Secrets of Growth

Are we living in a post-CEO world?

January 10, 2012: 11:17 AM ET

In a complex business environment, innovative companies must move from a guru model to one based on team leadership.

By Doreen Lorenzo, president, frog

doreen lorenzoFORTUNE -- Are we living in a post-CEO world?

This is a particularly timely question, and not just because I pose it not long after the loss of tech pioneer and visionary Steve Jobs. The death of Apple's (AAPL) core innovator has been met with widespread despair, because many believe he was the singular driving force behind the company. Yet the idea that a CEO is the only person within a business who has the ability to change the world is daunting and unfair. For such a concept to be the model for American innovation is a risky bet.

It's time for our thinking to evolve. Entire industries -- publishing, finance, automotive, and real estate, to name a few -- and even entire nations are changing. As once-mighty economies suffer and emerging players on the world stage both compete and collaborate with them, and as new business models, often centered around software and services, take the place of old ones, the world is becoming more complex. The world's chief executives will be increasingly hard-pressed to go it alone as leaders. Only by building and maintaining a strong, flexible, diverse, and solidly aligned leadership team will they be able to face the challenges ahead.

In a 2010 survey of more than 1,500 global CEOs, IBM (IBM) found that 79% of chief executives anticipate that they will face greater complexity in the future than they do today. This stunning statistic suggests that the opinions, ideas, and experience of a single leader might not be sufficient for successfully navigating an organization in the years ahead. In fact, a 2011 IBM C-suite survey of more than 3,000 chief information officers worldwide concluded that CEOs and CIOs are more aligned than ever before and are using IT innovation to drive business results.

IBM's findings suggest that even if team leadership isn't currently a management goal, group versus solo decision-making is increasingly necessary and falling into place.

It's worth noting that IBM is a perennial practitioner of team leadership. In its 100 years, the company has built a robust executive management team, which has helped it to thrive even after charismatic CEO Lou Gerstner left the business. When Gerstner, who is credited with the company's turnaround, departed in 2002, many people at IBM feared a leadership void similar to that left by Jobs, who stepped down as CEO of Apple shortly before his death, at the company's zenith of market valuation and cultural influence.

But in the post-Gerstner era, IBM continues to be a juggernaut—even rising above Microsoft (MSFT) in market capitalization this year for the first time since 1996. Big Blue is buoyed by its corporate culture and values, which for a long time have been conducive to team leadership. For example, the recent announcement that Virginia Rometty will succeed Sam Palmisano as president and CEO in January did not come as a surprise to the business world. IBM has a history of cultivating strong senior officials to support its chief executives, making not only successions, but also day-to-day operations smooth.

It's not just C-suites that can benefit from team leadership. Consider this example from General Electric (GE): in 2007, 19 senior managers of GE Power Generation, one of the company's oldest businesses, convened at GE's management-development center in Crotonville, N.Y. It was the first time that all of the senior executives of a GE business went through leadership training together. The result? They drafted a vision statement and developed plans for growth, including focusing on regulatory and other staff in emerging markets, which is now a key area in GE's overall strategy. In just four days, the team efficiently devised, agreed upon, and began implementing a unified strategy.

At frog, we have moved from an innovation-guru model to one based on team leadership. By the time our founder, Hartmut Esslinger -- who worked closely with Steve Jobs and Apple in the 1980s -- retired in 2006, he did so as a co-CEO, and not the sole executive voice in the company. He recognized that increasing market complexities and global connectedness required group input ("group-think" has a negative connotation) and decision-making. We now hire engineers and business strategists to round out our teams of industrial designers. Managers participate in weekly calls and monthly leadership meetings, in which we address short- and long-term issues. Company-wide emails are reviewed by several executives to ensure that the message and tone align with our mission.

Of course, not everyone believes in team leadership. Beleaguered BlackBerry maker Research In Motion (RIMM) is reportedly examining the effectiveness of its co-CEO model. Some shareholders have made it very clear, publicly, that they'd like to see the board of directors replace the top two executives with one decision-maker. Analysts don't believe this will happen: "Change in strategy or management is unlikely," Pierre Ferragu of Sanford C. Bernstein recently wrote in a note to investors.

Indeed, some of today's most innovative and successful companies rely on team leadership. Facebook CEO Mark Zuckerberg-- who began as a guru of sorts -- in 2008 hired Sheryl Sandberg as chief operating officer to help govern the rapidly expanding and influential business. Some might say this is an example of "adult supervision" (i.e., an experienced manager being brought in to support a young startup founder, in the way that Google's (GOOG) Larry Page and Sergey Brin hired Eric Schmidt as CEO in the early days). But it is also a team-leadership strategy that has obviously paid off for many companies.

Ultimately, collaboration is the key to sustained success at any innovative company -- no matter how much employees may admire a single figurehead. Ideas are only ideas until a team of people makes them real, profitable, and scalable over the long-term.

Doreen Lorenzo (@doreenl) is the president of global innovation firm frog and an executive vice president and general manager of the Aricent Group, frog's parent company. Doreen drives frog's company strategy and oversees its worldwide operations. During her 14 years with the company, she has been instrumental in re-structuring the company, taking it from a traditional design boutique to becoming one of the world's foremost global innovation firms, securing broad-based arrangements with an array of Fortune 500 clients. She serves as a member of the World Economic Forum's Global Agenda Council on Emerging Technologies, 2011-2012.

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