When Netflix announced this summer that it was elevating Chief Content Officer Ted Sarandos to co-CEO, sharing the title with founder Reed Hastings, the move cut against conventional wisdom. Salesforce.com, SAP, and Oracle all had abandoned co-CEO structures within the last year, leading The Wall Street Journal to ask: “Co-CEOs Are Out of Style. Why Is Netflix Resurrecting the Management Model?”
We have a strong point-of-view on this: We’ve served at as co-CEOs at The Harris Poll together since 2017.
The truth is the archetype of the omnipotent CEO — the lone commander atop the corporate pyramid — is increasingly a relic of 20th century management thinking. There are some notable exceptions: Founders like Jeff Bezos, Elon Musk, and Mark Zuckerberg still command and control. But in our research with the American Psychological Association, we’ve found that for most mere mortals, it’s simply too hard to go it alone. The modern business landscape is too fast-moving and the demands on a CEO have become too innumerable for a single person to set an organization’s strategic direction and oversee a multitude of internal decisions, all while acting as its public face to stakeholders.
Tellingly, while executive teams have doubled in size over the last three decades as different corporate functions have gained importance (human resources) or have come into existence (digital strategy and data security), the top job has largely remained a solitary grind. As entrepreneur Joe Procopio has observed, “The math on giving 110% usually breaks down to giving 10% across 11 different priorities.”
At the same time, the expectations of modern leadership have evolved. Organizations are more agile, less hierarchical, and must adapt quickly to the sudden dislocations we have today. Generational shifts in the workforce and society bring rising social consciousness of inequalities and a mandate for including others with different experiences into decision-making. These exigencies have made non-traditional soft skills essential additives to leadership. In our book, The Athena Doctrine, we surveyed 64,000 people in 13 countries and found empathy, selflessness, collaboration, expressiveness, flexibility, and patience were among the traits most correlated to the ideal modern leader, while independence, aggressiveness, decisiveness and controlling were not.
But rather than this being an either/or, it really is about having all of the above. The profound shift to inclusivity in business demands that leaders broaden their skills and competencies. Some organizations may be fortunate and find that unique individual who is both right- and left- brained, who is both single-minded and collaborative, etc. For all the rest, the better alternative is two leaders in the role. CEOs need not be perfect if they have a partner who complements them.
This structure also creates room for growth in the C-suite, helping combat the kind of corporate brain-drain that inevitably accompanies a change in CEOs. One 2016 Stanford Business School research paper found that three-quarters of executives studied left their companies after getting passed over for CEO. This makes sense: Leaders are bound to want to go somewhere where they are more valued, ultimately hurting the company as talent disperses.
But none of this is to say that simply naming a second CEO is a magical panacea that will solve all problems or automatically lead to business success. Like any relationship or venture, the dual chief executive structure requires constant work.
When we took over in 2017, The Harris Poll was a venerable voice of American public opinion. We had tremendous people, but no one leading them. We faced commoditization from competitors and a brand that had been left to atrophy. With too many products, too little foresight, and a workforce fatigued by constant ownership turnover, we needed to focus and protect; innovate and stabilize; disrupt while nurturing a special culture.
Our tandem roles were enabling from the get-go. Based on our previous experience of working together, we split up the job into areas where we each excelled: After a long career in marketing and advertising, John is best at consumer insights, business development, strategic leadership, and brand and marketing. Will’s strong suits, bolstered by an MBA, are business strategy, finance and operations, account management, innovation, and SAAS.
Sharing the CEO role permitted John to travel and personally reintroduce the brand to clients while giving Will the time to carve out The Harris Poll assets (personnel as well as intellectual property) from the previous owner’s structure. Today, we still divide and conquer. Will spends much of his day with our managing directors, tracking each business unit against budget forecasts and managing personnel. Meantime, John spends much of his day on our weekly Covid-19 research, new business pitches, and providing client deliverables. The other day found one of us presenting to the Centers for Disease Control and Prevention on a joint poll and the other was evaluating bolt-on acquisitions with our investment arm.
At multiple points in the day, we come together to offer each other counsel or swarm on a problem. To achieve longer-range objectives, we scheduled in-person deep-dives bi-monthly; we now strategize together virtually every Friday.
Our teams cross between us, but we are careful not to barge into the other’s area of ownership. We inherently trust one another’s judgment and decisions. We also know that giving up power actually means having more of it because we’ve proven that as a partnership we could accomplish more than the individual.
Trial and error have taught us four basic rules to position co-CEOs for success.
1. Pick the right partner. Co-CEOs are in a very real sense professionally married. The foundational qualities of such an enduring personal relationship also apply in a shared C-suite: a common vision, clear communication, and most important, deep trust. This sustains the partnership when, inevitably, there is a disagreement. Each must remember the other’s talents and make decisions knowing it’s still one P&L both must own. You cannot go into this arrangement without believing in the character of the other and vice-versa.
2. Set expectations. Critics of dual CEOs argue that shared accountability amounts to no accountability at all — if two are in charge, no one is. But properly managed, the opposite is true. The idea of joint accountability means setting performance standards that put each partner in the position of having to live up to the other. Ideally, this creates a healthy competition. Would-be CEOs are typically high-performing individuals, so clear lanes help each partner drive improvements in the other. Indeed, a 2011 paper published in Financial Review found that co-CEOs’ mutual monitoring can generate enough accountability to substitute for board supervision.
3. Define roles and responsibilities. The organization must understand who is in charge of which aspects of the company and where decision-making authority lies. We have a highly decentralized workforce — the two of us live in different cities — yet our managers intersect with us with a clear understanding of what types of decisions we are each responsible for. This is liberating in that it takes some daily responsibilities off each CEO’s plate. It also frees up time for skill-building around one’s dedicated areas, yielding more focused mentorship. And one leader can come into another’s problem from a fresh outside perspective. Clearly delineating areas of responsibility also mitigates another common criticism — that co-CEOs are a bottleneck. In fact, the structure often facilitates a quicker response because one individual has authority to make a decision from a greater depth of experience and knowledge.
4. Distribute authority but not responsibility. While each partner has individual duties, both must fundamentally remain a leadership unit, one in which successes and setbacks alike are owned together. These successes and setbacks should be reflected in short- and long-term compensation. They must be prepared to be rewarded or penalized as a unit and accept the consequences. With the right chemistry and trust, it incentivizes both healthy competition and having each other’s back. Another benefit of this conjoined career planning is that it can both temporary or long term. Some companies may see a co-CEO arrangement as a grooming opportunity for a junior leader.
Let’s be honest: The modern CEO is often overwhelmed by unrealistic demands. Netflix’s move to co-CEOs says less about the limitations of individual leaders than about a system that sets them up to fail. We believe business pyramids are stifling innovation, when a division of authority can unleash it. In unprecedented times like these, more companies should rethink their structures and embrace co-CEOs, putting their leaders in positions to succeed.