Two heads are better than one - or are they?


The Frenchman and German who jointly run the world's third-largest aerospace group are speaking with one voice for the moment anyway.

"We want to tear down national borders," declares Mr Rainer Hertrich, the Munich-based joint chief executive of the newly created European Aeronautic, Defence and Space Company (EADS).

Mr Philippe Camus, his Paris-based counterpart, insists they will not try to compete: "We need to keep this dual nationality at the top of the company."

Could joint chief executives such as Mr Camus and Mr Hertrich provide the model for corporate leadership in the future? Or will their relationship founder, like others before it, on cultural differences and the pitfalls of power-sharing?

One chief executive who has experience of sharing a top role has no doubts. "It will be war," he says.

History is against a lasting marriage. Relationships formed by "mergers of equals" often prove short-lived. The partnership between Mr John Reed and Mr Sandy Weill at Citigroup, the largest US financial services company, lasted only 18 months until Mr Reed of Citicorp stepped down as chairman and co-chief executive in April. The two men had different working styles. Since Mr Reed's retirement, Mr Weill, the former head of Travelers, has been busy stamping his personality on the group, most recently with the $31.1 billion purchase of Associates First Capital, the largest listed US finance company.

When Daimler-Benz and Chrysler merged in 1998, the co-chairmanship of Mr Jurgen Schrempp and Mr Bob Eaton was supposed to last three years. The impression that the Germans were in the driving seat was confirmed when Mr Eaton announced in January that he was stepping down.

The position of joint chief executive cannot be sustained, argues Mr James Citrin, a US partner of Spencer Stuart, the executive search firm, and co-author of Lessons from the Top, a series of interviews with 50 US business leaders.

"To have a single point of accountability supported by a group of leaders is the most stable structure," he says. "To have a joint accountability, even with the best of intentions and the strongest chemistry between the two leaders, inevitably leads to a diffusion of accountability." As a result, employees waste time on the politics of who makes which decision. "It's like children playing one parent off against another," Mr Citrin says.

This is not to say that a single individual is ideal either. Even Mr Citrin agrees that the traditional model of the solitary chief executive has to change. The demands of the job are increasing with the size and complexity of organisations and the expectations of the financial markets.

Globalisation and the Internet are reshaping organisations. Mergers, alliances and outsourcing are blurring boundaries and demanding more collegiate behaviour that ties cultures and interests together.

Andersen Consulting has drawn up a list of 14 skills that corporate leaders believe will be essential. Given that only super-humans are likely to excel in all of these, there is a case for shared leadership or teams at the top.

The intense pressures of the job are reflected in the fact that chief executives survive on average for only about four years at the top 100 companies in both the US and the UK. Suitable candidates are in short supply, resulting in long gaps in filling top posts.

In theory, then, two leaders can offer more of the required skills and experience between them than a single chief executive. If only the joint chief executives can avoid fighting each other, they should be better able to cope with the pressures of the job. So what promotes harmony between joint leaders? Growing up in the same company, with a common set of values, seems to be one ingredient for success. Unilever's long-standing dual chairmanship, reflecting its Anglo-Dutch shareholding, is a case in point. The role is currently split between Mr Niall Fitzgerald and Mr Antony Burgmans.

"They are a job-share. They both have very clear responsibilities and focus. If there's an issue about an acquisition in Latin America, one might take a lead on that," says Ms Debbie Jenkins, group personnel manager in the UK. "We also change our chairmen fairly regularly. They tend to be people who have been in the organisation for a long time and really know the values."

Duos and even trios are more common among start-up companies - another example of shared purpose. Mr Bill Gates created Microsoft with Mr Paul Allen. Mr Andy Grove founded Intel with Mr Gordon Moore and Mr Robert Noyce. Founder partnerships can last a long time. But a single chief executive generally emerges as the company grows up.

One of the most enduring such partnerships was at Accor, the French hotels group. From founding the company in the 1960s, Mr Gerard Pelisson and Mr Paul Dubrule ran it as co-chairmen for decades. Very different in looks and manner - Mr Pelisson a stocky southerner, Mr Dubrule a fair-haired northerner - they never took an important decision without consulting each other. Their double-act only came to an end in 1996 when they handed over to a single chief executive, Mr Jean-Marc Espalioux, an outsider from Generale des Eaux.

In the absence of a shared heritage, a more sustainable model for future leadership is that of the chief executive supported by a non-executive chairman, as is common in the UK, says Mr Citrin.

He points to the US media merger of America Online and Time Warner, where the planned leadership structure is Mr Steve Case as chairman, responsible for strategy and policy, and Mr Gerald Levin as chief executive, running day-to-day operations, backed up by Mr Bob Pitman and Mr Richard Parsons as co-chief operating officers. That, Mr Citrin argues, is a more stable arrangement than having joint chief executives.

In Europe, Fortis recently appointed its first chief executive after 10 years under the joint chairmanship of Mr Maurice Lippens and Mr Hans Bartelds. The two founders of the Belgian-Dutch financial group will continue as non-executive chairmen, playing an active role in determining strategy.

However responsibilities are split, effective teamwork at the top will become increasingly important.

"Larger organisations have to be global, and you'll see more and more that a team will lead them instead of one person," says Mr Fokko van Duyne, joint chief executive of Corus, the Anglo-Dutch steel group. "A one-man band is not possible and the CEO has to have a really good team."

The difficulties facing the steel industry present a challenge for the partnership between Mr van Duyne and Mr John Bryant, former chief executive of British Steel. Corus, which was formed from the merger of British Steel and Hoogovens of the Netherlands last October, has announced nearly 4,700 UK job cuts in recent months. While the two men emphasise shared responsibility for decisions, Mr van Duyne concentrates on strategy, finance and human resources and Mr Bryant on operations. They agreed that Mr van Duyne would chair the executive committee for two years, then it would be Mr Bryant's turn.

The combination is a good way to handle the merger, says Mr van Duyne. "But is it the answer for the future? I don't know."

At EADS, Mr Hertrich says two chief executives are needed because of the special nature of the aerospace industry. The group was formed from Aerospatiale Matra of France, DaimlerChrysler Aerospace of Germany and Construcciones Aeronauticas of Spain.

"Philippe has his network in France, to the government, to the customers, as I do in Germany. It would be extremely difficult to imagine a French CEO selling a fighter aircraft to the German air force chief. And I don't see myself selling the Tiger helicopter to the French army."

However he is understandably reluctant to give any hostages to fortune. "I don't want to speculate how long the duality will last," he says. "But we both have five-year contracts."