Oracle names new leaders: are two CEOs better than one?
Larry Ellison doesn’t do much conventionally. Anyone who has followed his 37-year career at Oracle knows that. That’s why it was no surprise when he announced Thursday he was retiring as CEO and named two people to replace him. Safra Catz and Mark Hurd will now share the top leadership job at Oracle. Previously, they had been serving as co-presidents of Oracle (ORCL). Catz was also the CFO.
It’s a rare model, but it’s not new. There are co-CEOs at Chipotle (CMG) and Whole Foods (WFM). Deutsche Bank has co-CEOs as well. Samsung has three chief executives.
Yahoo Finance’s Jeff Macke thinks it’s a terrible idea. “If multiple people are in charge,” he says, “You know who is in charge? No one.” Having two leaders at a company, Macke believes, can create confusion for employees, consumers, investors and the media.
At Oracle, there will reportedly be a clear division of duties. Catz will oversee the areas of finance, manufacturing and legal decisions. Hurd will now manage the sales and global business units.
But when times are tough, there needs to be a clear leader, says Macke. Whole Foods stock is down more than 30 percent this year and concerns continue over fierce competition in the organic food market. Chipotle has seen explosive growth and made “fast-casual” commonplace. But a restaurant in State College, Pennsylvania, closed temporarily this month when several workers walked out on the job. The incident went viral and the company is facing new criticism. Macke says there needs to be one clear person in charge to make strong leadership decisions. “In calm seas, ships sail themselves. In bad seas, you need a captain.”
Blackberry had co-CEOs for many years. Macke points to the battered mobile device company as a cautionary tale. “Blackberry needed to make some very big decisions about catching the smart phone wave,” Macke says, “And it turned out having two CEOs was a lousy structure to do that.”
At Oracle, the success of the co-CEO model remains to be seen. The company itself has lost a lot of its “mojo” in recent years, according to Macke, but so has the greater large software sector. Larry Ellison will likely still have a role in decision-making. He will stay on as executive chairman of the company and chief technology officer.
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