I recently learned of a new C-Suite role that I didn’t know existed. My first thought was, “Are we just making up new CXO titles all willy-nilly to help people feel better about themselves? Are we creating another seat at the table instead of just shifting around the people in the seats that are already there?” Upon my research, however, I did learn that this new title was, in fact, valid and deserving of its own letters.
Let’s dig in.
The role in question is Chief Administrative Officer (CAO). If you’re like me, you’re wondering, “How is this really any different from a Chief Operating Officer (COO)?” But it turns out both roles play important and distinct parts in driving company growth.
Chief Administrative Officer (CAO)
The CAO is at the heart of internal operations and efficiency within an organization. Their scope often extends across every single department, with a focus on organizational infrastructure and compliance.
What are the key responsibilities of the CAO role?
- Oversee HR, Facilities, Legal/Compliance, and IT
- Shape, implement, and communicate internal policies and procedures
- Identify and mitigate potential threats to daily operations (e.g. legal or compliance issues)
- Collaborate with leadership to identify and establish KPIs for all departments
- Implement reliable and functional data tracking systems
- Collect and present business metrics to leadership
Ultimately, you can think of the CAO as the strong and supportive backbone of a business. They tend to have a more micro focus on specific elements of the business and a closer understanding of individual departmental functions and operations.
Chief Operating Officer (COO)
In contrast, the Chief Operating Officer often has more of an external focus, translating leadership’s strategic goals into actionable plans that enhance operational efficiency and effectiveness.
What are the key responsibilities of the COO role?
- Optimize business operations to enhance productivity and quality
- Drive customer satisfaction and trustworthiness in the marketplace
- Manage the allocation of resources, like budget, personnel, and equipment
- Oversee external operations, such as supply chain management and logistics
- Integrate external and internal processes for seamless workflow
- Build and maintain relationships with the external stakeholders
- Manage external risk factors, such as cybersecurity or supply chain complications.
I like to think of COOs as the muscle of the organization. They’re more visible to external stakeholders and must maintain a focus on the macro trends needed to drive growth and help a company scale.
So what’s the difference between a CAO vs COO?
COOs typically focus more on high-level and external issues like budget allocation, logistics, and orchestrating special projects. CAOs tend to be more focused on the micro elements of internal processes and tracking metrics.
Does Every Company Need a CAO and COO?
In small businesses and startups, the CAO and COO roles are usually integrated into one position, most often with the COO label. (I’m guessing because it’s more recognizable). As a startup or small business grows in complexity, there may come a time where the two roles must be broken out. This is especially true in sectors like healthcare and finance, where compliance and legal requirements require a ton of attention. My understanding is that larger organizations will sometimes choose to have a CAO, but will most often stick to the singular COO role covering both sets of responsibilities.
Closing Musings
Our company, NSquared, has only the singular COO role right now. This is largely possible because we have a bulletproof operational framework in place (thank you, EOS!) and our KPI tracking and reporting within this framework is 100% automated (shameless plug for BlinkMetrics). With these two pieces of the puzzle dialed in, the need to split apart the CAO and COO functions into two distinct roles is reduced. However, with your help, we might one day become big enough to actually need a CAO. Help a sister out; book your demo here now: blinkmetrics.io/book-your-demo
