Is it Time to Go Co? The Pros and Cons of Co-Leadership

British department store Marks & Spencer’s was one of the latest large companies to announce that they were adopting a co-leadership structure. They now position themselves alongside such names as Salesforce, Netflix, and Goldman Sachs in this venture – and this has rekindled the debate over whether more organizations should consider a co-CEO format.

A recent study of 87 public companies with co-CEOs were found to produce more value for shareholders than their sole-CEO peers. Co-leaders generated an average annual shareholder return of 9.5% – significantly better than the 6.9% average for each company’s relevant index.

The study also found that co-CEO tenure was basically the same as sole-CEO tenure; about five years on average.

Despite these promising statistics, when we asked our followers on LinkedIn if they thought co-CEOs are a good idea, the results were divided nearly down the middle: 57% of respondents said no and 42% said yes.

Let’s explore some of the promising aspects of co-leadership, as well as some of the potential drawbacks.

Benefits of co-leadership:

• Shared Workload – the most notable benefit of having co-leadership is the ability to share the workload of a role that continues to become increasingly overwhelming. This is evidenced by the fact that 82% of CEOs experienced exhaustion indicative of burnout, and 96% felt their mental health had declined. By splitting the load, this helps mitigate the very real risk of CEO burnout.
• Diverse Perspectives – by combining different backgrounds, experiences, and viewpoints, decision-making can become much more well-rounded and creative. This also aids in addressing more complex problems that require innovative solutions. As the old adage goes, two heads are better than one!
• Complementary Skillsets – being in a leadership role requires a vast skillset, and there are a number of different leadership styles. Installing dual leadership can effectively bridge different styles and skillsets so the leaders complement each other through their individual areas of expertise. For example, one leader may be great in strategic planning while the other excels in execution.
• Resilience – another noteworthy co-CEO benefit is leadership continuity and stability for the team even when one CEO is absent, making the organization more resilient in the face of substantial change or crises.

Potential drawbacks of co-leadership:

• Power Struggles – one of the biggest potential drawbacks of co-leadership is the potential power struggle that may ensue. The world of work is accustomed to hierarchical working and there can be growing pains when this norm is challenged. One result can be co-leaders falling into the trap of having one considered the ‘main’ leader. For co-leadership to truly work, the leaders have to be entirely equal in their standing. This challenge can be further exacerbated by employees on the team, who may play each leader off the other – not dissimilar to how a child may challenge authority by asking two parents the same request in the hopes that one will say yes.
• Slower Decision-Making – co-leadership runs the risk of decisions being made a bit slower as they are made together. Even though the decisions will likely be assessed and thought through more thoroughly, this process can be time consuming.
• Inconsistent Messaging – if leaders are not completely aligned, conflicting messages may be given to the team, causing unnecessary confusion, and potentially damaging the trust employees have in their leaders.
• Relationship Compatibility – the effectiveness of co-leadership relies on the quality of the co-leader relationship. If this relationship deteriorates for whatever reason, it can have a spiralling negative impact on the entire organization.

As seen above, there are a number of ways co-leadership can lend to the success of an organization, and also a number of ways it could stunt this success. Context plays a key factor in deciding whether or not co-leadership is the right move for your business. For start-ups and smaller companies, as well as companies going through significant changes or mergers, co-leadership can be a fantastic tool to help these processes go smoothly.

It’s important to be able to recognize when co-leadership could be effective; a company may benefit from using the co-leadership structure at a certain point of development, but it may not be as beneficial later down the line.

I believe proper preparation is fundamental in mitigating potential co-leadership drawbacks. At the beginning of a co-leadership endeavor, both leaders can increase their success and effectiveness by having a dedicated coach to help them address workplace tension, optimize their skills, and complement each other rather than tread on each other’s toes. This same notion applies to the team as well. Offering them group coaching around what to expect and how to navigate being led by co-leaders can help avoid that ‘playing parents off each other’ scenario.

If you would like to discuss how we can help identify areas where co-leadership would be beneficial and support this implementation, please get in touch with me at amanda@orgshakers.com