I'll say one thing for co-chief executive officers: Two scapegoats are better than one. Since Research In Motion Ltd.'s fortunes took a sharp turn for the worse last year, its dual-leadership structure has taken a beating. With the BlackBerry maker's decision last week to revert to one CEO, the double-edged knives really came out for Jim Balsillie and Mike Lazaridis.
Four years ago, Canada's favourite corporate twins won a place on Barron's list of the world's best CEOs ("two underappreciated Northern lights"); now critics are blaming the double-headed organigram for prolonging RIM's strategic agony.
These attacks place form above substance. The substantial case against RIM is that it has buckled under competitive pressure from an assault on its core smartphone market by two of the world's largest and most aggressive technology companies – Apple and Google. The worst that can be said about the co-chiefs is that they failed to respond quickly enough to that challenge. But that is a charge that could be laid against companies that had the supposed advantages of single-CEO, buck-stops-here leadership, from Nokia to Motorola.
That said, I nurse an innate suspicion of co-CEOs. Something about the just-married matiness of joint bosses always rings false. Bill McDermott and Jim Hagemann Snabe seem to be reviving SAP AG, under chairman Hasso Plattner, but who did not cringe on reading the former's assertion in a joint interview last year that "we have a unique way of making one plus one equal three"? Wipro's 2008 decision to give the top executive job to two people was later defended by Azim Premji, the Indian group's chairman and majority owner, using similar mystic math: "We required the power of two, irrespective of the weaknesses of the power of two."
Most classic justifications for co-leadership fall apart under scrutiny:
1) It helps retain top management
But it is the antithesis of decisive executive recruitment to give both candidates the job, potentially confusing lines of authority to keep egos temporarily in check.
2) It aids succession
This is the reason used by family-owned groups trying to give the next generation an equal shot at the top. Think point 1), but with an added dose of toxic sibling rivalry.
The case study here is Robert Mondavi, the Californian wine dynast. He appointed his two sons as co-CEOs in 1990, but it took the intervention of family therapists to help unscramble the arrangement after it went badly wrong.
3) We can't split the founders
Co-founders often have complementary talents. But they don't have to be co-bosses. Over decades, Bill Hewlett and Dave Packard switched between president, CEO or chairman of the computer group they founded. They never held the same title simultaneously. When founders outstay their welcome, the co-CEO arrangement can make it harder for a board to unseat them.
4) Shared leadership is strong leadership
This may be the strongest justification. All corporate leadership is shared to some degree. Bob Frisch, a consultant, argues in his new book Who's in the Room? that it would be healthier for companies to recognize that most corporate decisions are inspired by a close-knit group of individuals – say, a triumvirate of CEO, chief financial officer and human resources director – outside the formal organization chart. But the CEO is solely accountable for the decision itself. "There always needs to be a tie-breaking authority," he says.
It may be significant that the current success of SAP's co-leaders comes under the watchful eye of Mr. Plattner. Or that Mr. Premji and Mr. Mondavi were there to disentangle the arrangement. In RIM's case, where the co-CEOs were also co-chairmen, a falling-out between the duo could have led to "mutually assured destruction," in the words of Lucy Marcus, professor of leadership and governance at Madrid's IE Business School.
For all the wrong reasons, boards will continue to endorse co-chief executives officers. Deutsche Bank's Josef Ackermann will shortly hand over power to two successors. The theory is that Anshu Jain will pursue the global strategy while co-chief Jurgen Fitschen will be the face of the bank in its home market. But to my mind, the messy process and outcome bode ill. Inevitably, all three men were at Davos last week – hardly a sign they're comfortable delegating or dividing their duties.