Posted on: 2/9/2023

Netflix and the Value of Co-Leadership


There’s an old adage in sports that if you have two of something (quarterbacks, goalkeepers, ace starting pitchers), you really have none. The thinking behind this is that if there’s no clear-cut leader at a crucial position on your team, then what might on the surface look like an abundance of good options is actually a deficit hiding in plain sight.

In the corporate world, a version of the same conventional wisdom has often applied to executive hiring. In order to build a successful executive team, especially at the top, there needs to be a clearly defined leader and decision maker.

Netflix’s recently-appointed co-CEOs are bucking that conventional wisdom, though. And they have some very interesting receipts to point to when discussing the strategy.

Recently Netflix co-founder Reed Hastings stepped down from his post as co-CEO with former Chief Creative Officer and presumptive successor Ted Sarandos. But instead of transferring full CEO duties to Sarandos, Netflix instead appointed COO/CPO Greg Peters to maintain the co-CEO structure alongside Sarandos in a move that surprised many observers.

But Netflix sees strength in the shared responsibility at the top. As Sarandos said in a recent interview with Bloomberg, “I see the incredible value of it. Leadership is super hard and can be lonely. Shared leadership can solve some of that problem, particularly as the business gets bigger and the demands become more global.”

In that interview, Hastings and his successors all cite a Harvard Business Review report from Summer 2022 that studied the co-CEO model and showed some very interesting data. According to HBR, co-led companies in their study generated an average annual shareholder return of 9.5%, compared with 6.9% on average for each company’s relevant index. And this was an impressively well-distributed trend: nearly 60% of the co-led companies outperformed.

“We did look at the analysis and the co-CEO model outperforms,” said Peters to Bloomberg. “But you don’t see it that much because it’s unusual to find people who are willing to do the selfless part.”

This is one of eleven factors HBR identifies as key to the success of the co-leadership model. Another is complementary skill sets. As the HBR report notes, such decisions often come down to “two talented leaders who have very different areas of expertise.”

We see this often in hiring processes, where two executives fulfill different aspects of a hiring team’s desired specifications. With appropriate buy-in from each executive, splitting responsibilities between two executives can help each focus on their particular areas of strength without stretching them into areas of relative weakness.


David Mulhern

Senior Consultant