3 COO Challenges That Decide Whether a Company Survives

In this episode of Rozmowy Logistyków, Piotr Skobało and Adam Sobolewski discuss three challenges facing a Chief Operating Officer (COO). They share observations from working at different organizations about how the COO role differs from an "ordinary" operations director.

HOW A COO DIFFERS FROM A HEAD OF LOGISTICS OR PRODUCTION

The scope of a COO's (Chief Operating Officer's) responsibilities varies drastically between companies — from someone managing logistics, customer service, and after-sales, to a director with 20 other plant and quality directors reporting to them at a company with a dozen-plus manufacturing sites worldwide. The key difference from a CEO: the CEO creates and sets the company's strategic direction, and the COO translates that direction into concrete operational processes — this is a board-level role (reflected in the company register), not just a management position.

CHALLENGE 1: SYNCHRONIZING STRATEGY WITH OPERATIONS

Every sales strategy looks beautiful on slides until it has to be translated into concrete processes — "let's raise NPS by 20%" means real changes in logistics, production, and customer service that have to be phased in over time and evaluated for return on investment. Organizational silos are the main enemy here: an example from the appliance industry, where a project to "slim down" the styrofoam packaging on refrigerators saved 2 euros per unit (at a million units: 2 million euros visible on the P&L), but generated 3-5 million euros in additional supply chain costs from transport damage — costs invisible to the person optimizing only their own slice of the process. A similar case: switching to a 2-eurocent-cheaper closure on a powdered soup sachet caused the packaging to tear open during opening, translating into tens of millions of euros in lost sales across Europe — an effect invisible at the moment the production decision was made, because no one looked at the whole value chain.

CHALLENGE 2: TECHNOLOGY AND AUTOMATION AS A TOOL, NOT A GOAL IN ITSELF

The COO is the business owner of the automation and digitization process — they're accountable for the impact on productivity, quality, and cost, regardless of whether the decisions concern software (the CIO/CTO's domain) or hard automation like conveyors and AGVs. The split of responsibility is roughly estimated at 50-55% on the operations side and 45-50% on the technical side — because it's the COO, not the IT department, who's later held accountable for the results a given investment was supposed to deliver. A key discipline: investments without a return within a year (i.e. not "obvious" ones like an automatic labeler) require a documented, a priori business case with specific assumptions (volume, order flow, expected ROI) — because when assumptions don't hold up (e.g. infrastructure was planned for 30% growth, but the company saw a decline), you need a written record of the basis the decision was made on. Wage growth of around 50% in recent years has fundamentally changed the economics of automation — projects that didn't pay off a few years ago are starting to pencil out today.

CHALLENGE 3: MANAGING TALENT AND OPERATIONAL TEAMS

Even fully automated supply chains need people to run them — and picking a competent team can matter more than the processes or technology themselves. Examples of large organizations that had to enter a market twice before succeeding: Jerónimo Martins (the Ara chain) entered Colombia twice, and success only came the second time, once the company sent a sufficiently large contingent of experienced managers on the ground. InPost had a similar experience during its international expansion. An interesting fact confirming the importance of experience managing large teams: about half of Amazon's "pathfinders" (internal operational interims) are former military, recruited precisely for their experience running large units — useful when you need to open a fulfillment center on the other side of the world. In operations, you can't fake a result — the goods are either produced and delivered, or they aren't, which makes team selection (a COO is sometimes compared to a commander, and their closest team to a praetorian guard) a decisive factor in the success or failure of the whole operation.