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Helping Family Businesses
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Consulting the FBCG Oracle

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As you likely know from your own experience, many issues and decisions faced by family businesses do not have obvious solutions. This is often true for important dilemmas that call for us to make our very best judgments, but for which no one can give us a clear formula of how the “best” have answered this question because inevitably, the correct answer on what to do begins with: “It depends . . .”

An example of just such a question is one we hear often as part of the succession discussion: “Are Co-CEOs a recipe for disaster or do you find strength in numbers?” While we cannot propose a uniform answer to this question, we offer the wisdom from our collective experience with the “pros” and “cons” of this approach to leadership. You will notice these views are not all in direct alignment. Much as with a shared leadership situation, it is more complicated to try and integrate multiple points of view, yet it provides a richer range of answers and ideas from which to draw. It is our hope that you can use these insights to inform your thinking and help you clarify the questions you need to address, to arrive at the “right” answer in your business.

Viable Option When…/Ways to Consider It/Benefits

  1. Increasingly part of the landscape: 13 percent of family businesses currently have a co-CEO and more than a third are considering it.*
  2. The CEO role has become so large & complex, that in some cases it takes more than one person to do the job effectively, and it can be a benefit to have more talent at the top.
  3. Co-leadership can make a powerful team if the two have complementary skills: different styles and strengths, but where each respects the value of the other.
  4. The co-CEOs must be skilled listeners, and must set aside regular, private weekly meetings to touch base and talk through any issues.
  5. Optimally, the leaders should be able to share the role, even sitting in the same office with desks facing one another.
  6. I have seen several strong examples of co-CEOs and when it works, it is a powerful tool for success.
  7. This can only work if the co-leaders are totally aligned on strategic goals for the business.
  8. Boundaries of responsibility must be clearly defined for each leader, to ensure they do not step on one another’s toes.
  9. Co-CEOs must be able to work through their differences behind closed doors, and then always speak with one voice once the decision has been reached.
  10. As in a marriage, the two individuals must genuinely like one another as people and can optimally rely on humor and other interpersonal connections to get them through the inevitable “rougher patches.”

Poor Option When…/Shouldn’t Consider It/Risks

  1. Joint leadership should not be the solution when it is simply a cop-out or only a way to avoid a difficult decision; this will lead to failure in 99 percent of cases.
  2. Problems are likely if either or both of the prospective joint leaders have a lot of ego or needs to always get credit for the work they do.
  3. If employees and other key people in the business are unclear on who is in charge, this can lead to tension in the partnership if one feels undervalued, or less-popular than the other.
  4. The absence of objective metrics to determine if and how results are being met may lead to tension in the allocation of responsibilities.
  5. This cannot work unless both co-CEOs are strong communicators.
  6. The partners have to be willing to share power, which might be hard between family members, especially if there is any history of rivalry.
  7. Trust and respect between partners must be absolute & must be present in the broader family system as well. This is a lot to hope for in most companies, which is why it frequently fails in the end.
  8. Rotating the leadership role every few years is not a good option.
  9. If one of the leaders is objectively stronger than the other, this will lead to resentment and failure.

While our western model of business leadership assumes one person is at the helm, providing vision and direction for all, we know of many family companies that have thrived under joint leadership. Having said that, the one-leader model did not emerge without reason, and many businesses are best served with a singleton leader in the executive role. The take-home message: To determine if co-CEOs can be an asset to your business you must be honest with yourself on WHY this leadership approach can provide an advantage in your case, and IF the players being considered to co-lead are really up to the challenges this represents.

Note: If you are interested in learning a bit more, the subject of co-CEOs is addressed in our “Making Sibling Teams Work: The Next Generation” book from the Family Business Leadership Series.

*Mass Mutual/Raymond Institute Survey, 2003

 

 

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