The Power of Co-CEOs: Do Two Heads Really Lead to Better Results?

Have you ever wondered if having two CEOs running a company is more effective than having just one? In this episode, we delve into the world of co-CEOs and explore whether companies run by co-CEOs perform better than those run by solo CEOs.

Mark Feigen, a renowned CEO advisor, conducted extensive research on 2,200 large publicly traded companies. His findings were surprising: co-CEO pairs delivered annual shareholder returns nearly 40% higher than solo CEOs. This raises the question of why co-CEOs are not more common in the public markets.

While private companies often have co-CEOs, they remain a rarity in the public sphere. However, the benefits they offer are intriguing. Co-CEOs can provide each other with valuable coaching, serve as a sounding board for ideas, and prevent CEOs from making overly aggressive decisions. These advantages can lead to better overall performance and decision-making.

But, as with any management structure, there are challenges that come with co-CEOs. Role confusion and potential disagreements can hinder the effectiveness of this leadership model. The episode explores examples of companies like Blackberry and Allbirds, which had co-CEOs and faced significant challenges that ultimately led to their downfall.

Interestingly, research on pair programming in software development shows that pairs tend to produce higher quality work and report higher satisfaction. This parallels the potential benefits of co-CEOs in the business world.

Some experts argue that co-CEOs may not be widely adopted in large public companies due to fear of risk and role confusion. However, they may become more common in smaller companies seeking innovative leadership structures.

Throughout the episode, we encounter differing opinions on the effectiveness of co-CEOs. While some experts advocate for the model, others remain skeptical of its benefits. Join us as we explore the power dynamics and potential outcomes of having two heads at the helm of a company.

If two parents can run a family, why shouldn’t two executives run a company? We dig into the research and hear firsthand stories of both triumph and disaster. Also: lessons from computer programmers, Simon and Garfunkel, and bears versus alligators. 

RESOURCES:

• "How Allbirds Lost Its Way," by Suzanne Kapner (The Wall Street Journal, 2023).
• "Is It Time to Consider Co-C.E.O.s?" by Marc A. Feigen, Michael Jenkins, and Anton Warendh (Harvard Business Review, 2022).
• "The Costs and Benefits of Pair Programming," by Alistair Cockburn and Laurie Williams (2000).
• "Strengthening the Case for Pair Programming," by Laurie Williams, Robert R. Kessler, Ward Cunningham, and Ron Jeffries (IEEE Software, 2000).

EXTRAS:

• "The Facts Are In: Two Parents Are Better Than One," by Freakonomics Radio (2023).
• "The Secret Life of a C.E.O.," series by Freakonomics Radio (2018-2023).