After running Spotify for almost two decades, Daniel Ek recently announced that he would step down as CEO. Instead of naming one successor, he named two. In January, Alex Norstrom and Gustav Soderstrom will take over as co-CEOs of the music streaming app.
"This may sound a little cliche, but I do think that we both make each other much better," Norstrom said in a call with analysts Tuesday. "One plus one equals not three but five," he said.
Spotify is one of three large companies to name co-CEOs in rapid succession. The day before that announcement, Comcast said Mike Cavanagh would share the CEO title with Brian Roberts, the cable and media conglomerate's longtime leader. A week earlier, Oracle said Clay Magouyrk and Mike Sicilia would split the top role, replacing Safra Catz, once a co-CEO herself, at the tech giant.
Despite the burst, the setup remains rare. Only about 1% of the largest 3,000 public companies in the United States are run by two CEOs, according to the executive research firm Equilar.
But some market watchers say company boards may consider naming co-CEOs more often, for a few reasons.
Are two bosses better than one?
Adding a co-leader can help clarify a succession plan, which is how many interpreted Comcast's move.
Naming two CEOs also acknowledges increasingly complex business conditions, with leaders expected to have a handle on artificial intelligence and geopolitics in addition to sales pipelines and profit margins.
"How can a single human keep tabs on all things?" asked Anup Srivastava, a professor at the University of Calgary's Haskayne School of Business. Naming co-CEOs could be seen as preparing for a time when a company needs "different sets of competencies which perhaps cannot be managed by one person," he said.
The pipeline of people able to do everything expected of CEOs is another factor.
"We have a shortage of ready-now CEO players," said Jane Edison Stevenson, global vice chair of board and CEO services at Korn Ferry, an organizational consulting firm. "One way to try to solve that is to bring in two players with complementing skills."
The model is more common at European companies with a more egalitarian and consensus-driven culture, said Ryan Krause, a professor at the University of Iowa's Tippie College of Business. Spotify was founded in Sweden, and Germany's Deutsche Bank and the enterprise software company SAP have also had co-CEOs.
In the United States, co-leaders tend to be seen in the technology and creative industries, which "have little compunction about throwing off tradition," Krause said.
And for a few companies, having co-leaders is the tradition. Henry Kravis and George Roberts ran the private equity giant KKR in tandem from its earliest days. When they passed the baton in 2021, they named two successors: Joe Bae and Scott Nuttall.
"We believed this to be a good model because it had worked for us," Kravis explained. He and Roberts are now co-executive chairs.
How does it work in practice?
Gensler, one of the world's largest architecture firms, has maintained the model for 20 years. Since last year, the roles have been filled by company veterans Elizabeth Brink and Jordan Goldstein.
Goldstein, who is based in Washington, said he and Brink, who is based in Los Angeles, are in "constant, iterative dialogue." Either one can take the lead with clients, and set up meetings on his or her own, although since they are constantly texting, each typically knows what the other is doing.
"We really get the benefit of all of our different perspectives onto a problem and onto the challenges," Brink said in a joint interview (naturally) with Goldstein.
To make it work, both have to be "willing to sometimes bend and compromise," she added. "That takes a lot of trust and putting your ego aside."
When two chiefs bring grief
In his research, Krause of the Tippie College of Business found that American firms with co-CEOs performed better when there was a moderate power imbalance, as measured by pay, a seat on the board or other proxies. (At Oracle, Magouyrk received stock options worth $150 million more than his co-chief's.)
From 2000 to 2011, Krause and his co-authors found, co-managed companies with more equal executive partnerships were less profitable.
But in another study, spanning 1996 to 2020, researchers found that the stocks of companies with co-CEOs had generated a better return than industry indexes, implying that companies with two chiefs performed better on average than those with just one.
Still, given how few companies have co-CEOs -- fewer than 100 in both studies -- it is difficult to draw sweeping conclusions.
SAP, which had co-CEOs off and on for several years, abandoned that structure five years ago when Jennifer Morgan's departure left Christian Klein as the sole leader.
At the time, during the early stages of the COVID-19 pandemic, the company said that "the current environment requires companies to take swift, determined action which is best supported by a very clean leadership structure."
Stevenson of Korn Ferry said that during volatile times, adding an "additional layer of complexity" at the top could confuse employees and muddy responsibilities. "It could potentially drain their energy as opposed to enhance their energy," said Stevenson, who has worked with a pair of co-CEOs.
Continuity also starts with 'co'
The newest batch of co-CEOs may be adopting a rare title, but their roles may not be so newfangled. All will be running companies alongside founders, or members of founding families, who emphasized continuity when promoting their trusted lieutenants.
Larry Ellison, an Oracle founder, is the company's chair and chief technology officer. Ek is set to become executive chair at Spotify. And Brian Roberts (a son of Comcast's founder) will keep his role as chair in addition to co-CEO.
At Spotify, the move "simply matches titles to how we already operate," Ek explained. Instead of reporting to the board, the co-CEOs will serve under Ek.
