Two IT heads not always better than one

Two IT heads not always better than one

Summary: Unless co-CEOs share common bond and purpose, joint-leadership model is likely to falter amid power clashes.

SHARE:

It's a case of two heads may not necessarily be better than one.

The number of chief executives running a tech company does not directly impact business performance, according to industry observers, who say single-CEO will remain the dominant leadership structure because communication lines are streamlined and organizational power clashes are avoided.

There is no right or wrong prescription for any particular leadership model for tech organizations, and likewise no clear-cut merits of using one over another, said Michael Jenkins, CEO of Europe and Asia at Roffey Park, a leadership and management institute.

When companies engage more than one CEO, the reason could be as simple as "two heads are better than one" especially since the IT sector moves fast and keeping ahead of the game is key, Jenkins said.

A CEO with technical or creative expertise to inspire product development may need a counterpart who is commercial-savvy and can deliver business results, he said.

Nonetheless, a multiple-CEO leadership model is a "brave concept" because it relies on these individuals to respect each other's judgment and put aside power and politics to work in an open, transparent way, he pointed out.

"This relationship is what will make or break the multiple-CEO model," Jenkins said.

In the case of Research In Motion (RIM), the former co-CEOs started out sharing an office but eventually relocated to the different areas they supervised, and also had different views on the strategic direction for the company, he noted.

Besides resilience and adaptability, Jenkins added that what drives a business to succeed is a common purpose upheld by the company's leaders, regardless of the number. As such, when there is more than one chief executive, it is crucial they all "live and breathe the shared purpose, and stick to it without fail", he explained.

In the future, he added, the current younger generation will be placed higher in the workplace hierarchy and this generation has been identified to be more individualistic than previous ones.

"As future CEOs, they will likely not want to share power, so they might find it more challenging to operate in a collaborative leadership model," he said.

One or many doesn't matter
Observers said the different companies--from RIM to software giant SAP--are proof the multiple-CEO model does not necessarily have an impact on business performance.

SAP has had two co-CEOs since 2010, while Chinese telecom equipment giant Huawei began a rotating panel of three CEOs in April this year.

RIM, in a bid to reverse continually poor sales, had its two co-CEOs step down in January this year and a single new leader take over. Indian IT company Wipro engaged a new CEO in early-2011 to replace the previous pair who were appointed in 2008.

Ray Wang, principal analyst and CEO of Constellation Research, said key functions in especially large organizations are sometimes too big for one person to handle and, thus, divided among more persons. This allows each leader to give a higher level of focus and dedication. "You have multiple CEOs when the company is big enough and the individuals have the same corporate rank," Wang said.

Like Jenkins, he agreed the number of CEOs does not have any correlation to a company's success or failure, compared to more decisive factors of competency, communication and accountability.

A multiple-CEO model that failed for some companies but not others is the result of the internal chain of command, Wang noted.

"At SAP, for example, the CEOs represent the company to the outside world. They report back to a supervisory board," he explained. "It's a unique structure, and the person calling the shots is still said Hasso Plattner at the end of the day," he said. Plattner is a SAP co-founder and chairman of the supervisory board.

But even with these successful examples of a multiple-CEO model, both observers agreed single-CEO will remain the dominant leadership structure among tech organizations.

It is best to have an organizational structure where communication is streamlined, Wang said, adding that it is also human nature to want a single line of reporting.

Topics: IT Employment, Tech Industry

Jamie Yap

About Jamie Yap

Jamie writes about technology, business and the most obvious intersection of the two that is software. Other variegated topics include--in one form or other--cloud, Web 2.0, apps, data, analytics, mobile, services, and the three Es: enterprises, executives and entrepreneurs. In a previous life, she was a writer covering a different but equally serious business called show business.

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.

Talkback

0 comments
Log in or register to start the discussion