Less than half of S&P 500 and Fortune 500 financial services companies now have a Chief Operating Officer (COO)*. As the industry continues to move at pace, will the COO continue to be the lynchpin of the financial services firm, or is the role in danger of buckling under the immense demands of complexity? Here, we speak to Simon Olenka, Head of Client Delivery UK at BNP Paribas Securities Services, about the results of our major new report The Future COO: Evolution or Revolution
What do you think the biggest challenge is for COOs today?
There isn’t one single thing. I think the challenge is finding the balance between all the different demands that we now face. We’re responsible for the traditional operational controls, managing the ‘production line’ and controlling budgets, as has been the case for decades. But now, the expectation is that the COO is an enabler of growth. She or he must generate change, and drive the organisation’s response to change, whether that’s arising from technology, competition or market dynamics. Of course, at the same time, the areas of regulatory compliance and governance also lie in our world – and those responsibilities are becoming more and more complex. So the job is demanding on about ten different axes – I am never bored!
With so many responsibilities, do you think COOs suffer from an image problem? Is the title ‘Chief Operating Officer’ part of this problem?
There’s a famous Buddhist story where a group of blind men hear that an elephant has been brought to town, but have no idea what an elephant is. Each one touches the elephant and each one comes away with a different idea – one touches the leg and thinks the elephant is like a tree trunk, one feels its tusks and thinks it is a spear, another touches its tail and thinks it is like a rope. The COO is a bit like this – the role can be so different based on the objectives and culture of the business. So the most important thing is that individuals in that role have clear responsibilities and accountability. The title should reflect what those are in their business.
I think one of the problems with the ‘Chief Operating Officer’ title is that it stems from the industrial age, when the COO was responsible for operating machinery or systems. It doesn’t reflect the passion we need for what we do, or the human element.
In our global survey of COOs, we found that in many regions ‘spending time with clients’ will become the most important factor for COOs in the future. I’m pleased that COOs across the market have this vision, because ultimately the role is about connecting external clients and internal staff. At BNP Paribas, for example, we’ve combined our operational, IT, change and programme management teams under the umbrella function ‘Client Delivery’, both at a global and regional level. My title sums up perfectly what we aim to do – to deliver above and beyond client requirements, including all of the internal investment and transformation necessary to make that happen. The added challenge is to do it in a commercially viable way
So what does the COO need to focus on in the future?
I think the COO role will focus on change management. The COO needs to enable real change by engaging and inspiring a wide audience of people to deliver on a number of common themes. Although business models and client requirements are changing significantly, at the end of the day, financial services firms provide people and technology, wrapped together by process. Very few things in our industry can be solved through technology alone. We can only derive real value by looking after our greatest asset, our people, by developing the right talent, coaching staff, and creating the environment in which people can harness technology and succeed.
In the survey, we found that COOs expect ‘upskilling the workforce’ to become the most important factor in future – above and beyond technology. Here in the UK, over the last 18 months we have really focussed on career development, through talent development programmes, career ‘surgeries’, and better definition and support of different types of career path. Traditionally, this might have been seen as something for HR departments, not the COO. But having the right people, with the right motivations and the right reporting mechanisms in place, is key to managing the business on a day-to-day basis. That frees you up to spend more time looking at the future, and delivering change.
Do you think we will see a new type of COO?
I think the future COO will need an even more commercial mindset – and not just focussing on short-term results and budgetary management (though these things will continue to be important, of course) – but taking a long-term approach to growth. Growth can come in a number of forms. It can come from new business, but it can also come from capacity creation; the future COO needs to be at the forefront of both. At the same time, future COOs will need to become even better communicators. I think communication skills, and the authenticity with which we communicate, is key to building trust. Trust builds collective motivation around functions, or tasks, or programmes, whatever they may be. Of course, it’s an essential life skill, but it’s especially important in a role where you’re managing large, complex teams and systems distributed across many countries, and this complexity will only increase.
So I guess the future COO will have an even greater juggling act. They will need to have a commercial mindset while being focussed on developing their people. They will need to be external-facing, attuned to clients’ needs, while also being internal collaborators and motivators. Are we ready to make this change? I think this journey has already begun – and I’m excited to see where it takes us.
*Volatility Report 2018, Crist Kolder Associates
The Future COO: Evolution or Revolution? will be published in February 2020