Top 13 Strategic Priorities for the COO in 2024

1. Operational excellence in manufacturing: Leverage automation

In the context of manufacturing, operational excellence refers to the ability to consistently achieve high levels of productivity, efficiency, and quality when producing products. Automation is an excellence enabler here—companies that automate rote, manual tasks usually reduce human error and costs while increasing production speed.

But while automation is often associated with factories, COOs in other industries know that software-based automation can drive significant operational benefits by performing repetitive tasks with fewer errors, automatically reconciling accounts, gathering data, and flagging discrepancies early on.

2024 action item: Build automation into planning for all new processes. To determine if a process can be automated, weigh variables such as frequency, predictability, process repetition, and data availability. Champion automation as a strategy to lower costs while improving quality and productivity.

2. Holistic supply chain enhancement: Address supply chain optimization

After years of unprecedented disruption, supply chains may finally have some slack. Vincent Clerc, CEO of the global shipping giant Maersk, told Bloomberg TV that the company’s freight volumes fell by 9.4% in the first quarter of 2023. Its freight rates also dropped by 37% compared to where they were in 2022. Clerc attributed this shift to a “normalization” following “the extraordinary circumstances with COVID and some of the disruptions that we saw in the supply chain” that will also lead to “a normalization of prices.” While that may not be great news for Maersk’s projected revenue, it’s a welcome return to stability for COOs who’ve dealt with scarcity-driven shipping rate spikes for the past few years.

Companies that went into the pandemic with diverse suppliers and well-developed forecasting and scenario planning capabilities fared better than most. Now that things are on a more even keel, COOs can shift from survival mode to supply chain optimization.

2024 action item: Focus on identifying and fixing remaining bottlenecks and further reducing costs by, for example, renegotiating contracts with suppliers, distributors, and logistics partners. Bring advanced technologies such as artificial intelligence (AI) to bear to improve forecasting and demand planning, as well as risk management and contingency planning.

3. Enhanced customer experience: Integrate AI

AI capabilities aren’t limited to forecasting and demand planning. They can also help eliminate, or at least reduce, the need for Level 1 customer support agents and assist human support staff by quickly generating details on customers’ purchase histories and previous interactions. AI-driven technologies such as chatbots, virtual assistants, and personalized recommendation engines also make it easier for customers to find information, get upsell advice, and complete purchases on their own.

Don’t scoff at chatbots, in particular. Today’s bots understand and respond to complex queries, have expansive conversational abilities, can integrate with applications such as ERP and CRM for more personalized experiences, and employ advanced ML algorithms for continuous learning and improvement.

While the benefits are clear, integrating AI/ML can be a complex conversation that requires buy-in from a range of departments, including HR, IT, and finance. This is a top-down initiative, and the COO is often both a leader and liaison.

2024 action item: Support the CIO in efforts to stop a new wave of AI-driven shadow IT. Advocating for an AI center of excellence or competency center is a great way to ensure that AI systems purchased are aligned with the company's goals, can be integrated into existing processes, and are measured for effectiveness using agreed-on KPIs.

4. Seamless workflows: Improve application integration strategies

Systems that produce and consume data should use a common taxonomy. That’s not to say that COOs should encroach on the CIO’s territory, but they do need to consider the impact of disparate systems and data streams on workflows. For example, data produced by inventory management and supply chain management systems should be easily accessible and digestible by sales enablement so that sales teams, customer support teams, and customers themselves can get real-time product availability information.

A single source of cross-business data offers a path to operational excellence, but establishing that source requires that applications across departments can talk to one another. Consider a chain of communication involving an email marketing application, a marketing analytics tool, and a customer experience or CRM system. The email application tracks metrics on a campaign’s open rates, click-through rates, bounce rates, and conversions. To calculate ROI, the marketing application compares those results with social media, SEO, and in-person seminar campaigns. The CRM calculates how often leads transform into customers and compiles campaign information into a report so a CMO can evaluate customer acquisition costs and determine success metrics for future budgeting.

Manually linking these individual applications can involve a laborious data export/import process that may require reformatting and data cleansing. Companies can bypass these hassles by deliberately choosing applications that can be integrated, thus saving all departments time and effort. Doing so also eliminates the need for extract, transform, and load (ETL) operations for departments that may want to peruse the data but aren’t involved in the direct workflow.

