Who needs a COO?
Who needs a chief operating officer? The thought crossed my mind as I noticed that Actelis Networks just named a new COO. Another Ethernet equipment vendor, Extreme Networks, recently eliminated the position. And when Adtran’s COO left last month to become Digium’s chief executive officer, Adtran told me they wouldn’t replace him.
The popularity of the COO as an office has bobbed up and down since its emergence in the 1960s, with about 30% to 40% of companies at any given time opting for such an office. Managing day-to-day operations, the COO frees the CEO to look at the big picture, dictating corporate strategy and eyeing acquisitions. That might make sense for any number of telecom equipment vendors, as strategy and merger-and-acquisition considerations might often be viewed as importantly as sales and manufacturing these days. But for a company like Extreme, whose recent past has highlighted execution woes, day-to-day operations might reasonably become more of a CEO priority.
It’s easy to see why especially large telecom companies might want a COO. For example, Verizon Communications added the post in December. But size alone doesn’t dictate the decision. Management guru Jack Welch eliminated the position when he led General Electric in the early 1980s, arguing that the CEO should be in charge of operations. In 2003, researchers at Penn State and Texas A&M argued that CEOs lacking experience in the management and operations of their firms are more likely to appoint COOs, adding, “CEOs who have COOs deliver lower organizational performance than those who do not.”
Nortel Networks’ CEO, Mike Zafirovksi, often described as “an operations guy,” does not have a COO. (He has a “senior vice president of global operations,” though these days, he might be questioning that decision.) Then again, neither does Alcatel-Lucent, whose CEO has more of a sales and marketing background. Her company’s current management structure was defined largely by its recent merger: Lucent’s COO became the combined company’s “chief administrative and integration officer,” and Alcatel’s COO chose his own title, “President of science, technology and strategy.” (I was never crazy about that title. If you’re given the rare opportunity to write your own business card, why not go with something like “Commandant of Awesomeness?” I already have that spelled out in decals on the hood of my Honda Accord.)
The COO “makes the trains run on time,” companies with COOs like to say. At other firms, someone else does it.
E-mail me at email@example.com.
P.S. With your help, I was able to report Ciena’s partnership with Ethernet-over-copper vendor Anda Networks more than a month before it was publicly acknowledged. Please keep those confidential story tips coming (dirt on a competitor or a former employer? I’m all ears); I will protect your anonymity.
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