For any COO to be successful in the AEC industry today, they must embrace the soft side of leadership, focusing on the people and culture as much as the numbers.
In January of this year, I took on the role of chief operating officer at SCS Engineers; I am the first COO in the company’s history. I’ve been in the environmental services industry since 1990 and have worked for both large national/international firms and small firms, and I started and ran a successful consulting business before selling it to SCS in 2012. At least one of the two national companies I worked with prior to SCS employed a COO, but I moved on from there more than 20 years ago, so I’ll admit my experience with a COO is somewhat dated.
Perhaps it’s just me, but I developed this picture in my mind of a COO as someone who just focused on financial performance – who drove the numbers, who managed using a command and control style, who was the bad cop to the CEO’s good cop persona. The COO is the hammer that needs to get unleashed every once in a while to get things back on track, right?
Well perhaps it’s because I’m a bit longer in the tooth as they say, or because I now find myself in the role, that my perspective on the COO in our industry has changed significantly. As I’ve held several roles in my career (from project team leader, founder of a company, and senior vice president of a national firm), I’ve realized that driving numbers is not a great way to run and sustain a healthy business. Financial success is an outcome, a lagging indicator, of getting the leading indicators right – think employee engagement, resource sharing across functions, client satisfaction, and company culture to name a few. And that’s where a COO can really help a business. Sure, there may be times when a quick turnaround of the company or a branch is necessary and the COO may be the right person for that job, but for the most part, the COO can play an instrumental role in making the aspirations of the company a reality.
Now before explaining a bit more of what I mean, I have to say that the COO role may look quite different from firm to firm. I think that’s because the COO is often the person in the C-suite that compliments the other company leaders. If the CEO is an outward (client) facing persona, the COO would likely focus inward – which is probably how most think of their partnership, but the roles can certainly be reversed. Or the C-suite may decide to simply work as a team and divvy responsibilities to meet the strengths of each member, so the COO may need to be somewhat of a chameleon. The COO should be able to flex his/her strengths to compliment the others in the C-suite.
But there’s one thing that is typical of the COO’s focus: It is to implement the company’s vision. The COO works with other leaders/managers in the firm (think of your regional or branch managers or market or service area leaders) to develop strategies by which the company’s mission, vision, and values are expressed in day-to-day work.
For example, many firms in our space today are likely focusing on employee engagement. Given the tight labor market, recruiting and retaining the best in the industry and maintaining low turnover of desired employees – a good leading indicator – can differentiate a company from its competitors and lead to the profitable growth that most firms desire. So to that end, the HR department may be working on a training program for supervisors, to demonstrate the benefits of coaching, checking in, and helping develop their direct reports. And the IT department may be working on acquiring or developing new systems to enhance a managers’ ability to resource share, predict hiring needs and enhance the quality of deliverables. Now think about how many IT system roll-outs or HR training programs have yielded little adoption or no meaningful behavioral changes. That’s where the COO comes in. They can function as the bridge between HR and IT and the client-facing staff (who are already overwhelmed with work, by the way) so that the training and systems that are developed are realistically implementable, given the inherent competition for one’s time.
So as in the above example, and as is true with much of what the COO does, he/she must be able to thoroughly understand the firm's KPIs, diagnose what may be contributing to say a poorer than expected outcome, move upstream, and pull the levers that will positively impact performance, and that KPI. In other words, the COO influences the leading indicators to result in positive lagging indicators.
Of course there are a lot of other areas the COO is likely to get involved in, but for any COO to be successful in our industry and in today’s environment, they must embrace the soft side of leadership, focusing on the people and culture as much as (or more than) the numbers. After all, a COO with a great spreadsheet of financial metrics won’t lead a company to financial success, but engaged and supported people in a healthy company will.
Eduardo Smith, P.E. is chief operating officer at SCS Engineers. Contact him at esmith@scsengineers.com.