We slowly began to see a wave of momentum for the adoption of Corporate Operating Partners in the publicly traded sector.Our clients and candidates were starting to field calls from heads of human resources of publicly traded businesses to discuss opportunities inside those companies.In addition, there have been occasions where publicly traded CEOs have called us to counsel them on the proper set up of this function.Of course, in some fashion, various elements of this role already exist in (many times) multiple executives on a management team.The idea is to take this proven concept of Private Equity Operating Partners and re-pot it into the public company context.
There is a legitimate comparison to be made between the trending Corporate Operating Partner role and the more traditional Chief Change Officer or Chief Transformation Officer.At a foundational level, regardless of title, the focus on this type of outcome is a novel pursuit, and the centralization of responsibility is good because it helps to avoid fragmentation of initiatives.However, if done correctly, this role is not simply an extension of the duties of the CHRO or CIO.(One would rarely ever see the ownership of these initiatives in the PE context vested in a CHRO or CIO.)A company cannot have a sitting executive simply “babysit” this important outcome.Moreover, a CEO needs to be able to fire this person for underperformance without decimating another vital function in the company.
We have seen large logistics companies and large retailers look at this role as a means to more effectively deal with the disruption to their industries that came about because of Amazon.We have seen industrial product businesses and contract manufacturers seek this kind of talent because of the globalized nature of competition today.We have seen B2C companies and retail banks want this capability to more effectively market and cater to the quickly changing consumer landscape.In essence, if a company truly believes that it constantly needs to be reinventing itself so that it does not suffer an untimely demise (ex. digital files and the recording industry) then this is a topic that demands some consideration at the next Board meeting.If an industry is going through disruption, one can argue that it’s negligent NOT to create this capability.
We've answered this question and more in our latest article - The New Role of the "Corporate Operating Partner" and Why 2018 Will Be Its Breakout Year". Click below to download and read the full article.