Co-CEOs Might Be Increasing, But Do They Mean Twice the Trouble?
First published on Forbes, Nov. 9, 2017.
Co-founders are the norm in startups, but as they grow, one person often stays CEO, while the other assumes another title. If you had asked me a year ago if I’d encourage a co-CEO relationship, I would have said, “Absolutely not! That sounds like a nightmare for role clarity, responsibility and ego battles, not to mention the confusion it could cause for employees and customers.”
However, Gen Xers and millennials are taking entrepreneurship to a new level. While they are creating innovative products and services, they are also innovating the way leadership works. If a strong partnership started the company, can that same partnership also take it from no revenue to billions in revenue? While I don’t think it would work for everyone, the following will describe how I opened my mind to this approach and the tips you should follow if you are considering this structure.
My journey in understanding this new way of leading organizations came about when I was finalizing a contract with Rightpoint. I was nervous about their co-CEOs co-owning the contract. How would I know who had the final say on our work? If they disagreed, would I be trapped in an eternal lack of sign off?
Not at all! Within minutes of meeting co-CEOs Brad Schneider and Ross Freedman, I could tell they were very much in sync with each other and also had different strengths which benefited our work together. Honestly, it made me a bit jealous to think how great it would have been to have had a business partner when starting my company.
After seeing how well this works for Brad and Ross, and knowing how common this may be in today’s entrepreneurial culture, I decided to see how other organizations are making it work too. Brad and Ross call their foundation of trust “the biggest success factor” in what drives them forward as leaders. I have found trust to be a main ingredient for co-CEO success, along with the following critical actions.
1. Ensure clear division of responsibilities.
Brad and Ross agreed they would divide and conquer from day one and chose their divisions based on strengths and passion. I worried employees wouldn’t know who to go to for what, but Rightpoint’s senior vice president of design and strategy noted that what makes them a high-performing team is that they have a clear delineation of responsibility. Brad focuses on operational excellence and Ross on strategic growth.
Beth Gerstein and Eric Grossberg, co-CEOs of Brilliant Earth, owe their success to having “a clear division of responsibility that ensures quick decision-making and clarity of ownership across the organization.”
Having two at the helm requires you to have clear lines of responsibility to avoid duplicating efforts and to delineate for employees and customers who does what. At the end of the day, most CEOs come with a particular set of skills or interest from previously having been a CMO, CFO, COO, etc. So in this model, they actually provide more balanced oversight for key areas of the business.
2. Stay in your lane.
You must know your and your co-CEO’s strengths and respect what each of you has to offer. This requires checking your ego at the door and allowing your co-CEO to fully own their areas of expertise. You should still check with each other to ensure overall business alignment. However, you both came in with a clear set of skills on which you should capitalize.
Shannon Miles, co-CEO of Belay, urges co-CEOs to “resist operating as the other person would operate.” If you try to behave like you are one person, you will fail. Be sure to be yourself and defer to the other on their areas of expertise.
Still concerned that co-CEOs can’t work? Belay averaged 314% growth from 2015 to 2017 and was named on the Inc. 5000 list of fastest-growing private companies.
3. Disagree productively.
There cannot be an attitude of “scoring points” or competing with your co-CEO. Your employees, customers and investors need to see a united front.
If you do disagree, Brad suggests having those conversations behind closed doors. Establish an agreement up front as to when you will keep disagreements between the two of you when you’ll get a gut check from a trusted third party and when you’ll seek input from the whole team.
4. Commit equally.
Two individuals cannot even consider a co-CEO relationship unless they are equally invested in the company — this means time, emotion and money. You must go into business “on equal footing and move at the same speed,” says Tina Hodges of Advance Financial in Nashville.
You absolutely must agree on mission, vision and leadership values to make sure you are aligned on goals and expectations. These are vital for the entire C-suite of any company, but in a co-CEO relationship this foundation must be unshakable.
5. Treat your relationship like a marriage.
Trust, open communication and shared goals are crucial to co-CEO relationships. Matt Jung, co-CEO of FABulator, says, “Treat your relationship like a marriage” and warns against not aligning in front of the team or leaving each other out of a major decision. Just like parents don’t want their kids to play them against each other in a decision about whether they can go skydiving, as co-CEOs you need to ensure a united front to drive growth and innovation while not taking risks that are too big.
Also similar to a marriage, co-CEOs who are great partners can serve as role models to everyone in the organization. If the co-CEOs trust each other, share decision making and align on what’s best for everyone, that sets the expectation that all leaders and employees throughout the organization should do the same.
What does all this mean? While it’s always crucial to know who is in charge of what, we now live in a world of startup partnerships that grow into large, thriving organizations. If you are considering a co-CEO relationship, be sure you have a foundation of trust, equal commitment, recognized strengths, clear responsibilities and, most importantly, shared values and goals.