Chief Operating Officers can, in a great way, ensure that all organizations run efficiently and smoothly. The role, however poses its own conflict, especially as far as ensuring operations are prioritized is concerned.
This article discusses how COOs face different types of obstacles in their work and how these may even affect general business operations.
Controlling Operational Priorities
Perhaps one of the toughest tasks for a COO is to balance operational imperatives with short-term requirements and long-term strategic needs. The pressure for short-term results is often extraordinary in many organizations. There, near-term gains tend to dominate critically important long-term programs.
Example: A COO needs to spare resources to meet quarterly financial requirements while sacrificing future projects which may boost the current operational efficiency. Research shows that as many as 70% of companies find themselves facing this situation. The fix lies in an actionable plan which guides short-term action with long-term objectives, so that short-term demand doesn’t unreasonably serve to stifle long-term growth.
Resource Allocation
For instance, proper resource allocation is another significant challenge to the COOs. They have to allocate the resources right from personnel and technology to finances to various departments and projects. Misallocation would call for inefficiencies and lost opportunities.
Statistics reveal that companies lose around 30% of their revenue due to ineffective resource usage. Effective data analysis is a mandate on the part of the COO in determining the optimum need for resources or areas where resources can be improved. This sometimes calls for a deep understanding of both the current system of operations as well as future trends.
Change Management
In the modern business environment, change will be a constant feature. Whether in the form of embracing new technologies, restructuring teams, or changes in market demand, the COO should effectively manage these changes. Employee resistance will be one of the greatest challenges.
Research has shown that 70 percent of all change initiatives fail to deliver the intended result for failure by employees to commit and buy into the initiatives. To combat this, COOs must develop adaptable cultures in their respective organizations. This is through transparent communications on changes and how they benefit not only the organization but also the individual himself.
Data Overload
Data drives decisions in this age, and COOs often end up drowning in information. Yet information can be very valuable; it can provide insight into operational performance, for instance. At the same time, too much information can lead to analysis paralysis-that stage at which decision-makers become overwhelmed with information and then are unable to make timely choices.
One such research example revealed that 60% of executives are experiencing an information overload, which in the result means an inability to move forward with clear action. To win over that challenge, the COO must focus on identification of KPIs relevant to his key business priorities. He would then only look through those details that would help him in taking decisions without losing their direction.
Talent Management
One of the greatest challenges still remains finding and retaining top talent organizations. Human resource management is perceived as indispensable for a COO to effectively manage these resources to ensure achievement of the set objectives. It can lead to disruption of operations and increased costs from recruitment and training of new staff in cases where there is high employee turnover.
Statistics have it that companies with high employee engagement are 21% more profitable than companies which work with low employee engagement. Therefore, the COOs have to foster an engaging workplace where employees feel appreciated and motivated at work. Besides this include chances for professional development and open communication channels.
Cross-Departmental Collaboration
Another key challenge for the COOs is to encourage inter-departmental collaboration. Departments can work in silos, without sharing their information and collaboration, leading to duplication and inefficiency of work.
Other studies show that organizations adopting teamwork collaboration are 25% effective to achieve the goals compared to those that avoid using teamwork. In an attempt to overcome the challenge of no teamwork and interdepartmental coordination, COOs must install team collaborative devices and have interdepartmental projects, which means promoting teamwork and shared goals for all.
Regulatory Compliance
Many businesses in a number of sectors consider compliance with regulatory requirements an essential part of how they conduct business and cannot afford to overlook it. It challenges COOs to ensure that their organizations pass the test according to current laws and regulations while at the same time meeting the operational goals. Failure to comply is very likely to lead to oppressive penalties and bring a company’s reputation crashing down.
A latest survey showed that 57% of firms consider compliance issues as the new normal in the dynamic regulatory landscape. COOs would have to keep abreast of regulatory changes and invest adequately in compliance training for their teams to overcome this threat. Preventive measures will then equip them with cushioning their organizations against some risks.
Competitive landscapes nowadays have very higher expectations than ever in today’s time. Today, customers demand quality products and good quality services delivered on time and with minimal possible waste. This makes the balancing act for operational management risky, delicate, and challenging for COOs.
According to research, 86 percent of customers are willing to pay more for a good customer experience. From this fact, one can assume the company’s operation strategy must focus more on customer satisfaction. The teams of COOs must be made to perform at the level to meet expectations with excellent service delivery.
The role of COO is highly demanding and full of operational priorities, hence problematic to manage. Among the list of such problems are short-term versus long-term goals, regulatory compliance, and response to customer expectations. The hurdles definitely seem numerous, but they can be overcome.
In this manner, the COOs would be able to overcome strategic resource distribution, organizational adaptability culture, interdepartmental liaison, and the role of employee engagement. Finally, successful operational priorities management works towards and beyond making an organization not just efficient in operations but also a company that aligns itself properly for sustainable growth over time in an increasingly dynamic business environment.