A chief operating officer is typically in charge of the daily operations of a company, and the duties required of this role can vary widely between businesses. The COO role is often seen as the right hand of the CEO, and great COOs are usually skillful to alleviate everyday management tasks from the CEO’s shoulders. With the COO duties and role covering general operation details, the CEO has more time to dedicate to big-picture aspects of the business, like long-term strategy and efficiency solutions.
The chief operating officer can be a vital role to any company but what exactly makes a great COO? The various roles played by a COO are so numerous and ever-changing that companies need to find a true chameleon to fill the position. If you’re hiring for a COO, you’ll likely be looking for a candidate with a unique set of skills that set this leader apart from the rest of the group.
With our proven processes and guaranteed results, we have successfully placed hundreds of executive candidates in industries including technology, healthcare, manufacturing, retail, financial services, and private equity. COOs are an in-demand position—Cowen Partners has the experienced COO executive recruiters you can rely on to source top talent that fits your company’s needs, culture, and objectives.
The latest findings show that the median annual COO salary is between roughly $446,000 and $457,500. Bonuses for the position average an additional $166,802, and benefits are another $137,793. This brings the average compensation package for a public company COO to around $750,600 to roughly $762,000. Of course, when looking at this number, it’s important to factor in your location, candidate experience, education level, and more.
COO performance metrics offer an objective way to judge the effectiveness of a chief operating officer while providing signals when it may be time to initiate a COO executive search. While metrics can vary by industry, some apply to COOs, regardless of the industry or business in which (s)he operates. These metrics generally deal with operations, as the role’s title—Chief Operating Officer—implies. Here are some of the top COO performance metrics you can use to appraise the effectiveness of your current and/or next chief operating officer.
Use this COO performance metric efficiently by comparing the increase or decrease of the turnover rate during the period of your COO taking over. If the turnover rate is decreasing, then your COO is doing a good job. If on the other hand, the turnover rate is increasing, there must be something your COO is doing wrong, and you have to get to the root of the issue.
To properly evaluate your COO, you should ensure that this metric increases — try to get it close to 100%.
To measure the effectiveness of your chief operating officer, you can do a historical comparison of your operating margin. If you notice that that operating margin has been increasing during the period of your COO being in charge, then you can be sure he’s doing the right thing, and vice versa.
The operating cash flow is a COO performance metric you can use to judge how much money a company brings in. It would help ensure that your business can remain solvent for the foreseeable future. Note that your operating cash flow should be more than your expenses.
Use this COO performance metric effectively by ensuring that the cash conversion cycle is steady or that it’s getting smaller. If you notice that the cash conversion cycle has increased under your COO’s watch, then you know your COO has not been performing up to speed.
Check out our industry-leading resources, created by the nation’s top COO recruiters, to see why Cowen Partners is a leader among the nation’s best COO executive search firms in New York City, Chicago, Seattle, Atlanta, Dallas, Los Angeles, and beyond:
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