If you’re thinking about being an executive in a company, it ‘s important to make a clear distinction between the roles of the CEO and the COO. The CEO and the COO are also high-ranking executive roles within an organization and work together to maintain company growth and maximize business profits. However, there are some variations in their work roles and aspirations. In this article, we will discuss the differences between the CEO and the COO.
What is a CEO?
The CEO is the Chief Executive Officer. He is the highest-ranking individual in the company. CEOs set corporate goals and make strategic decisions ( e.g. expansion to a new market or launch of a new product).
CEO is responsible for optimizing business value by defining the vision, long-term objectives, framework and direction of the company.
The day-to-day roles of CEO differ based on factors such as the size of the company and the field in which the company operates. The larger the company, the more likely it is that the CEO would commit considerable amounts of time to create a long-term plan. CEO of publicly traded corporations must respond to boards of directors and work to optimize their shareholders’ return on investment. For small to medium-sized businesses, the CEO can become more involved in the day-to-day running of the company.
Typical Responsibilities of a CEO
- Executing overall corporate strategies
- Consulting with the board directors
- Keeping oneself up to date with the market environment, expanding opportunities, increasing business competitiveness and advancing technology in the industry
- Monitoring and evaluation of all risks and preventing any loss and damage to the company
- Participate in every industry-related event to improve leadership skills, develop the reputation of the company and increase the company ‘s capacity for success
- Developing and setting strategic business goals which can be calculated, achieved and defined
What is a COO?
The meaning of COO is Chief Operations Officer. It is to the CEO’s second-in-command. COOs are taking the company’s vision from the CEO and transforming it into an operational business plan. They supervise all activities and ensure employees are working towards the goals of the company.
The roles of the COO differ by size and form of company. COO also works on the strategy with the CEO and other C-suite executives. The most common duties of the position of COO include managing day-to-day administrative activities, various business functions, and critical projects.
Typical Responsibilities of a COO
- Coordination of budgeting and financial planning with the stakeholders
- Planning and creating a market strategy plan to ensure growth and reduce the risk
- Managing costs and expenses, and designing tactical strategies to reduce the loss of profit
- Monitoring the audit of company income and expenditure
- Reporting correct financial performance;
- Delegating tasks to employees to ensure that all staff work well
- Developing business policies that promote a positive corporate culture
- Oversight of the internal activities of the company and the efficiency of other executives
- Evaluating performance by analyzing data and developing business metrics
- Managing partnerships with business partners and actively engaging in growth activities such as recruitment, acquisitions and company negotiations
- Report all the important matters to the CEO
- Hiring top talent and preparing teams for success
Who is Higher: CEO vs COO?
The CEO; is the highest position inside the company. In the hierarchy, the COO comes second and reports to the CEO. The CEO may report to the board of directors, the investors, or the company’s owners, depending on the company’s structure.
Small companies do not have a COO at all, while the CEO may be the company’s founder (or one of the founders) or the board president. When companies expand and have more complicated procedures, they can need to employ a COO to advise the CEO and oversee all internal operations.
COO vs. CEO: What are the differences?
⦿ Job responsibilities
CEOs concentrate primarily on the overall long-term implications of operating an organization while COOs concentrate on the organization’s actual activities and financial position. Although COOs are permitted to make their own decisions on matters under their jurisdiction, the CEO still has the power to alter the COO ‘s decisions if necessary.
⦿ Corporate ranking
The major difference between a COO and a CEO is within an organization’s structural ranking. In an organization, the CEO holds the highest rank, and the COO reports to it. Most significantly, the CEO is the company’s manager and makes the final decisions about the business’ future, while COOs can only provide guidance based on the firm’s operations.
⦿ Shares and ownership
While not always the case, many CEOs either own the business or are the company’s owners, if not the main shareholder. Nevertheless, COOs are less likely to be the largest shareholder within their organization.