"They're the ones making the decisions," he told analysts. "But I will be there as a friend, a coach, a cheerleader, whatever I'm needed to do for the day."
This article originally appeared in The New York Times.
"This may sound a little cliche, but I do think that we both make each other much better," Norstrom said in a call with analysts Tuesday. "One plus one equals not three but five," he said.
Spotify is one of three large companies to name co-CEOs in rapid succession. The day before that announcement, Comcast said Mike Cavanagh would share the CEO title with Brian Roberts, the cable and media conglomerate's longtime leader. A week earlier, Oracle said Clay Magouyrk and Mike Sicilia would split the top role, replacing Safra Catz, once a co-CEO herself, at the tech giant.
Despite the burst, the setup remains rare. Only about 1% of the largest 3,000 public companies in the United States are run by two CEOs, according to the executive research firm Equilar.
But some market watchers say company boards may consider naming co-CEOs more often, for a few reasons.
Are two bosses better than one?
Adding a co-leader can help clarify a succession plan, which is how many interpreted Comcast's move.
Naming two CEOs also acknowledges increasingly complex business conditions, with leaders expected to have a handle on artificial intelligence and geopolitics in addition to sales pipelines and profit margins.
"How can a single human keep tabs on all things?" asked Anup Srivastava, a professor at the University of Calgary's Haskayne School of Business. Naming co-CEOs could be seen as preparing for a time when a company needs "different sets of competencies which perhaps cannot be managed by one person," he said.
The pipeline of people able to do everything expected of CEOs is another factor.
"We have a shortage of ready-now CEO players," said Jane Edison Stevenson, global vice chair of board and CEO services at Korn Ferry, an organizational consulting firm. "One way to try to solve that is to bring in two players with complementing skills."
The model is more common at European companies with a more egalitarian and consensus-driven culture, said Ryan Krause, a professor at the University of Iowa's Tippie College of Business. Spotify was founded in Sweden, and Germany's Deutsche Bank and the enterprise software company SAP have also had co-CEOs.
In the United States, co-leaders tend to be seen in the technology and creative industries, which "have little compunction about throwing off tradition," Krause said.
And for a few companies, having co-leaders is the tradition. Henry Kravis and George Roberts ran the private equity giant KKR in tandem from its earliest days. When they passed the baton in 2021, they named two successors: Joe Bae and Scott Nuttall.
"We believed this to be a good model because it had worked for us," Kravis explained. He and Roberts are now co-executive chairs.
How does it work in practice?
Gensler, one of the world's largest architecture firms, has maintained the model for 20 years. Since last year, the roles have been filled by company veterans Elizabeth Brink and Jordan Goldstein.
Goldstein, who is based in Washington, said he and Brink, who is based in Los Angeles, are in "constant, iterative dialogue." Either one can take the lead with clients, and set up meetings on his or her own, although since they are constantly texting, each typically knows what the other is doing.
"We really get the benefit of all of our different perspectives onto a problem and onto the challenges," Brink said in a joint interview (naturally) with Goldstein.
To make it work, both have to be "willing to sometimes bend and compromise," she added. "That takes a lot of trust and putting your ego aside."
When two chiefs bring grief
In his research, Krause of the Tippie College of Business found that American firms with co-CEOs performed better when there was a moderate power imbalance, as measured by pay, a seat on the board or other proxies. (At Oracle, Magouyrk received stock options worth $150 million more than his co-chief's.)
From 2000 to 2011, Krause and his co-authors found, co-managed companies with more equal executive partnerships were less profitable.
But in another study, spanning 1996 to 2020, researchers found that the stocks of companies with co-CEOs had generated a better return than industry indexes, implying that companies with two chiefs performed better on average than those with just one.
Still, given how few companies have co-CEOs -- fewer than 100 in both studies -- it is difficult to draw sweeping conclusions.
SAP, which had co-CEOs off and on for several years, abandoned that structure five years ago when Jennifer Morgan's departure left Christian Klein as the sole leader.
At the time, during the early stages of the COVID-19 pandemic, the company said that "the current environment requires companies to take swift, determined action which is best supported by a very clean leadership structure."
Stevenson of Korn Ferry said that during volatile times, adding an "additional layer of complexity" at the top could confuse employees and muddy responsibilities. "It could potentially drain their energy as opposed to enhance their energy," said Stevenson, who has worked with a pair of co-CEOs.
Continuity also starts with 'co'
The newest batch of co-CEOs may be adopting a rare title, but their roles may not be so newfangled. All will be running companies alongside founders, or members of founding families, who emphasized continuity when promoting their trusted lieutenants.
Larry Ellison, an Oracle founder, is the company's chair and chief technology officer. Ek is set to become executive chair at Spotify. And Brian Roberts (a son of Comcast's founder) will keep his role as chair in addition to co-CEO.
At Spotify, the move "simply matches titles to how we already operate," Ek explained. Instead of reporting to the board, the co-CEOs will serve under Ek.
"They're the ones making the decisions," he told analysts. "But I will be there as a friend, a coach, a cheerleader, whatever I'm needed to do for the day."
This article originally appeared in The New York Times.
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