The benefits and pitfalls of
joint leadership at Midas Earthcote
Diederik Johannes Coetzee
Research assignment presented in partial fulfilment
of the requirements for the degree of
Master of Business Administration
at the University of Stellenbosch
Supervisor: Mr Christo Nel
Degree of confidentiality: A
December 2013
ii
Declaration
I, Diederik Johannes Coetzee, declare that the entire body of work contained in this research
assignment is my own, original work; that I am the sole author thereof (save to the extent explicitly
otherwise stated), that reproduction and publication thereof by Stellenbosch University will not
infringe any third party rights and that I have not previously in its entirety or in part submitted it for
obtaining any qualification.
D.J. Coetzee
6 August 2013
16816846
Copyright © 2013 Stellenbosch University
All rights reserved
iii
Abstract
The challenges facing the businesses of today are such that strong leadership is required to ensure
that organisations function effectively and efficiently and that the workforce is engaged and lives the
values and strategic objectives of the organisation. Increasingly, however, the demands of strong
and effective leadership are such that certain organisations require that the company be steered by
more than one leader, in other words through joint leadership.
The question that this research assignment aims to address is what the benefits and pitfalls of joint
leadership within a South African manufacturing context are as perceived by middle and senior
management and the joint leaders themselves. A comprehensive study in the field of joint leadership
reveals the opinions of the authors on this subject on what can be seen as benefits and pitfalls of
joint leadership.
A broad overview of the history of Midas Earthcote is given, providing the backdrop and context to
describe the benefits and pitfalls of joint leadership at the organisation. An analysis of primary data,
collected through questionnaires sent to middle and senior managers as well as separate interviews
with both Mike Vadas and Simon Fraser, is presented.
The final chapter contains the conclusions from the results, namely the benefits and pitfalls of joint
leadership at Midas Earthcote compared to the various sources of literature on the subject. The
researcher is of the opinion that valuable information can be extracted from the outcome of the
assignment, which could assist other companies who wish to embark on a path of joint leadership.
The research results show that there are numerous benefits as well as pitfalls of the joint leadership
model and that each organisation needs to weigh them up against each other to determine whether
this model will suit them and the context in which they operate.
iv
Table of contents
Declaration
ii
Abstract
iii
List of tables
vi
List of acronyms and abbreviations
vii
CHAPTER 1
INTRODUCTION AND PROBLEM STATEMENT
1
1.1.
INTRODUCTION
1
1.2.
DEFINITION OF RESEARCH PROBLEM
2
1.2.1.
Problem statement
3
1.2.2.
Research objectives
3
1.2.3.
Delimitation and scope of the study
3
1.3.
ASSUMPTIONS
3
1.4.
RESEARCH DESIGN AND METHODOLOGY
4
1.5.
DATA AND TREATMENT OF DATA
4
1.6.
PLAN OF THE STUDY
4
1.7.
CONCLUSION
5
CHAPTER 2
LITERATURE REVIEW
6
2.1.
INTRODUCTION
6
2.2.
BENEFITS OF JOINT LEADERSHIP
7
2.3.
PITFALLS OF JOINT LEADERSHIP
10
2.4.
CONCLUSION
13
CHAPTER 3
BACKGROUND ON MIDAS EARTHCOTE AND ITS LEADERSHIP
3.1.
INTRODUCTION
3.2.
OVERVIEW OF THE MOST IMPORTANT EVENTS IN THE HISTORY OF MIDAS
3.3.
14
EARTHCOTE
14
CONCLUSION
16
CHAPTER 4
4.1.
14
DATA ANALYSIS
INTRODUCTION
17
17
v
4.2.
RESEARCH METHODOLOGY
17
4.3.
RESEARCH FINDINGS: QUESTIONNAIRE ANALYSIS
17
4.4.
ANALYSIS OF INTERVIEWS
25
4.5.
COMPARISON BETWEEN QUESTIONNAIRES AND INTERVIEWS
30
4.6.
CONCLUSION
32
CHAPTER 5
SUMMARY,CONCLUSION AND RECOMMENDATIONS
33
5.1.
INTRODUCTION
33
5.2.
SUMMARY OF SEARCH RESULTS
33
5.2.1.
Research problem
33
5.2.2.
Literature study
33
5.2.3.
Midas Earthcote background and leadership
35
5.2.4.
Empirical research
35
5.3.
CONCLUSIONS DRAWN FROM RESEARCH RESULTS
35
5.4.
RECOMMENDATIONS
38
5.5.
