Issue link: https://beckershealthcare.uberflip.com/i/1497584
16 CFO / FINANCE COOs can feel like 'chief optional officers' in hard times By Molly Gamble C orporate and managerial employees may feel anxious as health systems reduce administrative headcount amid negative op- erating margins. In such times, one role has historically faced more uncertainty than others: the COO. e larger the health system, the more ins and outs there can be to administrative workforce changes. Unless an organization opts to outsource an entire department or function, layoffs or the elimination of administrative roles do not occur in large swaths but rather on a department-by-department basis with managers making hard personnel decisions to meet a certain dollar amount. A health system doesn't eliminate all of its assistant vice presidents, or a marketing department doesn't lay off all of its specialists, for instance. is is what makes the elimination of COO roles so distinct, not only in healthcare but in corporate America. It has been one of the few positions targeted for elimination entirely, or frequently goes unfilled or unreplaced if a COO departs, with duties split up and reassigned to other executives. is can result in COOs being seen as optional. Scott Becker, publisher of Becker's Healthcare, generally views this trend as a horrendous idea. "First, CEOs don't have the capacity to engage in close day-to-day management and need COOs to oversee the daily overall operations at systems and hospitals," Mr. Becker said. "Second, CFOs have involvement in overall strategy and operations, but first and foremost must make sure the financial ship is in order. is is a multifaceted and very complex job today." In 2000, 48 percent of large companies on the Fortune and S&P 500 had a COO. By 2018, that percentage dropped to 32 percent, according to executive search firm Crist Kolder Associates. Closer to 2018, headlines followed what seemed like a big business shi and an irreversible fade-out. "e Decline of the COO," read one from Forbes. "e case of the disappearing chief operating officer," read another from e Washington Post. McDonalds eliminated the COO role in 2014 aer its incumbent retired. at same year, soware company Symantec did the same. More recently, in 2022, Starbucks eliminated its COO spot, moving day-to-day business operations to the CEO. e trend was reversible aer all. COOs made a comeback at large companies since that 2018 low point, with about 10 percent more of firms simply having one. Nonetheless, healthcare is the least welcoming industry for the executive role. In 2022, only 26 percent of healthcare companies among the Fortune and S&P 500 had a COO. at compares to 48 percent of companies in finance, 48 percent in energy and 40 percent in tech. ese figures are tracked by executive search firm Crist Kolder Associates. Image Credit: Adobe Stock