--- title: "Two people at the top: when does it actually work?" description: Co-CEO companies tend to win big or lose big. What Netflix, SAP and Salesforce show about why, and what it means for a Japan entity run by two heads. image: https://nobusato.jp/hubfs/when-two-heads-work-cover-en.png --- [Nobu Sato](https://nobusato.jp/en?hsLang=en) [Home](https://nobusato.jp/en?hsLang=en) [Profile](https://nobusato.jp/en/profile?hsLang=en) [Articles](https://nobusato.jp/en/blog?hsLang=en) [Contact](https://nobusato.jp/en/contact?hsLang=en) [日本語](https://nobusato.jp/ja/blog?hsLang=en) [English](https://nobusato.jp/en/blog?hsLang=en) [中文](https://nobusato.jp/zh/blog?hsLang=en) [Launching in Japan](https://nobusato.jp/en/blog/tag/launching-in-japan)[Organizations & Hiring](https://nobusato.jp/en/blog/tag/organizations-hiring) # Two people at the top: when does it actually work? ![Diagram of two co-leaders, a referee and the seam between their domains](https://nobusato.jp/hs-fs/hubfs/when-two-heads-work-cover-en.png?width=1200&height=630&name=when-two-heads-work-cover-en.png) Two people at the top is neither good nor bad. It's an amplifier. Get the conditions right and you add up two people's strengths. Get them wrong and you add up their friction. Last month I wrote about [Audi's first year in F1](https://nobusato.jp/en/blog/audi-f1-org-talent-map?hsLang=en). I ended by saying dual leadership tends to lose people and single leadership tends to burn people out, and that I had only two samples: Audi, and a team I built in Taipei. Two isn't a pattern. So I went looking for more. ## What the numbers say A 2022 Harvard Business Review study looked at about 2,200 listed companies from 1996 to 2020. Fewer than 4% had co-CEOs, 87 in total. While the pair was in charge, those firms returned 9.5% a year to shareholders, against 6.9% for their index. Nearly 60% outperformed. Average tenure was about five years, the same as solo CEOs. A 2011 study was more cautious. Co-led firms often got higher valuations, but there was no clear sign of better operating performance. Netflix co-CEO Greg Peters has said the data shows co-led companies either clearly beat their peers or clearly trail them. Few land in the middle. That's why I think of it as an amplifier. The useful question is what the conditions are. ## One company, two outcomes SAP is a good test case because it has used co-CEOs several times. Founder Hasso Plattner shared the job with Henning Kagermann from 1998 to 2003. Later Jim Hagemann Snabe and Bill McDermott ran the company together for four years before McDermott went solo. Snabe's exit was announced ten months ahead. In October 2019 McDermott left suddenly for ServiceNow, and SAP named Christian Klein and Jennifer Morgan co-CEOs. Six months later, in April 2020, Morgan left and Klein became sole CEO. SAP said the crisis called for clear, unambiguous steering. Same company, same chairman, same model. The first two pairings held. The third lasted six months. The difference I see is that the first two were designed and the third was forced by an event. The board needed someone in the seat fast and didn't want to lose either candidate, so it appointed both. That kind of setup feels temporary from day one. When COVID hit, the board handed the wheel back to one person. Folding back to one leader in a crisis isn't a failure in itself. But it tells you most boards see co-leadership as a peacetime structure. If you design one, decide on day one who folds it in a crisis, and who gets the wheel. ## The founder's "co" Salesforce tried twice. Keith Block became co-CEO in 2018 and left in 2020. Bret Taylor became co-CEO in late 2021 and was gone a little over a year later. Both times, the one who left was not Marc Benioff. One commentator put it plainly. Benioff wasn't ready to share power in what he saw as his company, and the co-CEO title was partly a way to keep top talent. I see this often. A founder puts a professional executive beside them and hands over a "co" title. On paper there are two leaders. In practice there's one leader and a number two with a leader's title. A title can keep someone for a while, rarely for long. They soon notice they got the title without the final say. And anyone worth keeping with a title has other options. ## The pair that works At Netflix, Reed Hastings became executive chairman in 2023, and Ted Sarandos and Greg Peters became co-CEOs. Sarandos runs content, marketing and communications. Peters runs product, engineering, advertising and operations. When he announced it, Hastings wrote that the three had worked closely together in different roles for 15 years, through wins and failures. Day to day, each runs his own lane. Big strategy calls they make as one. When they disagree, Hastings is still around to advise. Peters has said the deciding factor is whether both leaders believe in the model, rather than treating it as a compromise to work around. Put the three companies side by side and four questions come out. Netflix2023–SAP2019–2020Salesforce2018–2023My Taipeitwo topsBeen through it together✓15 years✗rushed pairing—not public✗never met beforeSplit on a real seam✓content / product—not public—not public✗same job twiceA referee both accept✓Hastings—not public✗referee is one of them✗referee leftChosen, not patched✓designed✗forced by an event✗partly retention✓designed for redundancyOutcomestill runningback to one in 6 monthsboth co-CEOs leftone of them left **Fig.1**Four questions, three companies and one case of my own. A dash means it isn't visible from public information. **Have they been through something hard together?** Netflix: 15 years. SAP's last pair was put together in a hurry. **Does the split follow a real seam in the business?