FINAL CONCLUSIONS
38
REFERENCES
39
APENDIX A: INTERVIEW WITH MIKE VADAS
42
APPENDIX B: INTERVIEW WITH SIMON FRASER
46
APPENDIX C: JOINT LEADERSHIP QUESTIONAIRE
50
vi
List of tables
Table 4.1: Competencies, duties and skills
18
Table 4.2: Decision making
19
Table 4.3: Strategy and strategic alignment
20
Table 4.4: Communication
21
Table 4.5: Competition
22
Table 4.6: Staff and mentoring
23
Table 4.7: Governance, oversight and ethics
24
Table 4.8: Financial implications
25
vii
List of acronyms and abbreviations
CEO
chief executive officers
co-MDs
co-managing directors
MV
Mike Vadas
R&D
research and development
RIM
Research in Motion
SAP
Systems, Applications and Products
SF
Simon Fraser
1
CHAPTER 1
INTRODUCTION AND PROBLEM STATEMENT
1.1.
INTRODUCTION
With the increased complexity in today’s business world, certain international companies reacted by
appointing joint chief executive officers (CEOs) to lead the organisation, believing that the
requirements of the position demands the appointment of two CEOs. There has been varied results
following this approach and it continues to create a broad spectrum of criticism and praise. Some of
the more noticeable examples of companies who appointed joint CEOs include SAP, Twitter and
RIM (Research in Motion). Conversely, other co-appointments ended in well-known failures,
including Unilever and Kraft. In addition to the successes and failures, there are organisations that
have continued their commitment to the model of joint leadership despite having mixed results, two
of these being Citigroup and Goldman Sachs (Arnone & Stumpf, 2010).
Within the South African context, the joint leadership models have also been implemented with
varied success. Most notable is the success of the joint CEOs of Kulula, with others including small
and medium sized organisations namely the Nimble Group, Inter8 Group and Triton Express.
Organisations are looking towards leadership for the most efficient manner to negotiate the
expectations and demands of stakeholders and the challenges of a constantly evolving environment.
The research assignment will aim to investigate whether the joint leadership of the current comanaging directors (co-MDs) of Midas Earthcote, Michael Vadas and Simon Fraser, has been
beneficial or detrimental to the success of the company, through analysing the various benefits and
pitfalls of their joint leadership as seen by themselves, senior and middle management of the
company. Before the two independent private companies – Midas Paints, founded by Mike Vadas
and Earthcote Traditional Paints, founded by Simon Fraser – merged to form Midas Earthcote in
2006, they were both struggling to regain market share in a fiercely competitive coatings industry.
During that time, the market positioning of the companies was not focused and they thus embarked
upon the difficult task of merging Midas and Earthcote to compete strategically and be on a better
footing compared to the current mayor competition as well as emerging players.
Vadas and Fraser began their repositioning with a strategy called “3x4x5” (3 years x R40 million
operating profit x 50 retail stores) and together with a team of hand-selected people, they facilitated
the merger and strategic repositioning of Midas Earthcote in light of the challenges they faced in
2006.
2
They subsequently faced a number of challenges in repositioning the company for success. These
included:
i)
the transition of the companies from limited contractor focused products to extensive ranges
to accommodate the contractor and retail market,
ii)
The repositioning of the organisation within a rapidly changing South African market wherein
the access to global products is easily accessible,
iii)
the entry into the market of alternatives to coatings solutions, and
iv)
improving return on investment.
This chapter provides an overview of the research problem and objectives, as well as a brief
description of the research methodology that will be used to conduct the study.
Chapter 2 will focus on a comprehensive study in the field of joint leadership, which will reveal the
opinions of the authors on this subject regarding what can be seen as benefits and pitfalls of joint
leadership.
Chapter 3 will give a broad overview of the history of Midas Earthcote, providing the backdrop and
context against which to describe the benefits and pitfalls of joint leadership at the organisation.
Chapter 4 will provide an analysis of primary data collected through questionnaires sent to middle
and senior managers as well as separate interviews with both Mike Vadas and Simon Fraser.
Chapter 5 contains the conclusions from the results, namely the benefits and pitfalls of joint
leadership at Midas Earthcote compared to the various literatures on the subject.
1.2.
DEFINITION OF RESEARCH PROBLEM
The research problem was identified against the backdrop of joint leadership as an alternative to
other current leadership models and specifically what the benefits and pitfalls are when this model
is adopted. The research assignment will therefore investigate the joint leadership of the current coMDs of Midas Earthcote. For the purposes of this study, specific emphasis will be placed on the
views from senior and middle management and the leaders themselves on this subject.
