CEO and COO are two of the highest positions in an organization. However, people are often confused about the roles and responsibilities of the two organizational positions. While it is known that the CEO is the topmost position in an organization, the position of the COO is unclear and needs to be discussed in detail.
In this article, we will explain the roles of the CEO and the COO and how they are different from one another.
Definitions and explanations
CEO refers to Chief Executive Officer and is the highest position in the organizational hierarchy. The CEO is the person who is actually the leader of the company and manages the whole organization. The CEO develops the vision, mission, goals and objectives of the company and assigns responsibilities to relevant individuals for every task. In addition, the CEO is responsible for taking all strategic and macro-level decisions of the organization (such as expansion, retrenchment, new product development, etc.) and also for developing the organizational policies. All the individuals responsible for carrying out the operations of the company report to the CEO.
The board of directors of the company is the only authority above the CEO and they are the ones who usually provide directions to the CEO. The CEO is responsible for fulfilling the responsibilities and directives given by the BOD.
The CEO holds the entire responsibility for the success or failure of a company. In addition, the CEO functions as a link between the board of directors and the different levels of the organization.
The COO, or the Chief Operating Officer, is also a very important position in the organization. The COO is the person who comes after the CEO in the organizational hierarchy and also has a significant amount of responsibilities. The Chief Operating Officer manages the operations of the company. This task is also the responsibility of the CEO; however, in bigger companies, this role is shared with the COO.
The COO has to directly report to the CEO. The COO also helps the CEO in making decisions and gives recommendations on various matters. The COO may frequently have to work in close collaboration with the CFO (Chief Financial Officer), the CIO (Chief Information Officer), and other officers in the company to ensure that all the operations of the company are in sync with one another and are moving towards the accomplishment of the overall business objectives.
The work of the COO commences after the CEO has established the goals, plans and strategies of the company. The COO converts the vision of the CEO into actionable plans. Some of the tasks assigned to the COO are recruiting people and assigning responsibilities, communicating with the employees and ensuring that everyone comprehends their responsibilities.
In smaller companies, there may not be a COO, whereas the CEO may be the founder of the company or the chairman of the board of directors. When the company expands its operations and its procedures become more complex, they may need to incorporate the role of a COO who shares the responsibilities with the CEO and deals with all the internal operations.
Differences between CEO and COO
The key points of difference between CEO and COO are listed below:
The CEO is the person who is responsible for leading the organization and taking all important decisions for the organization. The COO serves as an advisor to the CEO and manages all the operational activities of the company.
2. Position in the organizational hierarchy
The CEO is the highest ranking position in the organizational hierarchy, while the COO is the second in command position in the organization.
3. Reports to
The CEO has to report to the board of directors of the organization, while the COO has to report to the CEO.
The CEO is responsible for determining ‘where’ the company is going, whereas the COO determines ‘how’ the company is going to achieve its goal. That is, the CEO establishes the vision and objectives of the company, while the COO helps in executing these objectives.
5. Accountable for
The CEO is fully responsible for the success or failure of an organization, while the COO is accountable for the performance of the organization on the whole.
6. Focus on
The CEO focuses on external issues by collaborating with external stakeholders, partners and investors. On the other hand, the COO concentrates on the internal matters by overseeing the operations of the various departments in the organization and making sure that there is proper and effective implementation of the policies and procedures of the organization.
7. Key responsibility
The CEO looks after the long-term vision and plans of the organization, while the COO handles the routine operations of the company.
All the companies that have CEOs do not essentially have a COO. For instance, in small businesses, CEOs frequently carry out the tasks of a COO on their own as the scope of the business is not extensive and can be managed by the CEO.
CEO vs COO – tabular comparison
A comparison of CEO and COO in tabular form is given below:
|The person who leads and manages the entire organization||The person who looks after the operations of the company|
|Position in the organizational hierarchy|
|Highest position||Second highest position|
|The board of directors||The CEO|
|Formulates the vision and objectives of the company||Executes the vision developed by the CEO|
|Success or failure of the company||Overall performance of the company|
|External matters||Internal matters|
|Oversees long-term plans and mission of the company||Handles day to day operations of the company|
|Always present||The post may be absent in small businesses|
Conclusion CEO vs COO
CEOs and COOs both have responsibilities at the highest level in an organization that have an impact on the overall success of the organization. CEOs are responsible for formulating the vision, mission and objectives of the organization, establishing a growth plan for the company and assigning individuals to important posts in the organization. CEOs depend on COOs to monitor the routine functions and operations of the company and ensure that the vision established by the CEO is being achieved. Therefore, both functions are critical in organizations.