Most people buy into the adage that two heads are better than one — except when it comes to the very top of corporations.
The idea that two people should run one company is, to put it mildly, widely unpopular. The “model is usually like watching a car crash in slow motion,” an analyst once told me. Looming over such reactions is a fear of power struggles, slowed decision-making and confusion about who really owns what.
But in the last week or so alone, three companies have defied the naysayers and named co-CEOs: Spotify Technology SA (Alex Norström and Gustav Söderström), Comcast Corp. (Brian Roberts and Mike Cavanagh) and Oracle Corp. (Clay Magouyrk and Mike Sicilia).
A CEO today must be part statesman and part lobbyist, both a supply chain guru and a technologist, a therapist and a cheerleader, a brand manager and a bean counter, a details person and a big-picture thinker. The increasingly difficult nature of the job is making it harder to find a single person who ticks all those boxes — which may be why a handful of companies are splitting the job in two.
The data is on their side: A Harvard Business Review article from 2022 that studied 87 public companies with co-CEOs found that they outperformed, generating an average annual shareholder return of 9.5% versus 6.9% for their peer groups. And the tenures of CEOs in both the go-it-alone model and the co-CEO structure were nearly the same, at about five years.
When we look back at co-CEO situations that blew up, it’s not the leadership structure that became the problem but rather the personalities involved and implementation of the arrangement. Salesforce Inc. CEO, Co-Founder and Chair Marc Benioff has made two failed attempts to add a co-CEO, largely because he wasn’t ready to share power at what he viewed as “my company.” The co-CEO model was deployed in part as a strategy to keep his top talent from leaving, not because Benioff thought it was a better way of operating.
The problem with SAP SE’s short-lived experiment with co-CEOs in 2020 was poor execution. Bloomberg News reported at the time that it took managers longer to get things done because they sometimes needed sign-off from two different CEOs. Over time, dueling power centers developed — one in the US and one in Germany — which drove people crazy.
The current gold standard of the joint CEO model is happening over at Netflix Inc., which has now had two different co-CEO formulations — first with Co-Founder and Chairman Reed Hastings and Ted Sarandos, and now with Sarandos and Greg Peters. The two executives have complementary personalities (Peters is the data guy, Sarandos goes more by gut) and a clear division of labor. Sarandos owns content, marketing, legal, communications and publicity, while Peters oversees product and tech, advertising, HR and gaming. Their working relationship had already had a tryout, having both been at the company for more than a decade when they officially teamed up.