The implementation of the 3x4x5 strategy meant that the various leadership behaviours and styles
intrinsic to Vadas and Fraser had to culminate in such a way as to promote and enhance only the
highest standards of effectiveness and efficiency from followers in order to facilitate the required
transformation and subsequent operational and financial success.
3
1.2.1.
Problem statement
Is the joint leadership model a viable alternative to the current leadership structures, taking into
account the benefits and pitfalls that the joint leadership model possesses?
1.2.2.
Research objectives
The objectives of the research assignment are as follows:
i)
To analyse the benefits and pitfalls of the joint leadership model at Midas Earthcote
furthermore.
ii)
To add to the debate on whether this model can be regarded as a viable alternative to single
leadership structures.
iii)
To study various literature on the subject and gain greater insight into the joint leadership
model.
iv)
To gain insight into the views of senior and middle management at Midas Earthcote as well
as the leaders themselves on this subject.
1.2.3.
Delimitation and scope of the study
This study is aimed at examining the joint leadership model at Midas Earthcote through an analysis
of the benefits and pitfalls of this model. Although other leadership models will be discussed briefly,
the study will focus mainly on the joint model.
Although the effectiveness of leadership should be measured by analysing both the subjective and
objective measures, as described by Gary Yukl (2002:8), this assignment focuses on the benefits
and pitfalls of the joint model and not whether or not this model is effective. Therefore, it will only
contain subjective views and opinions of senior and middle management and the leaders themselves
on this subject. No financial performance information will be analysed, as this will not assist in
addressing the research question.
Subjective measures will include questionnaires detailing opinions on the benefits and pitfalls of this
model as well as interviews with the joint leaders.
1.3.
ASSUMPTIONS
The research with the following assumptions taken into account:
The opinions and views of the various authors in the literature review regarding the benefits and
pitfalls of joint leadership will provide a solid foundation on which the benefits and pitfalls at Midas
Earthcote can be evaluated.
4
Although the sample of people participating in the empirical study is a small group, they do consist
of the entire middle and senior management staff.
Valuable lessons can be extracted from dissecting and analysing the joint leadership model at Midas
Earthcote within a South African medium sized business context and these could be applied at
various management levels and externally to all modern business practices
1.4.
RESEARCH DESIGN AND METHODOLOGY
An empirical approach will be used for the outlay of the research design. The information for this
study will be obtained by qualitative research data collected through questionnaires sent to senior
and middle managers, as well as interviews conducted with both Vadas and Fraser.
The questionnaires will be directed in such a way as to capture the participants’ own opinions and
experiences regarding the benefits and pitfalls of Vadas’s and Fraser’s joint leadership. The
questionnaire design will be based on the joint leadership literature review. An interview with Vadas
and Fraser will also be conducted for greater insight into their experiences as joint leaders.
The interviews with Vadas and Fraser has been minuted and signed to ensure that all the data is
captured and can be used effectively. The interviews conducted with Vadas and Fraser will be
interpreted and reviewed against the literature reviewed. The interviews will be structured in a way
which will give the opportunity for the interviewee to freely express opinions and let the interview
take a predetermined path. The first-hand information obtained through the interviews will further
elaborate on the benefits and pitfalls of joint leadership.
1.5.
DATA AND TREATMENT OF DATA
Questionnaires will be compiled to incorporate the views and expectations of senior and middle
managers with regard to the joint leadership at Midas Earthcote. In addition, questions will also be
constructed to incorporate the current literature on joint leadership. The identities of senior and
middle managers completing the questionnaires will not be revealed. The validity of the findings will
be ensured through using a theoretical framework against which the data will be analysed. Summary
tables of the questionnaires’ data will also be included. In order to ultimately answer the research
question, further analyses of the summaries against the reviewed literature will also be conducted.
1.6.
PLAN OF THE STUDY
A comprehensive study in the field of joint leadership will reveal the opinions of the authors on this
subject, namely what can be seen as benefits and pitfalls of joint leadership.
5
By delving into the history of Midas Earthcote, the overview provides the backdrop and context to
describe the benefits and pitfalls of joint leadership at the organisation. The fourth chapter will
provide an analysis of primary data collected through questionnaires sent to middle and senior
managers, supplier and customers as well as separate interviews with both Mike Vadas and Simon
Fraser.