2024 action item: Work with peers to create a framework that allows applications from across the organization to communicate seamlessly. Tactics could include adopting a cloud-based integration platform or setting up a data lake—a central repository that stores large amounts of raw and structured and unstructured data in its native format. The win for COOs is that a data lake negates the need for predefined schemas or data models. You can pull in customer data, transactional data, sensor data, social media data, log files, clickstream data, and more. Your data lake supports advanced analytics for data-driven decision-making based on a complete view of your business. Now, all departments can work from a common data set, improving accuracy and facilitating broader analysis and deeper collaboration.

5. Organizational integrity: Invest in proactive cybersecurity

While security may not normally be seen as the COO’s purview or area of expertise, protecting systems, physical assets, and data is everyone’s responsibility. Cybercrime, attacks on critical infrastructure, and emerging technologies will be among the biggest security threats in 2024, according to the Department of Homeland Security's (DHS) 2024 Homeland Threat Assessment report. DHS specifically cites attacks against the energy, communications, and public health sectors; ransomware; and AI-developed malware deployed against critical infrastructure.

Remote work has increased organizational vulnerability to such attacks by requiring many more connection points into internal systems. COOs have an opportunity to work closely with the CIO and departmental stakeholders to determine how to balance cybersecurity with the needs of the business. As part of a comprehensive approach to cybersecurity, these conversations should include employee/device access, encryption strategy, disaster recovery plans, software updates and patching, and educating staff on red flags and common fraudulent ploys.

Given the increasing sophistication of physical breaches, companies are likely to prioritize robust security systems that incorporate artificial intelligence, employee education, facial recognition, and biometric authentication in 2024.

This is a COO-level priority because, despite popular media coverage of back-to-the-office initiatives, some level of remote work is now the norm for roles where it’s supported. Hiring managers need to know that their company can support this program. And facilities teams need guidance from security teams on new access control capabilities.

2024 action item: Advocate for striking a balance between the wants of different stakeholders, budgetary realities, and the latest cyber and physical threats. Consider a collaborative approach to evaluating risks, assessing compliance, and evaluating cybersecurity vendors—with an eye to that data integration we just discussed.

6. Flexible and robust business models: Build agility and resiliency into processes

We’ve already touched on disaster recovery and scenario planning, which are resiliency must-haves that COOs can lead. But we’d also argue that slightly squishier priorities, such as fostering a culture of adaptability and continuous improvement, are important. As you optimize processes, make sure they’re flexible enough to respond quickly to changing market conditions, customer demands, and internal challenges. For example, what happens if you’re hit by ransomware, you lose your biggest customer because a competitor slashed prices, or a key supplier goes out of business?

Using the supplier example, integrated data offers tracking, accurate updates, and alerts on bottlenecks and inventory shortfalls and overstocks. A diverse pool of vendors, manufacturers, and logistics providers keeps organizations resilient in the face of unexpected hurdles because they can pivot to previously vetted alternatives.

By incorporating methodologies such as lean manufacturing or Agile project management, COOs can enhance their organization's ability to adapt to unforeseen circumstances. The pandemic laid bare which companies had brittle processes that prevented them from pivoting to new business and work models. The COO can ensure the organization doesn’t forget these hard-learned lessons.

Then, there’s the human element. COOs can identify employees, suppliers, and partners who demonstrate resilient thinking. Recognize them, document what makes them agile, and explore how best practices can be replicated.

In the 2023 World Economic Forum’s Global Risks Report, 69% of surveyed business leaders projected that the following two years would be “consistently volatile across economies and industries.” In an age of volatility, enacting an effective resilience strategy means cultivating a top-to-bottom culture of agility, integrating diverse resource options for tasks and processes, and adding repeatability wherever possible. The COO can help raise this priority across the organization.

2024 action item: Agility and resiliency have emerged as make-or-break qualities, and they go far beyond supply chains. Is HR adapting to changing employee expectations? Does marketing have systems to track and react to shifting customer sentiment? Can IT failover quickly in case of a natural disaster? To get these answers and set the stage for success in 2024, COOs should map business processes across the organization and assess them. Which are flexible, which can pivot with some effort, and which are set in stone?

7. Scalability and efficiency: Embrace cloud adoption

Cloud is the future for most applications. Per the PwC 2023 Cloud Business Survey of 1,010 US business executives, 97% say cloud technology has increased productivity within their organizations. For COOs, cloud adoption is a win-win-win that creates benefits across processes, budgets, and infrastructure. In addition, cloud services can forward a number of the priorities we’ve already discussed. Moving to the cloud helps businesses aggregate and use data from multiple sites, warehouses, and outlets for a holistic operational picture. That’s a big deal for supply chain and inventory management in enterprises.

