have top-notch communication skills to have a good impression among them that will ultimately benefit the company.

Types of CEO

CEOs can be divided into various types according to their motives and skills.

  • Finance Driven – This CEO type focuses on providing shareholder value. They must have a financial background and an in-depth knowledge of value metrics (a measurement to indicate the value of their products among their customers). They remain fixated on transactions and portfolio dispersals.
  • Culture-Driven – This type of CEO is concerned with creating a positive work environment for their workers. They are down-to-earth, approachable, and enthusiastic individuals. They are ready to listen and make changes to the things that are concerning to their workers. They are the people's champions and measure their success with the engagement of the team.
  • Global Missionary – These CEOs have the goal to make it at the top and be known by the world. They have a vision and mission to be a change maker who can make their organization great.
  • Company Representative – These CEOs dedicate their heart and soul to the organization. They want to make a good impact on society through their organizational work. They operate at the geopolitical level and aim to make a difference in the industries.
  • Corporate Innovator or Entrepreneur – As the name suggests, these CEOs are innovators and entrepreneurs. They have something to prove to the world. They are creative individuals who initiate the new business idea. They are mainly motivated by monetary gain. Their company is their life and they would go to a great extent for its well-being.
  • Business Executor – This CEO type is business-oriented and is focused on the success of the company. They are dedicated and hardworking and would do what it takes to benefit the company. They are the typical CEO we all have in mind when we think of a CEO.

What is a COO?

COO stands for Chief Operating Officer and is the second-ranked position in a company. They are sometimes called the vice president of operations. They are selected to assist the CEOs and handle the operational work of a company.

A COO sees to it that all the day-to-day operations are running smoothly. The COO also communicates with shareholders and investors from time to time so the CEO can meet and greet them.

Qualifications Required

COOs require a Bachelor's Degree in Business Administration and 5-10 years of experience in a relevant field, and a track record of team building and management. A Master's in Business Administration is a huge plus point.

Skills Required

A COO's job is often undervalued, but one needs to have some immense skills to become a COO. Managing the operations of an organization takes a lot of diligence, patience, and determination. Some of the skills required to be a COO are:

  1. Multi-tasking – A COO must be able to handle several tasks at a time, like managing a team, looking after the company operations, research and development, and many more tasks.
  2. Team builder – A COO must be a good team leader and a team builder. This individual must be able to motivate the team members to perform efficiently and be good at understanding every concern of the team members and deciding to come to a specific solution together.
  3. Management – The COO must be able to manage the day-to-day tasks of the organization and ensure all the operations are running smoothly.
  4. Time Management – The COOs must be able to manage all the tasks and complete them in the required time.
  5. Analytical skills – The COOs must be able to analyze the processes that may either cause hamper or may improve the situation of the company.
  6. Problem-solving – COOs must be able to spot the problems and assist the CEO in coming up with solutions.
  7. Interpersonal communication – COOs guide multiple teams in a company, and hence they must be able to communicate effectively with every member of every team to build a connection with them. The COO is also the medium of communication between the various teams and the CEO of a company.

Types of COO

COOs are divided into various types according to their experience and skill set. All companies have different requirements for the COOs and hire them according to what kind of work they want the COOs to look after.

The various types of COOs are:

  • The Executor – As the name suggests, the executor works on the execution of the strategies set by the higher-ups. The executor oversees the implementation of the strategies and delivers the results on time.
  • The Change Agent – This type of COOs is required to help in making some necessary changes in the company. Often some companies lag behind others due to managerial or marketing issues. This is when the change agent comes to the rescue. The change agent evaluates the situation, points out faults, and suggests strategies to improve the performance of the company. Then they spearhead the strategies required to make the changes. The change agents are also hired when the companies are doing well but want to expand their business and need expert guidance to do it.
  • The Mentor – The mentor COO is hired to teach a new and inexperienced CEO how to run a company. The mentor COOs use their years of experience and wisdom to guide the new CEOs. Often the new CEOs are the founders of newly opened companies and need some real-time advice to kick-start their work. The mentor COOs help these CEOs to become a boss of their own and are guided to make well-thought decisions and plan strategies for the growth and well-being of their companies. The mentors are required only temporarily to assist the CEOs till the latter start taking matters into their own hands.
  • The Heir Apparent – The Heir Apparent is chosen to be the COO to work closely with the CEO and learn about the latter's work to, ultimately, become the CEO.
  • The Other Half – This type of COO is hired to fill up the missing pieces of the CEO. They have skills that the CEO does not have, hence they complement the CEO whenever required.
  • The Partner – At times, CEOs are not comfortable working alone and work best when they have someone to supplement their work. The Partner COO is hired to work as a co-leader with the CEO and has almost the same responsibilities as the CEO.
  • The MVP – Companies most often have to compete with others, not just in terms of business, but in terms of having competitive and efficient workers in their teams. Many times, valued workers are lured to other companies with the promise of extra benefits in their companies. To prevent losing valued executives, some companies promote them to become their COOs. This type of COO is called an MVP.

It may be mentioned that COOs may be required for a variety of responsibilities; hence, they are not limited to just one type.

Main Differences between CEO and COO in Points

  • CEO is the top-ranked executive of a company, whereas the COO is the second-ranked executive.
  • CEO reports to the Board of Directors, whereas the COO reports to the CEO
  • CEO mainly deals with the external affairs of the company, whereas the COO mainly deals with the internal operations.
  • The CEO makes the vision and plans strategies for the growth of the company, whereas the COO implements these strategies.
  • CEO is an essential rank in all companies, whereas COO is not required by some companies
  • CEO is responsible for a company's success or failure, whereas the COO is accountable for the functioning of the company.

Conclusion

Both Chief Executive Officers (CEO) and Chief Operating Officers (COO) are prominent roles in a company. They both need to be highly skilled to be able to perform their tasks effectively. They work closely together, but each has very distinct roles and responsibilities. Their roles may also differ in various organizations according to the vision and mission of the organizations. It cannot be denied that both of these roles are valuable to the organizations they work for.

References

  • https://www.hrmagazine.co.uk/content/features/the-six-types-of-ceo/
  • https://fellow.app/blog/leadership/ceo-types-which-one-are-you/
  • https://in.indeed.com/career-advice/finding-a-job/ceo-vs-coo
  • https://resources.workable.com/hr-terms/ceo-vs-coo

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"Difference Between CEO and COO." Diffzy.com, 2024. Thu. 21 Mar. 2024. <https://www.diffzy.com/article/difference-between-ceo-and-coo>.



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