The final chapter contains the conclusions from the results, namely the benefits and pitfalls of joint
leadership at Midas Earthcote compared to the various literature on the subject. The researcher is
of the opinion that valuable information can be extracted from the outcome of the assignment, which
could assist other companies who wish to embark on a path of joint leadership.
1.7.
CONCLUSION
This chapter has introduced the research problem, explained the research objectives and provided
an overview of the research methodology that is used to answer the research question posed. The
following chapter will focus on the literature pertaining to the benefits and pitfalls of joint leadership
which will be used as a framework against which the benefits and pitfalls of joint leadership at Midas
Earthcote is evaluated.
6
CHAPTER 2
LITERATURE REVIEW
2.1.
INTRODUCTION
Four hundred years before the birth of Christ, Plato wrote that “leadership is a rare trait typically
possessed by only one person in any society, an individual who has a unique lock on wisdom and
truth”. This view of Plato confirmed the only kind of leadership people had seen by that point in
history, which is a one-man rule. Aristotle, who was a pupil of Plato, later tried to demonstrate that
the one-man rule could not be the only viable leadership structure, as “truth is not singular, and
wisdom never the sole province of one person”. His views fell on deaf ears however, and the die had
been cast for the one-person rule to be perceived as the only form of leadership until the late 20th
century (O’Toole, Galbraith & Lawler, 2002: 2).
The publication of Co-Leaders: The Power of Great Partnerships (Heenan & Bennis, 1999) appeared
to be the preamble to a new and modern way of thinking about organisational leadership. The
publication broke with the traditional concept of individual leadership and, instead, saw the
leadership activity as a joint or shared endeavour.
Certain organisations have a history of joint leadership. Most investment banks, and in particular
Goldman Sachs, used joint leadership as a matter of course. This occurred mainly because of the
way that the company’s partner structures were set up, which allowed for more than one person to
lead the organisation. As an example, when the CEO of Goldman Sachs passed away in 1976, two
of the senior partners, John Weinberg and John Whitehead, developed a succession plan naming
themselves as joint CEOs (McLean, 2004).
Richard Olson, the CEO of Champion Paper, has the following view of leadership:
“None of us is as smart as all of us. And, most simply, in large corporations there is just too much
work for one person to do and no one individual is likely to have all the skills needed to do it all.
Since leadership is, by definition, doing things through the efforts of others, it is obvious that there
is little that a business leader – acting alone – can do to affect company performance, other than
try to "look good" to investors” (O’Toole et al., 2002).
History has shown that organisations do run a considerable risk in being dependant on a single
individual leader. If that individual leaves, retires or dies in office, the organisation may be in a
position where it loses the continued capacity to be dominant, succeed and grow. This can be
witnessed in the then declining performance of Coca-Cola after Roberto Goizueta and at General
Motors after Alfred Sloan. Over the last half century the trend has been to expand the capacity for
7
leadership at the top of business organisations. In the early days, if companies were listed on stock
exchanges and open to public trade, they were run by a president and a vice president,The latter’s
primary role was to step in if the president became incapacitated (O’Toole et al., 2002:4).
Notwithstanding the fact that extensive research and analysis has been performed on how senior
management impacts on organisational/financial performance as well as organisational decisions
(Dahya, Garcia, & Van Bommel, 2009; Malmendier &Tate, 2005; Adams, Almeida, & Ferreira, 2005;
Wasserman, 2003; Bertrand & Schoar, 2003), the current literature does not adequately address the
possible effects that other forms of organisational structures in the top leadership position may have
on the performance of the organisation or the benefits and pitfalls that such a structure entails.
Current literary research rarely mentions the sharing of executive management power in terms of
the concept of a joint leadership model.
Co-founders who then became joint CEOs have a better history of success, as the individuals
involved typically chose each other as leadership partners. O’Toole et al. (2002) argue that although
their success as entrepreneurs may lead to an initial good working entrepreneurial relationship, it
does not mean the partnership will lead them to become joint CEOs of a larger, more successful
business. Shivdasani and Yermack (1998) observe that the average length of a co-CEO partnership
is approximately four and a half years, which is comparable to that of solitary CEOs, suggesting that
this arrangement is more stable than previously believed.
This chapter will examine the various benefits and pitfalls of shared leadership against which the
leadership of Vadas and Fraser will be evaluated in Chapter 4. Since this study is conducted on the
shared leadership at a manufacturing company, the author has also considered whether there are
benefits and pitfalls to shared leadership that are peculiar to manufacturing companies.
2.2.
