It’s an unusual arrangement, but co-CEOs have been showing up at high-profile companies in the last year. Last summer, Martha Stewart Living Omnimedia CEO Susan Lyne stepped aside, only to be replaced by two women, ad industry maven Wenda Harris Millard and former Kate Spade exec Robin Marino. In what must have been an awkward move, Motorola named Qualcomm executive Sanjay Jha co-CEO with Greg Brown last August after Brown had been in the role since late 2007. And last April, SAP CEO Henning Kagermann named Léo Apotheker co-CEO in an effort to create a smooth transition.
The first example ended poorly, with Millard departing MSLO last month amidst apparent disagreements at the top. While Stewart cannot hold certain financial roles following her prison sentence for lying about a stock sale, she still receives some $2 million a year in “talent compensation” and now, a $3 million retention payment, and reports say she is still very involved in the company, along with Chairman Charles Koppelman and Millard’s co-CEO Marino. That’s pretty crowded at the top—not to mention pretty expensive.
But for others, it seems to work. In the new issue of Workforce Management, Aon Consulting co-CEOs Kathryn Hayley and Baljit Dail describe how they make the arrangement work. Close communication is an obvious factor. The two must have complete confidence in one another, Aon’s co-CEOs say. And carving up distinct responsibilities can also help to clarify the roles. That may be helpful to companies planning to name co-CEOs, a move some pundits think more companies may try out. “It’s an experiment,” Center for Creative Leadership faculty member George Houston told Workforce Management. “People are going to be testing it.”
But I can’t help but think the practice is littered with landmines. In a succession process, like SAP’s, it’s understandable for a short-term period to help one CEO show the other the ropes. And in the case of Blackberry maker Research in Motion, where hands-on operator Jim Balsillie and creative innovator Mike Lazaridis share the role, the two different backgrounds might nicely complement each other.
But in other scenarios, who makes the final tough call about risky new strategic directions? Who do investors and employees really listen to? How does each CEO manage their relationship with the board, so that one doesn’t out-charm the other?
To me, it’s a set-up destined for trouble for all but the most collaborative and communicative of leaders. Organizations need decisive, clear direction. The board and a CEO’s executive team should be his or her sounding board rather than a direct peer. And the risk of egos getting in the way of clear-headed business decisions seems too present to be ignored.
If you’ve seen a co-CEO set-up go smoothly, what made it work?
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