Should Your Startup Have Two CEOs?
Does it make sense to split the duties of a CEO in order to make a company stronger and more effective?
Let me first make it perfectly clear that I understand the disaster scenario. Two leaders means a series of split decisions and bickering. Two leaders means mixed messages and incongruent priorities. Two leaders means everyone has two bosses.
So first, let’s think about why any company would want two CEOs. It starts with some undeniable problems bubbling at the top level of startup leadership.
There’s Just Too Much To Do
Raise your hand if you’re a CEO with some free time.
I’ve been in startup for over 20 years, and the amount of work I’ve seen loaded onto a CEO’s shoulders (including my own) has increased steadily throughout that time. I get it, I understand the notion that a CEO has to be worked to the bone and give 110%. But the math on giving 110% usually breaks down to giving 10% on 11 different things.
Now, at the beginning of a startup’s life, when the team is small and everyone is wearing multiple hats, it absolutely makes sense to have one leader that drives all the strategy and makes all the decisions.
But as a startup grows, I’ve seen young CEOs wobble and even crumble under the strain, and either do irreparable damage to the company or get themselves replaced.
I’ve also seen instances where an experienced CEO is expected to handle almost every public-facing aspect of the company. But they rarely ever get to delegate the rest of the CEO-centric duties, namely, decisions, strategy, internal leadership, product and company growth, industry positioning, and creativity. All the stuff that made them a great CEO in the first place.
Again, some of them can handle this just fine. But a lot of the young CEOs I mentor or talk to are just tired. Exhausted. Physically and mentally spent. That’s not a good place to lead from.
Single Point of Failure
Another issue I see time and again as a startup grows is too much power and responsibility get tied up in one person. It’s the classic single point of failure.
If the CEO ever quits (been there), gets replaced (been there), or just suddenly goes up their own butt (yeah, been there), the entire company is left in a vacuum from which they’re not emerging any time soon.
Even with something as simple as the CEO taking a vacation, one of two things will usually happen. One: The CEO works through the vacation, poorly, and doesn’t get a much needed sanity break. Two: Another executive whose job it isn’t is left in charge, but that person doesn’t have any real authority.
When a CEO leaves or gets replaced, usually the standard protocol is to bring in an outsider with CEO experience and, usually, this is a disaster that plays out very slowly and painfully.
If the company does have the sense to create a succession plan ahead of time, there’s usually a jockeying within the executive level for that job. Then we have the entirety of upper management all trying very hard to show that they think, talk, and act like the current CEO. This is paralyzing. Also, after the selection of the successor, a lot of the executive team will quit out of spite anyway.
All of these things happen. Often. You probably have your own personal experience with one or more of those scenarios.
So is the answer a second CEO? Well, if it is, here’s what it would look like.
I’m not talking about a co-CEO, or CEO Jr., or a CEO successor. This is CEO2, more like substitute CEO or Vice CEO or, if it helps to make it easy to picture, a CEO body double that thinks for itself.
I’m not talking about the CTO or the COO or the CFO laying in wait for the top job either. For the good of the company, the CTO has to be in complete charge of the technology, the COO has to focus 100% on the operations, and the CFO needs to know where every penny is.
Managing Up and Down vs. Out and In
How do we split the duties? It goes back to the original role of the CEO, leading the company both internally and externally.
Until the company starts to scale, the CEO’s responsibilities focus on managing up (the board, the investors) and managing down (the employees).
As a startup grows, it gets harder for the CEO to manage down. Not only in terms of the logistics of running a company with 50 or more employees, but also in adopting the style changes necessary to manage down at later stages. On top of that, the demands of managing up are also growing, and when the CEO has to choose which direction to manage, they’re kinda required to choose the board and investors.
Furthermore, as growth accelerates, the CEO needs a CTO to manage the technology, a COO to manage the operations, and a CFO to manage the finances. This lets the CEO manage out (the market, the customers) and in (the product).
But sustained growth makes it difficult for the CEO to manage in (the product). This is almost always strictly due to the demands to drive revenue (the market and the customers). The constant focus on sales, market penetration, and partnerships leave no time to consider the creative choices that should be made to evolve the product.
Managing down and in is where the CEO2 could fortify the CEO position. That’s not to say there should be an even split, but a CEO2 should be able to stand in for the CEO and advocate for the employees, the product, and the customers when the CEO is landing funding and more and bigger customers and windfall partnerships.
The Body Double
So who is the perfect CEO2? Keep in mind this person has to have the authority to make the same kinds of decisions the CEO makes, especially in the absence of the CEO. This is no junior executive position. The CEO2 is someone who could be the CEO at another company.
It also has to be someone who has the same vision as the CEO, and the two of them need to be tightly aligned. While the CEO2 may bring a different perspective to the problems and the strategy, they should defer to the CEO on all decisions. And while the CEO has final authority, they have to be willing to let go of whatever they delegate, and live with the decisions made by the CEO2.
Finally, both the CEO and CEO2 have to be able to check their egos. It takes a ton of trust. But a different viewpoint on the same problem from someone with the same priorities can be a total lifesaver. It gives the CEO the ability to keep an overview at a high level, and maintain leadership over all aspects of the company without feeling like they have to know everything about everything and be everywhere at once.
The Culture of Shared Responsibility
This is actually already happening, we’re just not giving the CEO2 a name yet.
Startup org charts are staying flatter for longer. Smart people, especially smart young people, are starting to realize that leadership has more to do with consensus than instinct. They’re starting to discover that titles and middle management and chains of command can sometimes breed complacency, repetition, and uselessness.
They’re solving this with shared responsibility.
Orgs are starting to pod up and let those pods act independently, with autonomy and authority. Technology has become so ubiquitous in the work force and so easy to manipulate that the focus of the org structure is shifting from authority to usefulness. It’s about creating the most value and rewarding within the margins.
So shared responsibility is no longer a trend, it’s quickly becoming a necessity, the norm. It might soon be time for forward thinking companies to bring this kind of thinking all the way to the the top of the organization.