Still, some areas, such as IoT in manufacturing, require a local component for performance reasons. Edge computing refers to the practice of processing and storing data close to the source and limiting the data sent to remote cloud data centers. This localization allows for faster data processing and reduces latency, as data doesn't have to travel over potentially long distances. Edge computing is especially useful in scenarios where real-time data analysis and decision-making are crucial—such as manufacturing. Keeping computing power close to devices can also improve security and use less bandwidth.

COOs have the perspective to advise on cloud adoption where it adds efficiency—that is, most applications used by employees—and where keeping workloads on-premises makes more sense. The cloud can also deliver a more stable total cost of ownership (TCO) by shifting costs to trackable operational expenses and reducing capital investments in real estate and compute infrastructure. Meanwhile, a steady TCO equips COOs with predictable numbers as they engage with other departments on their technology needs. Embracing the cloud also makes data integration easier and often improves security and resiliency.

2024 action item: Commit to observability—that is, the ability to monitor and understand the internal workings of a system or process by collecting and analyzing data from various sources. Greater observability enables COOs to intelligently advocate for cloud versus on-premises because they understand, at a granular level, system reliability and performance levels.

8. Holistic talent management: Focus on employee lifecycle and success

An organization is only as effective as its people. Thus, a primary priority for the COO is to empower the organization to recruit, engage, and retain top talent. Determining how best to accomplish that, though, requires the constant assessment of many variables, such as local and global industry shifts, technology capabilities, and financial realities. Bringing all these pieces together is a job for the COO.

An agile approach to talent management means preparing for both foreseeable trends, such as embracing people-centric cultures that promote work-life balance, and unexpected shifts, such as a sudden need to open a new location and provide remote connections.

COOs can help HR managers by championing the adoption of tools that enable secure remote access for employees who are able to work from home. We’ll explore the company culture aspect in a moment.

2024 action item: Go back to school, figuratively. Top COOs continuously monitor their markets for shifts and trends. One way to do so, per McKinsey, is being aware of, or influencing, new courses universities and other educational institutions are offering. Often, this is a closed loop process. An industry helps faculty members understand what they need, and the curriculum changes accordingly. Besides identifying emerging trends, understanding what your future employees are learning can help you predict innovations and products that may emerge.

9. Improve work environment and culture: Foster collaboration

Because COOs typically report directly to the CEO, are high in the chain of command, and are focused on internal operations, they’re well situated to drive cultural shifts—including those that affect hiring and retention. Think giving employees more of a voice, working with HR on user-friendly scheduling, encouraging management to offer greater transparency, and bringing departments together on matters such as workforce flexibility. These types of changes can improve an organization’s reputation among potential hires, leading to recruitment of stronger talent.

Take that educational insight we discussed and use it to inform a continuous training program. Continuous training refers to the process of acquiring new knowledge, skills, and competencies in your field or profession on an ongoing basis. Staying abreast of the latest developments and trends is a big part of that. The payoff for continuous training is that it helps employees adapt to changing technologies, ensures they grow in their roles, and encourages curiosity across the board, which can translate to more effective collaboration, too.

When it comes to collaboration among staff and between departments, though, it’s all about having the right technology. New work patterns have made it harder to gather everyone in a conference room. Now, top COOs are advocating for broader use of digital tools including internal messaging apps, shared data repositories, and spreadsheets and documents that allow for real-time group editing.

Of course, collaboration goes beyond technology that helps coworkers get the job done. It also requires an environment and a culture of working together toward a common goal.

Culturally, HR can attest to the fact that healthy boundaries reduce burnout. In an always-on world, it’s easy to send messages, open documents, and work all the time. COOs can help by suggesting guardrails. For example, if someone sends a question over email at 10 p.m., the receiver might get a mobile device notification and feel pressure to answer. This can create ill will and anxiety, so a healthy collaborative culture requires a solid understanding of what is expected, what is needed, and when it’s okay to turn off. That builds trust, camaraderie, and a willingness to step up when needed as a team.

How does a COO get an organization to embrace the best practices necessary for a culture of collaboration? That requires its own form of collaboration. The COO must first engage with the CTO, CIO, HR, and other executives to demonstrate the role of organizational infrastructure as a driver of collaboration.

2024 action item: If your company doesn’t yet have a formal mentorship program, consider spearheading the effort. Work with HR to establish a structured framework for the program, including guidelines for mentor-mentee matching, communication channels, expectations for participation, and a plan for promotion and recruitment to attract both mentors and mentees. When HR pushes for mentorships, it can be seen as self-serving. When the COO champions this program, the organization-wide benefits become more apparent.

