The announcement last week that the Samsung Electronics is elevating two executives, Boo-Keun Yoon and J. K. Shin, to the CEO role was met with interest in leadership circles. We have seen this kind of co-CEO arrangement grow over the years. All the more interesting: the South Korean giant's current CEO and vice chairman Oh-Hyun Kwon isn't even vacating the seat. All three men will now share the role.
"We can do as partners what we cannot do as singles," the great orator Daniel Webster once proclaimed. That seems to be the belief in a growing number of boardrooms that have decided that power will not reside in a single person in the corner office. Shareholders evidently support the idea of "co-leadership." Research at the University of Missouri suggests that the mere announcement of a co-CEO structure produces a positive reaction from the market.
Boards who go for this kind of formal and equal power-sharing like three things about it. First, it retains talented executives in situations where they might have been lost to the outcomes of humiliating horse races. Second, it provides for continuity if a company loses a CEO (although it can also complicate succession). Third, it recognizes that all the skills desired in a modern CEO are hard to find in one person. The most successful co-CEO arrangements seem to capitalize on complementarities. Just as Bill Hewlett and David Packard brought different, but invaluable, attributes to Hewlett-Packard, Indian outsourcing giant Wipro turned to a tandem of the aggressive Suresh Vaswani and the understated Girish Paranjpe to lead its 50,000-plus work force through turbulent times.
Does it really work to have co-CEOs? It's hard to draw a definitive conclusion. There are companies where two heads have seemed to better than one, like J.M. Smucker, Whole Foods Market, Aéropostale, SAP. But for all the dynamic duos, there are also doomed ones. Companies that have struggled under co-CEOs include RIM, Goldman Sachs, Citigroup, Charles Schwab, Unilever, and EADS. Indeed, Wipro gave up on the model when competitors seemed to show greater agility, and unceremoniously fired both leaders. According to India's Economic Times, "Wipro tried to soften the blow by claiming that the joint-CEO model was at fault." But who's to say the successes wouldn't have been even greater, or the struggles even worse, under one CEO?
What is evident is that sharing the role causes some confusion and inefficiency. "I think co-leading is the unnatural act," says my colleague and leadership guru Warren Bennis, who, at 88, still teaches at the University of Southern California.
This is why the two of us, when we researched our book Co-Leaders, focused not on the few co-CEO arrangements but on the many very effective partnerships we found in the top ranks of organizations, most of which still featured a clear difference in formal power. The most productive relationships between No. 1 and No. 2 executives, we believe, are those of a leader and a chief ally. They may seem like buddies, even peers — but they remain committed to the principle of one-voice or single command. There has perhaps been no better example of this than the nearly five-decade partnership between Berkshire Hathaway's legendary chairman Warren Buffett and his trusted sidekick, vice chairman Charlie Munger.
More broadly, believing in co-leadership means acknowledging that many people are responsible when a company is successful. Our view of co-leadership rejects the notion that credit for any significant achievements rests with one, two, or three people at the top. Shorter product life cycles, global competition, and Space Age technology are making a fallacy of the time-honored notion that great institutions are the lengthened shadows of some one Great Man or Great Woman.
It's possible that South Korea's largest industrial will show us something new, and its three-CEO arrangement will be a model to emulate. Or it may have some special characteristics that make a top-level troika right for it. It is worth noting that Samsung means "three stars" in Korean giant. Its leadership innovation might be uniquely matched with the company's DNA.
But in this uniquely Confucian constellation, I expect that the recently elevated stars, Messrs. Yoon and Shin, will extend the honorific seonbae (literally "first") — a traditional sign of respect — to vice chairman Kwon. Meanwhile, Samsung remains tightly controlled by the founding Lee family. In other words, while the company says the new CEO promotions "will strive to clarify and enhance independent management," don't look for them to alter the firm's balance of power.