Every 2027 plan on the table right now names its priorities. Very few name the second in command who carries them when the founder is out of the room.

That gap rarely shows up in a budget review. Instead, it shows up the first week something goes wrong.

Here’s a pattern worth naming this planning season. Most plans state the revenue target to the dollar. But ask who runs the business for 90 days without the founder, and the answer gets harder.

This is the seat the plan leans on hardest. It is also the seat most plans never price.

Where “Second in Command” Actually Came From

The phrase comes from military command. There, the second in command is not simply the most senior helper. It is the officer who can take command immediately, with full authority to act.

That definition rests on one test. Can this person run the operation without calling you first?

Business borrowed the phrase and quietly changed its meaning. In most companies it now means a title, usually chief operating officer or president. Or it means “my right hand,” the person who does what the founder asks, fast.

Researchers noticed the confusion two decades ago. In Harvard Business Review, Nate Bennett and Stephen Miles called the COO “the misunderstood role”. They found no standard definition at all. In fact, they identified seven different reasons companies create the number two seat. They range from executing the chief executive’s vision to grooming a successor.

The Drift: A Title Is Not a Second in Command

Here is the finding that should stop a planning meeting. Donald Hambrick and Albert Cannella studied 404 firms across 21 industries over ten years. Companies whose chief executive had a COO performed worse, not better, than companies without one.

A W. P. Carey School summary of the research is blunt about it. The researchers found no positive link to return on assets or stock value.

That finding does not say the number two is a bad idea. It says the title alone buys nothing. Bennett and Miles reached the same place from another direction. The pairings that worked shared deep trust, and the chief executive handed over real decision rights.

So the 2027 question is not whether a second in command appears on your org chart. It is whether anyone can actually carry the plan.

The Economics: Why This Seat Always Looks Too Expensive

This is where the budget conversation goes sideways. And it goes sideways for a reasonable reason.

In a planning spreadsheet, a real second in command looks like pure cost. It is a senior salary with no new revenue line attached. In a good year, it looks like the most cuttable seat on the page.

Economists had a name for what this seat provides long before anyone built a budget model. In 1963, Richard Cyert and James March named it “organizational slack”: resources beyond what today’s work strictly requires. But their point was that slack is not waste. Instead, it is the cushion that lets a company absorb a shock.

The research has held up. A 2025 review of the organizational slack literature backs them up. The field now treats surplus resources as a strategic asset rather than mere waste.

Efficiency thinking gets this half right. It correctly spots a second leader as duplication. However, it cannot see what that duplication is worth. The value only appears in months that have not happened yet. A resignation. An acquisition offer. A founder who needs 90 days away.

Which means the second in command behaves like insurance. In other words, it carries option value. You pay the premium every month. The payout arrives once, usually without warning.

What the Market Data Says Right Now

The pressure on this seat is climbing, not easing.

• A Chase survey published in May found 70% of small business owners have an early-stage plan or no formal plan. Only 8% feel fully prepared to transition ownership.
• Heidrick & Struggles, the executive search firm, published Route to the Top US 2026 in May. Only 25% of leaders said they treat CEO succession planning as a priority. One in four are sure their process is missing future leaders.
• At the largest U.S. companies, finance chief turnover is on pace for 18.3% this year. Fortune reported the figure from Crist|Kolder, another executive search firm. Several companies named interim or deputy finance chiefs to carry the seat.
• In Crist|Kolder’s 2025 Summer Volatility Report, roughly 35% of the largest U.S. public companies use a COO. Yet among internally promoted CEOs, 42.4% came from the COO or president seat. No other internal route came close.

That last number is the quiet one. The number two seat often doubles as the succession pipeline. So the person in it carries two jobs: this year’s plan, and the succession plan behind it.

I covered the top seat itself in The Bench You Think You Have. This is the seat directly beneath it, and it is often the one that decides whether that bench is real.

Planning for 2027: Four Questions Before the Plan Locks

Take these into your next planning meeting. Answer them honestly, not optimistically.

1. Who runs the business if you are gone for 90 days? If the honest answer is “it would wait for me,” the plan has one point of failure.
2. Which priorities in the plan have a named owner below you? Eleven priorities marked critical, all routed through one person, means one person is the plan.
3. Is your number two a title or a capability? The org chart shows a COO, and every real decision still lands on your desk.
4. Where is the second seat in the budget? If it appears only as a cost line, the spreadsheet prices the premium and ignores the payout.

What This Means Depending on Where You Sit

If you’re the one in the seat: You probably already think of someone as your number two. So here is a test. Next week, let one real decision go to them without a check-in. Notice how that feels. If it feels risky, that feeling is the gap, and the gap is fixable. You rarely hire a second in command ready-made. You build one, through decision rights handed over on purpose and a few months of small, survivable mistakes. Start that in the first quarter. By summer, the plan can rest on two people instead of one.

If you’re the investor or the board: In a planning review, ask who carries each priority without the top leader. That answer tells you more than the revenue forecast does. A plan that routes every major decision through one person carries a risk the financial statements never show. Funding a real second seat is not overhead. Rather, it is protection against a single point of failure in the plan you are backing.

If you’re the one growing into the role: Maybe you are the person everyone calls when the founder is unreachable. Then you may already be the second in command in everything but name. Ask for the next step directly: one decision area that is fully yours in 2027. Authority you practice this year becomes the readiness someone looks for later.

What This Means for Real Leaders, in Plain English

Strip away the research, and this comes down to one question. If you stepped away for three months, would the business keep moving?

