It’s not a new concept. In fact, some European countries such as Germany have long incorporated a tradition of shared leadership. In America, the concept of co-CEOs is becoming a more common occurrence. Whether by choice or out of temporary necessity, more major US corporations are at least taking a look at the viability of two equal corporate executives sharing the responsibility for their company’s performance and future.
For the most part, CEOs from major corporations are visionaries with tremendous drive and an innate ability to lead. They also tend to have high levels of self-esteem often mistaken for ego. That said, following another person’s vision or sharing responsibilities is not generally considered to be one of their strong suits. So why would an organization even consider dual leadership roles? There seem to be three viable reasons to appoint co-CEOs.
Complementary skill sets
In a dynamic global economy, it has become increasing more difficult to find CEOs who have extensive experience with all the current business trends. With ever-changing technology and the increasing need for globalization, the sheer volume of decision-making is becoming so big that mere mortal CEOs spread themselves too thin, often losing effectiveness. If an organizations has two equally qualified individuals with significantly different areas of expertise, the concept of co-CEOs starts to make a lot of sense. For instance, one CEO might have a real talent dealing with advancements in technology and visualizing how to move the company forward by taking advantage of those advancements. Another candidate might be well-versed in international business and will be able to give the company an edge as it tries to globalize the business. If the company has a top leadership need in both areas, why not appoint co-CEOs and take advantage of what both people have to offer?
Enhance merger support
Conceptually, it’s difficult at best to merge two corporate business models and cultures into one. If both companies are independently successful and the merger is hostile by nature, those issues become amplified. In the interest of appeasing employees and stockholders from both companies, the appointment of co-CEOs with a major player from each organization makes sense, at least on a temporary basis. In the long run, it stands to help with any possible transition issues.
Maintaining company’s identity
Some companies are closely tied to their founders. Consider what happened at Apple when Steve Jobs was unceremoniously removed from his own company. The company seemed to lose its vision and identity, which resulted in a multitude of problems. In some cases, losing that identity is an undesirable by-product of bringing in a different top man. That’s how Chipotle founder Steve Ells must have felt when he appointed Monty Moran to share the CEO title with him when he no longer wanted to bear the burden of all decision-making. If the founder is comfortable sharing responsibility for his company with a trusted individual, the possibility of success co-leadership is enhanced.
Pros and cons of having co-CEOs
In the business world, unusual endeavors come with the requisite pros and cons. For any company considering the prospects of this type of corporate structure, it might be a good idea to weigh all the possible pluses and minuses.
Dividing up major areas of responsibility
As alluded to in the previous section, the current business environment is complicated and often cumbersome. With co-CEOs, the company has the ability to assign major areas of concentration to two different executive based on their individual skill sets. By reducing the number of areas that each CEO needs to focus on, it stands to reason that their effectiveness would be enhanced as opposed to trying to oversee everything in a vacuum.
Diversity of ideas
Are two heads better than one? Sometimes, the answer is an emphatic yes. While two visions can be opposing, there is also the possibility that the best part of two different visions could be used to develop a stronger focused direction for the company. While critics are wary of too many cooks in the kitchen, proponents will point out that sometimes the meal is better.
The ability to innovate and visualize is enhanced with two CEOs. While one is working on ideas and concepts, the other is able to focus on running the day-to-day operations. By switching off, they each have the flexibility to think about the future.
Strong leaders usually have a strong following of people who believe in them. If two CEOs have varying visions, the likelihood of support staff members lining up behind each CEO’s concepts becomes a real possibility. If in-fighting ensues, it’s going to affect the entire organization all the way down to the roots.
The likelihood of every decision that two strong opinionated CEOs might actually mesh is a foolish concept. Chances are that neither CEO is going to be particularly fond of being second-guessed, which is going to inevitably lead to disputes. The last thing a Board of Directors wants to be involved with is dispute resolution during a power struggle.
Lack of a solitary vision
Most companies just seem to operate at maximum efficiency when there is a solitary purpose or goal. In some cases, having more than one vision becomes confusing to employees who can’t decipher what the company is trying to achieve. The fact remains that companies are able to maintain cohesion when everyone is looking in the same direction.
Regardless of whether an organization is considering co-CEOs as a permanent or temporary solution to a corporate initiative, it is important for all those involved to understand the potential benefits and pitfalls before going down that path. Corporate cultures are delicate and the slightest bit of fracturing can easily become a full-blown corporate disaster. That’s not to say appointing co-CEOs is a bad idea, it just demands that personalities and end goals be closely considered before moving forward with such a rare corporate structure.