The C-suite is one of the most important levels of any organization. It’s composed of senior executives who understand the core competencies of the organization and influence every major decision that is made.
One of the corporate executives essential to the C-suite is the chief operating officer (COO). As the individual who oversees the daily operational functions of a business, their expertise and actions are critical for the success of a company. Let’s explore more about the average COO salary, responsibilities, and career path.
CEO vs. COO: What’s the difference?
CEO, CFO, CMO, and COO are all senior executive positions that, while sounding similar, have very distinct roles. Two positions that are often confused are the chief executive officer and chief operations officer. It’s easy to see why, as both are equally important positions that oversee critical functions throughout their organizations.
However, chief operating officer jobs differ in their responsibilities and hierarchy within the company. Job site Indeed explained that the first thing to understand about the two roles is their position at the organization. While both are part of the C-suite, the CEO is the most senior and highest-ranking executive in the company. The COO is considered the second-in-command and always reports to the CEO.
Their roles also differ. Indeed described the COO job title as being an “architect of business management.” These executives have the decision-making power to coordinate budgets, create strategies, mitigate risks, and manage costs to ensure the company is growing. Overall, the COO focuses on the internal operations of the business. They continually assess performance, delegate tasks, and make recommendations for how to improve the business.
The CEO, on the other hand, makes top-level decisions that impact the short- and long-term future of the company. They directly oversee high-level corporate strategy development and can delegate tasks to other senior executives, which is especially common in larger companies. Some of their common responsibilities include developing and executing company strategies, consulting with the board of directors, and communicating with stakeholders about the health and future of the organization.
Both the CEO and COO are critical to an organization’s success. Their different roles ensure that the company is setting measurable, attainable goals and taking the necessary actions to meet them.
COO Salary Expectations
As part of the top-tier of an organization, a COO’s median salary is quite large. According to PayScale, the national average chief operating officer salary is $144,327. But like many other jobs, where a COO lives and the cost of living can affect their pay.
Indeed broke the average salary of a COO down further, and found the top five highest-paying cities in the United States for this career are:
- Indianapolis: $179,939
- Chicago: $159,980
- New York: $157,163
- Washington, D.C.: $153,715
- San Diego: $128,012
A COO can expect a base salary between $120,000 to upward of $150,000, depending on their location and size of the organization. Compared to other members of the C-suite, their salary is rather competitive. On average, a CEO makes the most of any C-level officer, as the position typically starts around $156,000, but can reach $300,000 or even $700,000 at well-performing organizations. In some cases, CEOs’ base compensation is measured in millions. As the second-in-command, the COO typically makes the next highest salary at the organization, followed by the chief financial officer, chief information technology officer, chief marketing officer, and so on. Additionally, CEOs and COOs also have other major opportunities for compensation, including cash incentives and stock awards.
Qualifications and Skills of a COO
The chief operating officer is one of a company’s leaders and has the power to make strategic decisions. Holding this much responsibility means there are stringent qualifications and skills required for this position.
The first thing many employers look for in a COO is their educational background and years of experience in a relevant organization, which will be discussed in more detail further on. Then, they evaluate an applicant’s hard and soft skills to see if they meet the requirements of the position and what the company needs.
According to The Balance Careers, these are some the skills a COO candidate must have to be considered for the position and excel at their job:
Leadership: As an essential member of the C-suite, a COO must be able to effectively manage, lead, and supervise teams to ensure operations are optimized. Getting an MBA can help individuals who hope to become executives hone their leadership skills through practical coursework and experiential learning.
Strategy: After leadership, strategic thinking is the most important skill for a COO to possess. They must understand organizations’ workflows on both a broad and granular level to see where improvements can be made to enhance efficiency. This requires being open to new perspectives, creativity, and time management skills.
Management: This encompasses many different skills rolled into one. From decision-making to delegating, a COO needs to know how to manage teams. This also includes strong time management skills, as a COO must make decisions and delegate tasks quickly and be flexible enough to adapt to changes and pivot strategies.
Communication: A COO must possess executive-level communication influencing skills. Not only do they lead and inspire internal teams to do their best, but they are also required to frequently communicate with stakeholders. It’s important to know how to build consensus with a team of diverse employees and stakeholders, which requires strong negotiation and mediation skills.
On top of these skills, a COO should have a solid understanding of major business operations. From finance and marketing to the supply chain, having a track record of successfully working with or managing these workflows is highly desirable to employers.
How to Become a COO
A COO career path requires a combination of education, experience, and certifications. The first thing necessary to become a chief operating officer is a degree. Indeed explained that a bachelor’s degree in business or a related field with a focus on management is required by many organizations.
However, a Master of Business Administration is preferred for this position because of the expertise needed for an executive role. An advanced degree in management shows employers that the applicant has foundational knowledge of business operations and the aforementioned skills polished through coursework.
Additionally, it’s essential to have considerable tenure in the industry or field in which the organization operates. It’s widely accepted that a COO should have at least 15 years of experience, with five of them spent in a senior management role. Ideally, the COO has already worked their way up through the company ranks to be eligible for this position. Hiring internally for an executive position puts employers at ease, because they understand the applicant’s strengths and weaknesses, skills, and track record at the company. Similarly, someone from inside the company may already have a professional working relationship with the CEO, which can smooth the transition into the new role.
When seeking an outside hire for this role, an applicant must showcase their experience working in the field along with an impressive portfolio and professional references. In this scenario, it’s likely an organization is seeking a COO from the outside because it wants a fresh perspective, so it’s important for an applicant to highlight their experience and ideas about leadership during interviews. The same is true for applying to this lucrative position at an international organization.
Finally, there are some certifications to consider for this role. While not a requirement for the position, gaining a formal certification in operations management from an accredited course can help set a potential COO candidate apart from other applicants. Each COO may have a unique career path, but these are some of the general steps they can take to secure an executive position.
An MBA Is Essential
Earning a Master of Business Administration can help kickstart the trajectory to an executive role for aspiring COOs. Gaining MBA-level expertise can help unlock new opportunities in the industry or growth within a company.
The Online MBA at Northeastern University prepares professionals to become organizational leaders in the modern business world. Hone your skills with innovative, experienced-powered business education at times that are flexible for your busy schedule. To learn more about the Online MBA program, contact an enrollment advisor today.
The Benefit of Earning Your MBA Online