10. Strategic governance: Engage the board actively

Many of the previous points cover technological investments, operational processes, or organizational culture. Such systemic changes require buy-in from across the organization, including, often, the board of directors.

COOs are instrumental in helping board members grasp the full scope of operating challenges, going well beyond the targeted agendas of CMOs and CFOs, who often get more visibility with the board. COOs can explain the potential benefits of a new technology across the full breadth of operations and why certain investments can lift the company in a variety of ways.

Forward-thinking COOs are proactive with their boards of directors, engaging with them both as a group and in targeted working sessions on the committee level.

2024 action item: Improve your relationship with the board of directors by forging some one-on-one alliances. Your board has a fiduciary responsibility to shareholders to ensure corporate governance is properly maintained, so they’re going to be interested in the COO’s perspective. Your CFO has likely already made headway here.

11. Operational performance: Streamline processes for efficiency

Two buzzworthy, and related, trends for 2024 are reducing technical debt/IT modernization and prioritizing repeatability and scalability. Both are pathways for COOs to help their companies perform more efficiently.

Both are also easier said than done, of course. Let’s look at each.

Technical debt refers to the accumulation of shortcuts, outdated software, and poor IT design that can hinder future development and increase maintenance costs. IT modernization is the ongoing process of finding those issues and updating your infrastructure to handle changing customer expectations, business goals, and regulatory requirements. Changes may be incremental, or they may be transformative. The key is to keep moving forward so your tech delivers a competitive advantage.

COOs are natural proponents of prioritizing repeatability and scalability. Repeatability refers to the ability to replicate a process or task consistently and accurately, so that a particular action or procedure can be performed repeatedly with the same—desirable—outcome. In any organization, repeatability equals consistent quality, efficiency, and productivity. It also minimizes errors and improves customer satisfaction.

Repeatable systems and processes are inherently scalable and able to expand and adapt as needed without sacrificing performance or efficiency. Scalability enables companies to serve ever larger volumes of customers, manage growth, and seize new opportunities.

2024 action item: Challenge all employees to rate processes on repeatability following a simple, three-step process. 1. Define the desired outcome of the process. 2. Identify the specific tasks, resources, and roles involved. 3. Document the process step by step, including any guidelines, templates, or checklists required to execute the process. This effort will shine a light on brittle, outdated ways of working.

12. Technology-led operational framework: Pivot toward digital transformation

It’s another buzzword, admittedly. But an effective digitization plan is important, and it starts by identifying specific areas where new technology could cut costs, improve quality, increase growth, help customers, create new products, or otherwise drive business success.

Championing digital transformation can’t be just the CIO’s job, either. Top COOs take the lead through collaboration—with IT departments, to understand the current tech landscape; with CFOs, to understand budgets and investment plans; with HR, to understand pain points for employees; and with departmental leaders, to identify their unique operational needs and goals.

Successful digital transformation is a long-term, continuous process. Thus, the COO faces several parallel issues. They are the champions of digital transformation, yet they must balance practical factors such as budget and legacy tools. They back the CIO in adding innovative new tools, while getting staff and management to embrace change rather than fear it. This delicate balancing act requires COOs to do more than simply embrace the notion of digital transformation. Short-term budget considerations and company culture must be weighed alongside long-term strategies that factor in evolving technologies and a changing business landscape.

2024 action item: Be the voice of the buyer by questioning whether new digital initiatives, such as AI and advanced automation, not only align with the organization’s strategic goals, but actively benefit customers. Delivering for buyers requires bringing many different parts of the organization together, so centering the customer in discussions about new tech initiatives is a good standing practice for COOs.

13. Innovative product development: Evaluate and support new offerings

COOs play a crucial role in product creation, from conceptualization to development and launch. They provide strategic direction, ensuring that the product or service aligns with the company’s objectives. They pull together cross-functional teams to set pricing strategy, plan for resource and budget allocations, and determine hiring needs. COOs also monitor market trends and customer feedback during the product creation process.

Product development trends for 2024 include a focus on innovation, sustainability, and personalization. Experts point to emerging materials and manufacturing techniques that will enable the production of eco-friendly and biodegradable products, as well as the use of AI to create personalized products and experiences.

2024 action item: Get out and do some product research by walking around, exploring not just your own plants, but visiting your top buyers or retail outlets. The pandemic and a resulting shift to remote work have made in-person interactions of all kinds less common. Prioritize face-to-face conversations with your buyers to get a clear sense of their needs and concerns. Let 2024 be the year you, as COO, take the lead in speaking for the customer internally.