** Content and product are the two natural halves of Netflix, each with its own way of judging success, so neither needs the other's sign-off very often. I'm skeptical of splits like "strategy vs. execution" or "internal vs. external." Every execution call contains a strategy call, and every external promise has to be delivered internally. The two people end up on each other's turf every day. **Who settles a disagreement?** Netflix has someone both respect. At Salesforce the referee was one of the two leaders, which isn't really co-leadership. **Was the structure chosen, or patched together?** Co-leadership created to keep someone, to balance factions or to cover an emergency starts with people waiting for it to end. ## Looking back at Taipei By those questions, the "two tops" setup I built in Taipei fails almost every one. The two HR leads hadn't met before they joined. There was no seam between them. I wanted both to be able to build a team on their own, for redundancy, and redundancy means two people doing the same job. And the referee was me, until I stopped being on site. Last time I blamed unclear boundaries. I now think that was the surface. While I was there, no boundary was needed because I was the boundary. When I left, it left with me. If your referee is someone who will leave the room, a boundary on paper won't hold for long. ## Inside a Japan entity The de facto dual leadership I see most often is in the Japan subsidiaries of foreign companies, Chinese ones in particular: an executive sent from headquarters and a locally hired head. On paper one reports to the other. In practice, money and product sit with the expat, and customers and hiring sit with the local head. This is rarely designed. HQ wants someone who can open the Japan market but isn't ready to hand over money and product, so it sends one of its own as well. The line between the two follows trust, not the business. HeadquartersReferee: far away at HQExpat from HQmoney · productno JapaneseLocal headcustomers · hiringno Englishcan't talk directlyThe split follows trust, not the business **Fig.2**A common de facto two-head setup in a Japan entity. Each holds half, and the referee sits at HQ. The most extreme case I've seen: the expat didn't speak Japanese and the local head didn't speak English. The two leaders couldn't talk to each other directly. The local head eventually left, and the Japan business never took off. It's extreme, but it makes the problem impossible to miss. No shared history, a split based on trust, a referee far away at HQ, and two leaders who couldn't even argue. A disagreement you can't argue out doesn't go away. It sits there until one of them leaves. The cost is usually underestimated. The one who leaves is usually the local head, because they have options in Japan. Replacing a Japan entity head through a search firm means a fee rate well above the roughly 30% of annual salary that's common for ordinary roles. From starting the search to the new person's first day takes 6 to 12 months. Meanwhile relationships with customers and sales partners lapse and have to be rebuilt. Nobody invoices you for that part. It's the most expensive part. So can a Japan entity run with two heads? I think it can, if it's treated as a designed structure rather than a way to place people. The expat owns a separable domain, such as product localization or supply chain. The local head owns Japan revenue and the team. The two domains rarely need each other's sign-off. There's a named referee at HQ whom both accept, ideally not the direct boss of either one. And it's agreed in advance who folds the structure, and to whom, if the market goes badly wrong. If those can't be met, I recommend one leader, with the expat clearly in the number-two seat. A lower title is far easier to run than two leaders who don't trust each other. ## What I haven't worked out Last time I said single leadership is steadier while you're starting up, and you split it later as you scale. I now keep only half of that. Netflix and SAP's last pair were both mature-stage co-CEOs, with opposite results. Stage doesn't look like the main variable. Startups have a problem of their own, though, and I haven't solved it. In a small company, the referee both people accept is almost always the owner. And the owner usually wants to be one of the two. When the referee and a player are the same person, I don't know whether these questions still hold. I don't have enough cases. If you've run a Japan entity with two heads, whether it worked or not, I'd like to hear about it. Sources - [Livewire: summary of the 2022 HBR study on co-CEOs](https://www.livewiremarkets.com/wires/few-firms-use-co-ceos-yet-one-study-says-their-share-prices-outperform-by-40) - [Sherwood News: Co-CEOs are back (2025)](https://sherwood.news/business/co-ceos-are-back-corporate-america-and-wall-street-isnt-sure-what-to-make-of-it) - [TechTarget: SAP co-CEO Morgan departs, leaving Klein to fly solo (2020-04)](https://www.techtarget.com/searchsap/news/252481939/SAP-co-CEO-Morgan-to-depart-leaving-Klein-to-fly-solo) - [SAPinsider: SAP announces Jennifer Morgan's departure (2020-04)](https://sapinsider.org/sap-announces-jennifer-morgans-departure-official-q1-numbers/) - [Entrepreneur: Netflix is the rare company with 2 CEOs (2024-07)](https://www.entrepreneur.com/business-news/netflix-has-2-ceos-greg-peters-ted-sarandos-its-working) - [Complex: Reed Hastings steps down as CEO (2023-01)](https://www.complex.com/pop-culture/netflix-co-founder-reed-hasting-steps-down-as-ceo) - [Salesforce: Bret Taylor to step down as Vice Chair and Co-CEO (2022-11-30)](https://salesforce.com/in/news/?p=7579) - [TechCrunch: Co-CEO Jennifer Morgan to depart SAP (2020-04)](https://techcrunch.com/2020/04/21/and-then-there-was-one-co-ceo-jennifer-morgan-to-depart-sap) - [Advisor Perspectives / Bloomberg Opinion: Spotify might prove two CEOs are better than one (2025-10)](https://api.advisorperspectives.com/articles/2025/10/04/spotify-might-prove-two-ceos-better-one) --- Shorter notes that don't make it into a full article go on LinkedIn. 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