If the answer is no, you don’t have a second in command yet. You have a trusted helper and a single point of failure.

That is not a criticism. Most founders built the company by being the person every decision ran through. It worked. It is also exactly what makes the 2027 plan fragile.

A real number two costs money you can see every month. What it protects, you only see on the bad day. So plan for the bad day now, while the plan is still open.

Here is the practical version:

• Name the one person who could run things without you. If no name comes to mind, that is your first 2027 priority.
• Give that person one real decision to own, fully, starting this quarter.
• Put the seat in the budget as protection, not overhead.
• Check back in 90 days. Did decisions actually move, or did they still come back to you?

That is how a title becomes a second in command. And once it does, the words around it start to matter too.

Decoding the Lingo

Alchemy works where four rooms meet: investors, entrepreneurs, leaders and operators. The same word carries different weight in each room. Most writing on this subject assumes you already sit in the room where a term began.

We don’t make that assumption. So every piece decodes its own language. What a term means, where it came from, and why it matters to you.

COO (chief operating officer). What it means: the executive who runs daily operations so the chief executive can focus on direction, capital and people. Where it came from: the title grew common in large companies. Still, Bennett and Miles found no agreed definition of the job. Why it matters to you: the title tells you little. Instead, ask which decisions the person can make alone.

Organizational slack. What it means: resources beyond what current operations strictly need. Think spare cash, spare capacity, or a leader not fully consumed by today. Where it came from: Cyert and March’s 1963 book, A Behavioral Theory of the Firm. They argued slack buffers a company against shocks. Why it matters to you: in a budget, slack looks like waste. In a crisis, it is often the only thing that can move.

Option value. What it means: the worth of having a choice available later, even if you never use it. Where it came from: finance. There, an option is a right, but not an obligation, to act later on set terms. Why it matters to you: most of a second in command’s value is option value. You pay for readiness before you know when you will need it.

Key-person risk. What it means: the exposure a company carries when results depend on one individual. Where it came from: insurance, where “key person” life policies protect a firm against losing a critical leader. Why it matters to you: buyers, boards and lenders look for it. Therefore a plan that depends on one person is harder for anyone outside to trust. Our earlier piece on what human capital actually means shows where this exposure hides.

Add Alchemy to Your 2027 Planning

Most 2027 plans are nearly done by now. Leaders have set revenue targets, capital priorities and new initiatives. The part most teams write last is the people who have to carry it.

Alchemy Leadership Lab works with founder-led and mid-market companies at inflection points for scale, technology transformation and professionalization. Our engagements sit at the intersection of development and operations. So change takes hold on Monday morning, instead of fading after the offsite.

The work shows up in four places.

• Executive assessment and bench strength: a clear read on what each seat requires, and where the team is ready.
• Succession planning and organizational design: depth behind the roles the plan leans on hardest, including the second in command.
• Leadership development and team programs: designed around the business plan, not a catalog.
• AI readiness for leaders and teams: adoption with accountability designed in from day one.

Engagements start with a four-week read of the leadership team against the plan. From there, some grow into a three to four month build. Others run alongside the team for the full year.

If the leadership side of 2027 is on your list, invest in it before the year starts. And if you want the longer view of why depth matters, start with The Bench is the Whole Game.

If you’re ready for a conversation: https://calendly.com/brynn-alchemyleadershiplab/20min-discovery-call

References

1. Bennett, N., & Miles, S. A. (2006, May). Second in Command: The Misunderstood Role of the Chief Operating Officer. Harvard Business Review. https://hbr.org/2006/05/second-in-command-the-misunderstood-role-of-the-chief-operating-officer
2. Hambrick, D. C., & Cannella, A. A. (2004). CEOs who have COOs: Contingency analysis of an unexplored structural form. Strategic Management Journal, 25, 959-979. https://pure.psu.edu/en/publications/ceos-who-have-coos-contingency-analysis-of-an-unexplored-structur/
3. W. P. Carey School of Business, Knowledge. (2005, May 9). CEOs with COOs: Two heads are not necessarily better than one. https://knowledge.wpcarey.asu.edu/20050509-ceos-coos-two-heads-are-not-necessarily-better-one
4. Depino-Besada, N. I., Vázquez, X. H., Sartal, A., & López-Manuel, L. (2025). An integrative review and research agenda on organizational slack. Management Review Quarterly. https://link.springer.com/article/10.1007/s11301-025-00502-y
5. Cyert, R. M., & March, J. G. (1963). A Behavioral Theory of the Firm. Prentice-Hall.
6. JPMorgan Chase. (2026, May 4). Local Snapshot: Most Small Business Owners Aren’t Prepared for Succession, New Chase Survey Finds. https://media.chase.com/news/local-snapshot-succession-survey
7. Heidrick & Struggles. (2026, May 12). Route to the Top US 2026: Closing the CEO capability gap. https://www.heidrick.com/en/insights/chief-executive-officer/route-to-the-top-us-2026-closing-the-ceo-capability-gap
8. Estrada, S. (2026, August 21). CFO turnover at America’s largest companies is on pace to hit 18.3%. Fortune. https://fortune.com/2026/08/21/cfo-turnover-americas-largest-companies-on-pace-hit-18-3-percent-highest-since-pandemic/
9. Crist|Kolder Associates. (2025). 2025 Summer Volatility Report. https://static1.squarespace.com/static/62164a05607c3e5978f251ec/t/68bb1d2397932301feada0b2/1757093155855/2025+CKA+Summer+Volatility+Report.pdf