Good morning.
In my talks with CFOs, many tell me how it’s increasingly important for them to understand the operations and inner workings of their company to boost efficiency and growth.
“I consider the role of the CFO much more operational than just the finance department,” Moderna CFO Jamey Mock told me last week. “I spend as much time with our manufacturing teams, our commercial teams, our research and development teams, and the rest of the functions.”
"Companies have recognized that some of what used to be managed by a COO [chief operating officer] has drifted into the CFO’s purview," says Clem Johnson, the president of Crist Kolder Associates, an executive search firm. Some organizations are choosing to give the "dual title of CFO and COO, or president and CFO in some cases," Johnson says. "When we are conducting a search, the casual term used is often 'CFO plus.'"
Jenna Fisher, managing director and head of the CFO practice at the global firm Russell Reynolds Associates (RRA), shares what she's seeing. “Many CFOs are the de facto COO, even without that title,” Fisher says. "Every company’s definition of what a COO does varies. It really depends on the industry—with manufacturing companies being more likely to have a COO.”
Currently, just 1% of S&P 500 and Fortune 1000 companies have CFOs with the dual title of CFO/COO, according to RRA. But the COO role itself, which has gone in and out of popularity over the years, is on the rise again.
RRA data shows that 39% of S&P 500 companies have a COO. That’s down from 48% in 2000. However, it’s up from 32% in 2018. And 42% of Fortune 1000 companies have a COO. With the increase in popularity, we may see more CFOs with the dual title soon, according to RRA.
Finance chiefs who have added COO to their title this year include Block CFO Amrita Ahuja; Macy’s CFO Adrian Mitchell; Abercrombie & Fitch Co. CFO Scott D. Lipesky; and The Children's Place CFO Sheamus Toal. And other executives joined a company for a CFO/COO role such as Ketchum's Conor Nash and Sendero Wealth Management's Kristina G. Craig.
In a recent LinkedIn post, Mitchell wrote about taking on the COO at Macy’s. In addition to leading finance and real estate functions, he now oversees stores, supply chain and technology. “My new responsibilities allow me to go deeper into the design and execution of our long-term goals,” he writes. “From an operations perspective, we are exploring how we can build a faster, more flexible and more efficient operating model that will better serve our customers.”
"COOs are making a comeback" and the role is “bigger, bolder, and more transformative than ever,” recent McKinsey research finds. The role has traditionally “taken a backseat to other C-suite functions” and “its recent resurgence and increasing visibility showcase the importance of the job in building resilience,” according to McKinsey.
Being appointed COO may also be a test for the top job.
“The COO role can be a stepping stone on the way to CEO,” Fisher says. “So, some companies will put someone in that spot if they see potential for them to ascend into the CEO role in time.”
Sheryl Estrada
sheryl.estrada@fortune.com
