A professional who is a senior partner in a services firm in London visited recently. A change in the firm’s circumstances had created opportunities at the top and he had been offered the CEO role—along with a colleague of long standing. Citing the recent and rather public termination of co-CEOs at a large technology company, he wondered if he was setting himself up for failure.
Well, it depends, of course. To start with, companies may consider joint CEOs in a variety of situations—for example, in a merger and acquisition situation, a family business or in the absence of a single strong CEO candidate following an unplanned event such as the death of a CEO. It also seems to work better in some industries or situations—in start-ups or companies with significant overseas operations, for example. A company may also consider such a structure for reasons of convenience, to de-risk or simply because companies are too large, too complex and too diverse—think of a large dichotomous European bank, part traditional retail and commercial bank in its home country and an aggressive investment banking player globally.
So, are two heads better than one? Theoretically, there are a number of advantages that this structure could provide. To start with, it could provide significant bandwidth to management, particularly when the CEOs have complementary and not competing skills and responsibilities (example, operations versus sales versus finance) or, as in the case of my visitor, a role that requires the CEO to have significant face time with key customers. Often, co-CEOs are chosen from within the company, so their skills, strengths and weaknesses are relatively well known to the board and to each other. Co-CEOs can act as sounding boards and advisers to each other—and at a peer level, provide varied opinion and counsel. Additionally, this structure could provide an extra layer of governance within the company and reduce burnout.
In sync: Co-CEOs can be advisers to each other.
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A yin to my yang, my visitor mused.
Conversely, this can be a minefield. To start with, the operations and the culture must support a dual-headed management structure. It’s somewhat like the doubles versus singles match—the court rules are a bit different, the game is modified, but the end goal is still to win. There is the very real risk of competing co-CEOs engaging in power-jockeying—this may also result in a reduced level of accountability as responsibilities fall between the cracks. And even if they are not competing, lack of coordination between them can lead to disjointed strategies and diffused clarity of command for the troops. Differences in styles and approaches could send out mixed messages. Above all, it could result in a drawn-out decision-making process and, consequently, missed opportunities for the firm.
There can only be one sword in a scabbard, said my visitor, somewhat sadly. Yes, but how about a partner you can rely on, with a gun to complement the sword?
My advice to him? Two things really—hardware and software, your backhand to his forehand, your technique to his power. The hardware is the clarity around strategy, structures, areas of responsibility and specific roles, coupled with mutually agreed, documented and broadly communicated codes of behaviour. But eventually, it’s about the software, the relationship and chemistry between the two individuals. Do you trust this person? Will he catch you when you fall and watch your back? It also requires an incredible amount of structured and informal communication, between the two people and with the various constituents—shareholders, boards, teams and customers. The maturity to disagree in private, and having once taken a call, present a unified and committed front to the world. The ability to mesh styles, and have the patience and generosity of spirit to accommodate and support each other. A level of maturity that puts aside egos and collaborates to get the job done. Eventually, nothing succeeds like success.
Boards may also need to work a bit harder to communicate and reinforce to all constituents that the structure is driven by choice and logic. They may also be well advised to appoint a mentor to coach the two in how to co-manage. A more rigorous feedback process that includes a 360-degree review may be useful in figuring out what’s working, what isn’t.
I reminded him that all managements, and structures, are temporary and evolve as the company’s needs and environments change. Empirically, the tenures of single CEOs and co-CEOs have not been very different. Jointly or otherwise, leading a company is challenging, and success or failure is influenced by a variety of reasons.
The tango is a complicated dance, and it does take immense amount of skill, practice and finesse to perfect. Ah, but one person does “lead”, he said. Yes, I responded, but it doesn’t work without the partner “following” in perfect sync.
Sonal Agrawal is chief executive, Accord Group, an executive search firm.
Write to Sonal at email@example.com