Co-CEOs Sound Great — Until They’re Not

Oftentimes, two co-founders suppose it’s a good suggestion to share CEO tasks as co-CEOs. The logic is that they’ll separate their roles and tasks, with one particular person main sure departments (e.g., gross sales and advertising) and the opposite particular person main different departments (e.g., know-how and operations). The truth is, it is a fairly unhealthy concept.

The enterprise ought to solely have one chief at a time who can “lead the ship” and ensure every part is completely coordinated throughout your entire firm. This text will educate you the potential pitfalls of a co-CEO technique.

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Lack of a sole imaginative and prescient/management

Anytime you add extra folks to a decision-making course of, that’s most definitely going to contain you making some kind of compromise, the place you aren’t doing precisely what you’ll have carried out in the event you had been a stand-alone CEO.

On minor factors, it most likely would not matter. But when it is necessary strategic-level factors you’re compromising, you find yourself diluting your personal private instincts and convictions. And it’s those self same instincts and convictions which are usually the distinction between good outcomes and common outcomes. You by no means need to be able of “managing in direction of the glad middle-ground.”

Lack of 1 sole voice throughout the workforce

When there are two leaders, and people persons are not essentially in 100% alignment on the imaginative and prescient, they might be saying conflicting issues to the workforce by way of the instructions they’re offering to the workers. That may create numerous confusion amongst workforce members, as they’re unclear on whose voice to take heed to essentially the most, as they’re each co-CEOs. And worse, it makes it appear to be the co-CEOs aren’t in alignment and aren’t speaking effectively with one another, which makes the workforce nervous that management on the prime would not know what they’re doing.

Lack of a tie-breaker

What occurs when the 2 co-CEOs can’t agree on a subject? There isn’t any one there to interrupt the tie. Which both creates a degree of paralysis the place no resolution will get made and the work would not get carried out in any respect. Or, it requires one of many co-CEOs to again down and comply with the opposite CEO (normally with the louder voice and character successful). And that may create resentment in direction of the opposite one that is continually not getting their opinions listened to or acted upon.

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Totally different administration kinds may trigger friction

No two persons are precisely the identical; what occurs when there are philosophical-level variations in administration method? To illustrate one of many co-CEOs is a “top-down” strategic degree thinker who likes to “see the massive image forest,” and the opposite co-CEO is a “bottom-up” execution degree thinker who likes to “reside within the bushes.”

These two kinds are fully alternative ways to make selections and might simply “ruffle the feathers” of the 2 co-CEOs over time, forcing them to suppose and act in methods that aren’t their desire.

You lose management of half of the enterprise

In case you are the “Gross sales & Advertising and marketing” main co-CEO, that does not imply you do not have opinions on how “Expertise & Operations” is being run by the opposite co-CEO. However by dividing up the tasks, you’re principally handing off all selections in these different departments to the opposite co-CEO. In the event you belief the opposite particular person to function alone of their silo, that’s nice.

However what occurs when you’ve got a basic disagreement on how these different departments are being operated? You may talk that to your co-CEO to try to repair it, however it’s finally as much as them to make the specified modifications you need, which they might or might not do.

Your co-CEO refuses to remain “of their swim lane”

Though you might have divided up the administration tasks together with your co-CEO, that does not imply they are going to all the time keep of their “swim lane.” CEOs who like to steer and management usually have a very arduous time giving up management to anybody else.

And when that “likes to regulate” co-CEO, begins drifting into the “swim lane” of their different co-CEO, having to have enter on each resolution of their departments, that can actually piss off the co-CEO. At that time, you do not actually have a co-CEO construction in any respect, with one particular person needing to regulate all selections. That may find yourself very badly.

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Limits your exit choices

When it comes time to promote your corporation, the brand new purchaser would like to have one CEO be their sole resolution maker, who sits on their board and works with the traders. Additionally, when you find yourself able to promote, your co-CEO is probably not able to promote.

Now, you’re caught proudly owning and dealing in a enterprise that you just not need to be working in. Or worse, you miss “your open window” to promote, and market circumstances change by the point your co-CEO is lastly able to promote, however now the window has closed, and you may’t promote.

You by no means need to be in a state of affairs when you may’t get an exit in your fairness, handcuffed by a co-CEO’s opinion, while you see an exit as the best path ahead.

Closing ideas

Hopefully, you now have a greater understanding of the challenges at hand when you find yourself contemplating a co-CEO setup for your corporation. There are examples the place co-CEOs have labored collectively completely — consider the Google founders (Sergey Brin and Larry Web page).

However most of the time, it finally ends up not figuring out very effectively in any respect — suppose the Salesforce executives (Marc Benioff first with Keith Block after which with Bret Taylor). So, if you’re contemplating this co-CEO path, purchaser beware, as it’s ripe with potential pitfalls and almost definitely won’t find yourself working effectively for the co-CEOs, the workers or your traders.