Togetherness at the Top
People admire charismatic corporate leaders such as Bill Gates and Jack Welch, but in most companies shared leadership roles are they key to success.
“When Two (or More) Heads Are Better than One: The Promise and Pitfalls of Shared Leadership” by James O’Toole, Jay Galbraith, and Edward E. Lawler III, in California Management Review (Summer 2002), Univ. of California, F501 Haas School of Business #1900, Berkeley, Calif. 94720–1900.
In the popular mind, and in Wall Street’s, too, business leadership almost invariably comes in the form of a single dynamic individual—a Jack Welch or a Bill Gates. In reality, say the authors, shared leadership is common, and often more effective than the solo sort.
Running a large corporation these days frequently calls for more skills than any one person is likely to have, observe O’Toole, Galbraith, and Lawler, researchers at the Center for Effective Organizations at the University of Southern California. Since World War II, the trend “has been away from concentration of power in one person.” This is reflected in—and also obscured by—the profusion of titles that have appeared at top corporate levels: chairman, chief executive officer (CEO), chief operating officer (COO), and the like. Sometimes, the joint leadership is undisguised. The Amana Corporation, with business units in areas as different as farming and tourist services, divided leadership along industry lines among four coequals in 1995, and only then began to make steady profits.
Shared leadership, the authors point out, can come about in different ways: “from corporate mergers of equals, from cofounders, from the practice of two individuals sharing jobs, and from invitations from sitting CEOs to share power.” Corporate mergers seldom produce successful teams at the top. Cofounders of a firm at least have chosen each other, but they, too, “often fail as coleaders because the skills needed to start a company are not the same as those needed to run it.” One exception is the case of William Hewlett and David Packard: Hewlett became the “heart” of their business machines firm, while Packard was “the hard-nosed businessman.”
Even Welch and Gates came to share power with others. In his two decades at the helm of General Electric, Welch had two or three vice chairmen (“elder statesmen”) in his office to complement his own skills. At Microsoft, Gates turned over his CEO job to collaborator Steve Ballmer but remained chairman of the board and head of software research.
Dividing responsibilities may be the easy part. The bigger challenge, say the authors, is deciding how to split the credit. “Coleadership has worked at Intel and TIAA-CREF because executives . . . are able to share the credit, and it has failed at Disney and Citigroup because of the egos rampant in the executive suites.”