27th Mar 2013

Treble the Trouble?

It has been a busy few weeks at Samsung. The electronics giant has launched the Galaxy S4, is fending off criticism from rival Blackberry about security, and has just appointed two new CEOs. Samsung is now run by three joint CEOs.

In a statement Samsung explained “The new leadership structure will serve to clarify and enhance independent management of the two set divisions, as well as the independent management of the set and component businesses”. Boo-ken Yoon and JK Shin will join Oh-Hyun Kwon as co-CEOs. Shin has been promoted from president of Samsung Mobile, while Yoon has been promoted from president of Samsung Electronics. Under Yoon, in 2006 Samsung’s TV business reached global number 1. Under Shin, in 2011 Samsung’s mobile business reached global number 1 in smartphone sales.

Leadership will be split so that each executive takes charge of one Samsung’s three main divisions. Kwon, who has been in charge of components since last year will continue to do so, Yoon will continue to lead consumer electronics, while Shin will continue to lead mobile communications.

The benefits of a joint CEO structure is debatable. Research In Motion (RIM), the Blackberry maker tried it with one less than Samsung. While it worked for a time, the company suffered criticism, many believing it dysfunctional with the company almost running as two companies. And in January 2012 Mike Lazardis and Jim Balsillie stepped down as co-CEOs under investor pressure. They were replaced by one CEO, Thorsten Heins.

On the other hand, research has shown that shareholders like co-CEOS, with the stock market (initially at least) reacting more favourably to the announcement of co-CEOS, than that of a single woman or man.

Human history tells us that the dominant model is for a single leader – kingdoms, empires, tribes and corporations have been (predominantly) led by one. This ideal is embedded in our minds. Time will tell if this new venture will work out for Samsung. For now, Kwon, Yoon and Shin need to be focusing on their first 100 days as co-CEOS. They should have their First 100 Days Plan in action, and this plan should outline the key desired outcomes, with a clear route to achieving these aims. Most importantly, Kwon, Yoon and Shin need to be effective communicators. Experts tell us that one can never over-communicate – the three would do well to keep this in mind as they make their way through their first 100 days as joint CEOs.

Hilda Goold

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