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As a hiring manager I want to talk to people who worked directly with the candidate, not someone who only knows them as a name. As a candidate, I want to talk to everyone who is going to be a reference for me to make sure we’re aligned in what I want them to highlight about me. So no, I probably wouldn’t use your CO for a job reference. What I might do is ask him to post a brief blurb about me on LinkedIn.
In my career, I can promise you that not one of my now 7 employers have ever reached out to anyone I worked for/with directly. HR will call another HR dept to make sure I worked there but that’s all. I also as an HM have never had opportunity to reach out to anyone directly nor would it have mattered in the grand scheme as we generally hire on pedigree, skills and eq.
You should use your CO. While it does not seem like it now in the business world you worked with your CO directly and they were your final approved on all performance evals so they are aware of your accomplishments. Do not over think it military transitions are made harder then they have to be because you worry about credibility, but employers are very rarely aware of the military veterans workload. You operated at a manager level but will most likely only be ready for a specialist job due to this gap of info for civ work culture. Shoot your shot.