Are two CEOs better than one?
Marc Benioff at Salesforce thinks so.
“CEO” is arguably the most prestigious role in a company. It’s the internal and external leader and face of the company. It’s a title few people ever attain — particularly at large public companies. With so much responsibility and pressure, it’s no wonder that it can get lonely at the top. Perhaps that’s why Salesforce has decided to promote COO Keith Block to become co-CEO alongside Marc Benioff.
Benioff founded Salesforce in 1999 and has been CEO eversince. In the two decades since its inception the company has grown tremendously. It has expanded across many product lines and completed multi-billion dollar acquisitions, including Demandware and Mulesoft. Keith Block joined the company in 2013, and became COO in 2016. Now the two are sharing the CEO role, with Benioff leading technology, marketing, and culture, while Block leads operations, execution, and growth strategy.
The dual CEO structure is highly unusual. So why is Salesforce putting this structure in place? What problems are they trying to solve? The setup raises a litany of questions. There are many ways for it to go wrong - from conflicting agendas to egos and company silos. When it comes to CEOs, two heads aren’t necessarily better than one.
What’s really going on?
The CEO position is the single point at the tip of the organizational pyramid. This gives the role a unique set of opportunities. It is the definitive source of vision and guidance, based on the most holistic perspective of the company. The CEO is the only person that has the entire organization under their purview. In the event of conflicts, the role also serves as the ultimate tie breaker.
Sharing the CEO role could give people the ability to collaborate in the role and leverage each other’s strengths. After all, Salesforce is a very large company and it’s certainly difficult to lead such a global, multi-faceted enterprise in fast-moving markets.
This shared approach to the CEO role sounds a lot like building a team.
For example, each member of Salesforce’s executive team is leading a part of the business in which they are uniquely skilled. They collaborate closely to employ each other’s strengths and lead a complex business together as a team.
If there’s already an executive team in place, then why is the CEO role being divided? Splitting the CEO role introduces a lot of new questions into the standard management structure. How does it change the roles of the CEO and the executive team? What problem is the new arrangement trying to solve? Does it really require two CEOs?
There are a lot of factors that need to be thought through and agreed upon. And because it affects the entire organization, it needs to be communicated and understood by everyone, not just the two CEOs.
What are the new roles of the CEOs?
Who is ultimately accountable for each business area?
The roles and accountability areas need to be extremely clear. There still needs to be a singular decision maker for each business area. If the CEOs can overrule each other’s decision in their business areas, it becomes very easy for confusion to arise. Team members can go decision-shopping among the CEOs, and people can get caught between competing priorities and strategies. In Salesforce’s case, this means Block needs to have final say over operations topics, while Benioff has final say over marketing and strategy. They are the sources of truth for their focus areas.
How are decisions made?
Which decisions can be made independently and which ones need to be explicitly agreed upon? When can one CEO speak on the others behalf?
Bottlenecks will arise if both leaders need to discuss and align on every decision before moving forward. The CEOs need to stay highly aligned. This can be difficult in a quickly changing, complex environment that requires lots of fast decisions. That’s why it’s worth agreeing to a certain decision-making process in advance, and being disciplined about following it. This way everyone can trust in a consistent and coordinated way of making decisions to keep the business moving forward.
What happens in a worst case scenario?
What happens when an agreement can’t be reached between the CEOs?
With no clear final tie-breaker within the organization this can turn into a very tense situation. It’s best to decide in advance how worst case scenarios will be handled. That way a mutually supported process is in place if things get messy or deadlock arises. Maybe the decision gets pushed to a board, or perhaps the chairman plays a more active executive role. Either way, it’s easy to see how disagreements can become complicated when two people are ultimately in charge.
How well do the two CEO’s really play together?
In many cases the two CEOs aren’t quite as equal as their titles suggest. In every group there is a dominant member, and the CEO role naturally attracts very ambitious people. As a result, power struggles can arise between the co-CEOs. This can be avoided if there is clarity around roles and decision making, but it highlights the importance of discipline and personal dynamics in a dual leader structure.
At Salesforce, the dominant leader is likely Benioff. He’s a founder of the company, chairman, and former single CEO. In fact, Benioff appears so clearly dominant that the risk of a power struggle feels very low. Given his level of success and his interests in philanthropy, this new structure looks more like a gentle succession plan or an opportunity for him to officially focus only on the business aspects he enjoys.
Finally, it’s great that the Salesforce team agreed to a predetermined sunset on the arrangement. This forces them to re-evaluate after a fixed period of time and see if their goals for the new structure are accomplished.
Summary: What does it mean?
While the dual-CEO structure can be complicated, it can executed effectively with proper discipline.
- Know the problem: First it needs to clear what problem the new arrangement is supposed to solve.
- Be clear: There needs to be clarity around the roles of the CEOs and of the executive team. Everyone in the company needs to understand which CEO is in charge of which parts of the business.
- Be specific about how to handle conflict: People need to understand how decisions are made in this more complex structure, and how disagreements are handled between the two leaders.
- Put in the effort: Great effort also has to go towards maintaining alignment so there is no room for competing agendas, strategies, or silos.
While it may work for Salesforce, in our opinion, this structure is generally not worth it. Instead it’s more effective to focus on building a strong and cohesive executive team. That provides all the benefits of a dual-CEO structure without the complexities and drawbacks.