Chief operating officers' time to shine

A second fiddle, supporting actor, or even a sidekick.

That is the way many people see the chief operating officer: little more than a secondary player in a company's success, behind the chief executive.

But the best chief operating officers bring a diverse set of skills - strengthened during the downturn - that are increasingly in demand within this region, experts say.

"Whether for hospitals or transport units, the chief operating officer is a very important mandate," says Russell Adam, the managing partner of CTPartners Middle East, an executive recruitment firm.

"Their organisational and management skills required to take a business to a new level are quite paramount."

These days more companies in the region have been switching gears from pursuing rapid growth to defending their core lines of business. That responsibility often falls to the chief operating officer, who keeps the business running smoothly on a day-to-day basis while the chief executive focuses on the broader vision and presenting a public face for the company. Organisations also lean heavily on their chief operating officers if they are required to restructure, which many firms in the region have done in the past two years.

Demand for qualified chief operating officers in the Gulf is projected to increase 20 per cent over the next two years, "and their impact within companies will also increase", according to a recent report from Stanton Chase International, an executive search firm.

Historically, when it comes to the position of a chief operating officer, "there has been a fixed mould of a role - clearly defined, and everyone operates within that," says Jonathan Swann, the chief operating and senior financial officer of JPMorgan in Dubai. "Increasingly, business is far more fast-moving. That adaptability and flexibility is important."

Nearly 60 per cent of leading businesses in the region already had a chief operating officer last year, according to Stanton Chase, which was up from only 40 per cent in 2005.

Not all leaders are convinced they need a chief operating officer for their business. During a recent business forum in Dubai, Abdulla al Gurg, the group general manager of Easa Saleh Al Gurg Group of Companies, said each of the business divisions within his company had its own operating officer and there was no need for a single, consolidated chief. "The chief operating officer's role is to make life much easier, and if he can't make life much easier then I don't think you should be hiring a chief operating officer," said Mr al Gurg.

But others say the position is more critical than ever in a business environment in which most companies are having to do more with less.

"You have three things in business: human resources, capital and technology," says Joe Barchini, the chief operating officer of global markets in the Middle East and North Africa region for Deutsche Bank. "We're going to be restricted on all three. To become more efficient, large corporations have to pool those resources."

Looking forward, chief operating officers can take comfort in data showing their prospects are looking up to eventually move out of the shadows of their bosses. Those chief executives promoted from within generated 4.6 per cent in shareholder returns last year compared with 0.1 per cent by "outsiders", according to research from Booz & Co. Another spot of good news: Chief executive tenure is also dwindling, with top dogs now holding their position an average of just 6.6 years, down from 8.1 years a decade ago.

nparmar@thenational.ae