The Rise of Co-CEOs: Can Shared Leadership Fix the Overloaded CEO Role?
The co-CEO trend is gaining momentum, with high-profile companies like Netflix, Salesforce, and M&S trialing the two-Chief Executives approach. Recently, Spotify joined the ranks, with CEO Daniel Ek set to be replaced by joint CEOs Gustav Söderström and Alex Norström in January. Oracle is also making a similar move, with Clay Magouyrk and Mike Sicilia stepping in for Safra Catz. But is sharing the CEO load better than going solo?
Why the Co-CEO Model is Gaining Popularity
A study by AAPL of 87 co-CEO companies between 1996 and 2020 found that these businesses generated average returns of 9.5 percent, with nearly 60 percent outperforming their peers. Although the sample size is small, the shared leadership approach is still in its relative infancy. The rise of co-CEOs can be attributed to the increasing demands placed on leaders due to economic, technological, and geopolitical megatrends. With the uncertainty and pace of today’s business environment, it is becoming harder to find all the skills and knowledge required to fulfill a functional CEO position in a single individual.
The Benefits and Challenges of Shared Leadership
For the co-CEO model to be successful, compatibility is non-negotiable. Co-CEOs must be able to get along, share common values, communicate constantly, resolve conflicts effectively, and present a unified external front. When it comes to strategy and scalability, the co-CEO model is most effective when each leader brings complementary skill sets to the table. However, the model can falter under pressure, as seen in SAP’s decision to abandon its co-CEO structure in 2020 after just six months, citing the need for “unambiguous leadership” during the pandemic.
The Future of Shared Leadership
There is no denying that a fine balance must be struck for the co-CEO approach to succeed. Yet, it opens the door for businesses to experiment with what leadership at the top looks like for them – not just in the CEO’s office but across the whole C-suite. Globally, there is a growing number of independent C-suite executives who are beginning to work with organizations on a “fractional” basis, assisting the incumbent full-time C-level employee by providing joined-up and coordinated support to fill their capacity and skillset gaps with specialist C-suite expertise as needed.
This approach to the C-suite can strengthen succession planning and ensure continuity of leadership. With a combined co-CEO and fractional leadership approach, a firm could change one CEO at a time based on evolving strategic and cultural needs, rather than having a wholesale change in leadership. According to Sara Daw, Group CEO of The CFO Centre and The Liberti Group, and author of “Strategy and Leadership as Service – How the Access Economy Meets the C-Suite,” the co-CEO model has the potential to drastically improve executive well-being and, therefore, organizational performance.
Ultimately, the co-CEO model can be an effective solution to the overloaded CEO role, provided the partnership is built on trust, alignment, and clear decision-making. As pressure mounts on solo CEOs, organizations are expecting superhumans that just do not exist. By sharing the load between two Chief Executives, those at the top have extra capacity, less stress, and shared responsibility to drive their business forward. Read more about the co-CEO model and its potential to revolutionize leadership Here
Image Source: observer.com
