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Leading a company is growing to be more complex, with many more responsibilities to take on, which has led to a renewed look at co-CEO models. Harvard Business Review published a study which revealed that 87 companies led by co-CEOs generated above average shareholder returns and nearly 60% of those companies outperformed. Keep reading to see the benefits of shared leadership and tips for making it work.
There are many benefits to shared leadership including:
- Bringing more diverse competencies and varied perspectives
- Ability to focus separately on unrelated areas and be in two places at once
- Work together to master the increasingly complex functions that CEOs are required to manage
- Better organisational performance
- Improves employee engagement and job satisfaction
- Representing more backgrounds
- Support each other
- Ensuring stability if one CEO leaves
In some cases, with having two-decision makers in power it could lead to conflict, inconsistency, confusion, mistakes or delays. However, the right conditions must be present for an effective partnership in this case:
Complementary skill set
Everyone has different personalities and if two co-CEOs have personalities that clash and cause conflict, the partnership will not run smoothly. The two leaders must have expert knowledge in varied fields that cover all bases of the company and be responsible for their own areas of expertise and strength. This divides responsibility and allows for more control, organisation, and success within these areas as they are getting more focus compared to one CEO being stretched out over all aspects of a company. Most importantly, both co-CEOs must have shared values of respect, honesty and trust.
The two CEOs must be fully willing to commit to the partnership. They must be prepared to compromise, share responsibilities but be there to support the other one if needed, communicate openly, want the absolute best for the company and understand the benefits of sharing leadership.
The previous point leads to the need for these responsibilities to be clearly divided, with both CEOs knowing which areas they are in control of the decision-making for. When a new responsibility comes up, the leaders must communicate who will take care of it and resolve that together.
Both co-CEOs must take full accountability of the overall performance and agree to be compensated equally. Even though responsibilities should be shared out clearly between the two leaders, they should not blame one another for issues being caused in the sectors of the company that one is solely responsible for.
The co-CEOs must understand each other’s communication skills and ways of working so conflict is minimised as much as possible. As well as this, an approach to conflict resolution must be set up so both leaders know what to do if conflict does arise. Whether it is during a stressful situation or not, both leaders must agree to discuss the issue till an agreement is made along with complete mutual respect.