Too Many Chiefs

Have you ever worked for a company that had Co-CEOs, where both were extremely strong personalities and didn't always see “eye-to-eye” on issues?  How about an indistinguishable chain of command?  Maybe it was a board of directors that didn’t understand or value the CEO/Presidents role in the organization, and took it upon themselves to give guidance to the staff directly.


These scenarios are played out in companies all over the world on a daily basis, and are causing trillions of dollars in lost productivity and missed opportunities.  It is impossible to get multiple personalities to agree consistently.  Trying is an exercise in futility, so preparing for the situation is an imperative.  If a company is to be governed by a board, the board needs to have an odd number of members to provide a "tie breaker" vote.  All of the board members need to commit to provide the appearance of agreement to staff once that vote has been settled in order to maintain a cohesive operation.  Daily operations require a clear chain of command so as not to be confusing to the team members.  The employees report to their managers, the managers report to the VP’s, the VP’s report to the President/COO/CEO (depending on structure), the President/ CEO reports to the board.  Simple right?  These are absolutes in business.  No “special circumstances” or “just this one time” scenarios.

When I was in my early twenties, I worked for a company that had four owners, three of whom worked in the company daily.  There were “official” titles for each of the owners, but all of the employees knew that the titles really didn't mean anything as they frequently made decisions in each others areas of responsibilities.  What happened when an employee didn't get the desired answer was akin to going to “ask Dad” when mom said “no”.  As you can probably imagine, this created a tremendous amount of tension among the partners and the employees alike.  Eventually, communication deteriorated into a completely dysfunctional mess and the company closed down, taking their investment and many years of service with it.


Co-CEO’s don’t work because in order to be a good CEO, a person must have certain leadership qualities.  Those very same leadership qualities make it very difficult to share the role.  I can hear many of you chiming in already, “What about Oracle, or Chipotle or Whole Foods, they have Co-CEOs?”  Yes, technically they do, but if you look at the division of labor, that is not necessarily the case.  In regards to Chipotle and Whole Foods, keeping the Founder in place as a Co-CEO was an effort to keep the “spirit” of the company alive while a stronger manager came in to bolster the systems.  In the case of Oracle, the two CEOs have very specific areas that they attend to, and cross the line only when the responsible Co-CEO is otherwise occupied.


If a company doesn’t define the roles very succinctly, with significant consequences for “crossing over”, the result is often chaos or worse.  It is better to title the roles closer to their actual duties.  If you are responsible for daily operations (sales, manufacturing, logistics, etc.) then a COO title is more appropriate.  If you are responsible for strategic vision, administration and acting as a liaison between the board and/or investors, that is more of a CEO role.


I can provide many examples where this type of situation became unworkable.  Big companies, small companies, and anything in between, are not immune to its effects.  In fact, sometimes the larger companies try to “correct” the issue by spending money on consultants, subject matter experts and lawyers, examining “problem areas”.  These areas are designated by leadership, deflecting their own culpability, and creating a loop that continues until the money runs out or one of the leaders gets frustrated and leaves!

To avoid this in your company, simply make sure that the roles are clearly defined, the penalties for crossing into another leaders area of responsibility are meaningful, the leadership respects each others role and how appearances effect the rank and file employees.  Simple Right?







Eric Johnson is  a Strategic Business Consultant, Executive Coach, Private Equity Investor, and has started 11 companies on his own.  For more information, go to www.JohnsonCapital.solutions 

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