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WeWork bet on the co-CEO approach after demoting Adam Neumann. Here are 6 companies that have done the same, including Deutsche Bank and Warby Parker.
WeWork bet on the co-CEO approach after demoting Adam Neumann. Here are 6 companies that have done the same, including Deutsche Bank and Warby Parker.
Ivan De LuceSep 26, 2019, 23:51 IST
We Company; Samantha Lee/Business Insider
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After demoting Adam Neumann, WeWork became the latest to join the list of major companies who have opted for a co-CEO approach.
Some companies see success when power is split between two chief executives, like Warby Parker or Oracle, while others buckle under the pressure, like Deutsche Bank.
Here are three notable companies that saw massive success with two CEOs at the helm, and three that were eventually had the duo replaced by a sole CEO.
Companies with co-CEOs see either long-lasting success or unceremonious failure. And the latest company to try the model out is WeWork, as cofounder Adam Neumann announced he would step down from the role on Tuesday.
WeWork's new co-CEOs, Artie Minson and Sebastian Gunningham, will face plenty of challenges as they work to stabilize the startup as it heads toward a public offering - chief among them the hurdles specific to power-sharing arrangements. While companies across industries have relied on CEO pairings to guide massive ventures, the track record on this practice is mixed at best.
Companies with co-CEOs have sometimes struggled over extended periods to refine their strategy and establish clear lines of power, say those who study executive structures.
While it's been said that the co-CEO strategy is dead, several companies, like eyeglasses-darling Warby Parker and investment firm KKR demonstrate otherwise. Companies like Deutsche Bank and BlackBerry-maker Research in Motion, however, have both had co-CEOs step down simultaneously.
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Here are six co-CEOs who found the perfect balance and led their companies to success, and six who couldn't play nice and ended up off the job.
1. Warby Parker is run by co-CEOs Dave Gilboa and Neil Blumenthal
Warby Parker co-CEOs Dave Gilboa and Neil Blumenthal worked in consulting before founding the eyeglasses company in 2010. Since then, their direct-to-consumer model has grown the company to a $1.2 billion valuation and 115 locations in the US and Canada.
Gilboa and Blumenthal previously spoke with Business Insider about one of their strategies for running a company as co-chiefs: be deliberate in order to beat competitors.
"Everything is not what it seems," Gilboa and Blumenthal said. "Peek behind the curtain at a bunch of organizations, and it's not as tightly organized or well-run as you'd expect. There's so much opportunity for people to be more thoughtful.
"Being thoughtful and deliberate in one's approach is a big competitive advantage," they added. "The most thoughtful company wins."
2. Deutsche Bank's co-CEOs were forced to resign in June 2015.
Former Deutsche Bank AG co-CEOs Anshu Jain and Jürgen Fitschen resigned after a restructuring plan, announced in April 2015, that resulted in thousands of job cuts and branch closures.
Then, during an annual meeting in May 2015, the executives received a record-low 61% approval rating from shareholders. By then, according to the Wall Street Journal, it was clear Jain and Fitschen were no longer wanted.
Another omen was an anonymous letter sent to Deutsche Bank employees that same month titled "Wind of Change? Wind of Jain." In it, labor-union representatives called for Jain's resignation. Both bank branch workers and some corporate-level employees told the Wall Street Journal the letter resonated with them.
3. KKR is run by co-CEOs Henry Kravis and George R. Roberts.
Since its founding in 1976, investment firm Kohlberg Kravis Roberts (KKR) has been headed by cousins Henry Kravis and George R. Roberts. The third founder, Jerome Kohlberg Jr., resigned in 1987 amid disagreements in strategy.
In the last 40 years, KKR has grown into one of the largest investment firms, with $200 million in assets. Though both Kravis and Roberts are 75, they have no plans to retire. But they do have a plan of succession in place.
In 2017, they named Joseph Y. Bae and Scott C. Nuttall as KKR's co-presidents and co-COOs, with the intention of keeping them in mind as candidates when they retire, according to a report by the New York Times.
4. Research In Motion's co-chiefs stepped down in 2012.
Research In Motion (RIM), the maker of the BlackBerry, was led by co-CEOs Jim Balsillie and Mike Lazaridis until 2012, when they stepped down amid tanking shares and the general consensus that BlackBerry products were far behind in the tech world.
Balsillie, who was in charge of RIM's strategy, corporate development and finance, was brought on in 1992 by Lazaridis, who cofounded RIM with childhood friend Douglas Fregin and led the company's research and development. The two teamed up for nearly two decades. But their efforts to keep RIM afloat didn't work.
After their resignations, Lazaridis stayed on as the vice chairman of RIM's board, and Balsillie remained a member of the board.
5. Oracle had been run by co-CEOs Mark Hurd and Safra Catz, until Hurd took leave due to illness.
Oracle Corp. co-CEOs Mark Hurd and Safra Catz stepped into their roles when then-CEO Larry Ellison stepped down 2014 to become Oracle's CTO and executive chairman.
"We're a big company," Hurd said. "This is bigger than the salesforce. It's bigger than Safra and me. Bigger than Larry, Safra and me. ... It's the development team, other teams. We have over 130,000 people. We need a lot of leadership in our company."
Earlier this month, however, Hurd took a medical leave of absence for unspecified health issues. While it's unknown when he plans to return, Catz will continue as Oracle's sole active CEO.
6. Chipotle's co-CEO stepped down, leaving its founder at the helm.
After Chipotle's 2016 E. coli outbreak, sales plummeted. Co-CEOs Steve Ells and Monty Moran faced pressure from investors to restore customer confidence, but by the end of the year, they wanted Ells, who founded the company, to resume solo leadership. Moran was added as co-chief in 2009 to split duties with Ells, but that structure had become "over-complicated," according to Ells.
"Given the ongoing challenges facing the company, the board felt strongly that it was best for Steve to resume leadership of the company going forward," Neil Flanzraich, the lead director of Chipotle's board, said in a statement.
Since then, Ells stepped down as CEO in November 2017. Brian Niccol, who served as Taco Bell's CEO for three years, took over in March 2018.
