Difference between CEO and COO

Difference between CEO and COO

For those of you who don’t understand difference between CEO and COOin this article I will discuss it along with the definition of CEO and COO. CEO (Chief Executive Officer) has a unique role whose responsibility for fulfilling everything in the organization cannot be delegated to subordinate staff.

The CEO of a company must be able to identify resource needs, research sources to raise funds, formulate strategies for approaching lenders, present proposals, and deliver them. He manages the entire operation and effectively manages human resources.

Whereas COO (Chief Operating Officer) is the second highest-ranking official in the company after the CEO who oversees routine operations and reports to the CEO on day-to-day work.

Both the CEO and COO are assigned high-level responsibilities that have a major impact on the success and failure of the company. Well, this article I hope can help you understand the difference between COO and CEO.

Definition of CEO

Difference between CEO and COO-1

CEO (Chief Executive Officer) known as is the person in charge of the organization. Responsibilities are based on the nature, structure, type, and needs of concern. He is responsible for making corporate decisions, formulating and executing long-term plans and strategies, managing operations and resources. He acts as a communications liaison between the board of directors and the company’s operations.

CEO refers to the top executive in a corporate entity who is elected by the members of the company’s board. He is the one who enforces the strategy that is officially approved and accepted by the board and also ensures that the overall anatomy and processes of the company are in line with the strategic needs and culture of the organization.

The CEO is accountable to the company board and it should be noted that:

  • The role and job of the CEO may vary based on the size of the organization.

  • The CEO is responsible for the success and failure of the company.
  • CEOs should act and behave with honesty and sincerity while adhering to the organization’s code of ethics and values.

Definition of COO

Difference between CEO and COO-2

COO or Chief Operating Officer The company is one of the senior executives who is responsible for carrying out daily administrative and operational activities of the company. His job is to implement the business plan according to the defined business model.

The chief operating officer works closely with the chief executive officer (CEO) and chief financial officer (CFO) to develop the company’s annual operating plan to support the company’s long-term operational strategy.

In addition, he assists the CEO in overseeing the company’s achievements and also in maintaining a competitive position in the market. COOs have the power to maintain a positive work climate that is beneficial in acquiring, retaining, and motivating competent employees at various levels of the hierarchy.

Therefore, it is the COO of the company who:

  • Maintain and improve efficiency, cost effectiveness and quality in company operations.

  • The role played by the Chief Operating Officer (COO) varies from company to company. Large companies often have more than one COO to look after different lines of business and units. However, there are some organizations that have a single COO. He facilitates effective growth and also ensures operational efficiency and financial stability.

Difference Between CEO and COO

  1. Simply put, the CEO is the person who leads the executive team and oversees the day-to-day functions and work of concern, workforce, and resources. In contrast, the COO is one of the members of the company’s executive team in charge of handling regular operations and administrative functions.

  2. While the CEO is first in the chain of command, the COO is second in the chain of command.

  3. CEO, is responsible for company management in terms of setting and allocation of resources, overseeing operations, making company decisions, etc. while the COO looks after the day-to-day operations and administration of the business enterprise.

  4. A CEO must follow an authentic leadership approach as it focuses on the leader’s legitimacy and mission-oriented attitude. On the other hand, the COO must have extraordinary leadership, so that he can forecast and manage risks and crises before they arise, and make the right decisions for the business.

  5. The CEO of a company is expected to exercise oversight and management responsibilities throughout the organization to run the business effectively. At the same time, he is also expected to provide strong leadership both internally (to the world of work) and externally (to stakeholders). Instead, the COO should assist the company’s chief executive officer in building a sound organizational structure.

  6. The COO of the company is tasked with maximizing profits and customer satisfaction by ensuring that the company operates in the most efficient manner. On the other hand, CEO is responsible for maximizing the value of the company in terms of share price, market capitalization, revenue, profit, etc.

  7. As per the organizational hierarchy, the company’s chief operating officer reports to the CEO. Instead, the CEO is accountable to the company’s board for relinquishing his roles and responsibilities with the expectation that the CEO will continue to update the Board with all factors, events and conditions that may affect or have a significant impact on the business organization.

  8. In terms of work, the COO’s job is to implement the plans and strategies made by the CEO. Instead, the CEO formulates the company’s growth plans and strategies.

CEO Roles and Responsibilities

In general, the scope, roles, responsibilities and powers of the CEO are specified in the organization’s governance charter, along with the official job description in the employment contract. The roles and responsibilities of a CEO are discussed as follows:

  • Develop, plan, implement and integrate strategic directions.

  • Ensure that company leadership takes into account the internal and external environment.

  • Leading, directing, guiding, supervising and evaluating the work performed by subordinate executives.

  • Take advice and guidance from the company board, whenever needed.

  • Formulate a business plan strategy and budget for consideration by company directors and implement it.

  • Ensuring that the company’s operations and business are in line with the standards set by the board.

  • Inform the board of relevant developments in the company’s affairs, operations and business.

  • Recognize and manage risks for the company.

COO’s Roles and Responsibilities

The COO’s basic responsibility is to oversee the day-to-day operations of the company, including its various units, and divisions, according to the strategic plan and budget. The roles and responsibilities of the COO are:

  • Implement plans and strategies formulated by top management.

  • Manage issues related to financial growth and development, sales and marketing, research and development, production, purchasing, personnel, and so on.

  • Ensure communication, resolve conflicts and develop projects.
  • Develop a culture that encourages ethical practices, individual integrity and customer focus.

  • Identify ways to improve business strategy and increase productivity and efficiency in operations.

  • Formulate policies that propagate the company’s culture and vision.
  • Find areas of improvement and initiate change management across the business.

Conclusion | A CEO must have excellent business judgment, because only then will he be able to guide the team in correctly identifying problems, placing problems in alternative actions and selecting the most appropriate. On the other hand, the COO must have good organizational, communication and leadership skills, so that he can lead and guide the entire team.