BENEFITS OF JOINT LEADERSHIP
Arena, Ferris and Unlu (2008) state that having more than one individual serving as joint CEO of an
organisation can potentially influence the organisation’s structures for making decisions in ways that
may be completely opposite to that of a single CEO. Firstly, when locations are separated by time
and distance, the organisation is able to have the presence of senior leadership at both these
locations when it has joint CEOs. Secondly, it allows for the simultaneous review of different topics
which are of strategic importance. Thirdly, having joint CEOs more often than not means that the
individuals brings complementary technical and interpersonal skills to the organisation’s senior
executive position, providing varied views, perspectives and competencies that may not be present
in a single individual.
8
Paul Staman, the chief executive of Amana Corporation, explains the benefits of joint leadership as
follows: “It allows more time for leaders to spend in the field; it creates an internal dynamic in which
the leaders constantly challenge each other to higher levels of performance; it encourages a shared
leadership mindset at all levels of the company; it prevents the trauma of transition that occurs in
organisations when a strong CEO suddenly leaves” (Tye, 2002).
Avis CEO, Robert Townsend, punts the advantages of joint leadership and described how two
executives can divide the tasks of the CEO in his 1970 bestseller, Up the organization. Townsend
(1970) explains that the best duos are like yin and yang – they say, "neither of us is very good, but
our weaknesses (and strengths) may be compensating". According to Townsend (1970), the trick is
for joint leaders to "split up the chores, check in advance on strategic matters, and keep each other
informed after the fact on the daily disasters.”
Pearce and Conger (2003) argues that when the competencies and skills required for effective and
successful leadership cannot be derived from one member of the senior management of an
organisation, then co-leadership is justifiable. As a consequence, more often than not, two or more
leaders may be required to fulfil the duties and tasks that are to be performed by the CEO.
As argued by O’Toole et al. (2002) and Pearce and Conger (2003), the complementary skills and
experience of joint CEOs might benefit complex organisations. As an example, international
organisations might appoint one top executive in the position of CEO to manage international
operations, and another top executive in a joint CEO capacity to lead domestically. Secondly,
companies which have widely diversified activities and operations could find advantages in
appointing joint CEOs who have built up their experience and expertise in these diversified
industries. Firm complexity, according to Coles, Daniel and Naveen (2008), is measured by
measuring how large the organisation is both in physical and financial size as well as the quantity of
the business divisions. Therefore, the joint leadership models would more likely benefit an
organisation that is more complex; or put the other way around, an organisation with a joint
leadership structure will probably be positively related to the indicators for complexity.
Organisations where the CEO’s power of decision making is more prevalent and the degree of
influence much higher should also be able to benefit from the joint leadership model. As argued by
Wasserman (2003), CEOs must make the most of each opportunity when the environment,
specifically the external environment, provides the organisation with limited opportunities due to
concentrated industry competition. The organisation performance will be highly impacted by the
influence of CEOs.
As Hodgson, Levinson and Zalenik (1965) acknowledge, the pairing is an effective structure for
decision making in complex environments. If the mix of competencies, backgrounds, styles and
9
contacts of the two executives is appropriate and successfully integrated, the professional duo
provides better decision making capability at the top than a solo executive who relies on individual
capacities or a loosely knit team.
Jensen (1986) observes that agency conflicts are more pronounced when available cash reserves
is greater and interest and capital debt payment amounts are reduced. Therefore, the dual oversight
and monitoring provided by joint CEOs might reduce the cost of agencies and could be beneficial to
organisations with high reserves of cash and low debt levels. Wasserman (2003) further argue that
when excess financial resources are available, CEOs have a much greater impact on organisational
performance. Those organisations with large reserves of cash are able to make them available to
the CEO, while organisations with reduced debt levels are less restricted by debt covenants imposed
by lenders and also able to achieve higher borrowing capabilities. A CEO is able to invest in value
generating projects or projects that decrease the value of the organisation when abundant resources
are available. In both these instances, the CEO’s decisions on how resources are utilised will have
a direct consequence on the performance of the organisation.
As found by various authors co-leadership also provides the opportunity for greater objectivity,
opportunities for co-leaders to see any potential blind spots that a single leader may not notice, and
opportunities for a leader to learn about her- or himself (Bailis & Adler, 1974; Lundin & Aronov, 1952;
McGee & Schuman, 1970; Yalom & Leszcz, 2005). Additionally, co-leaders may depend on each
other’s presence to lessen their anxiety, to provide a means of debriefing post-sessions, and to
provide one another with support, gratification, and validation (Heilfron, 1969).
A preference for co-leadership may stem from the potential benefits it has for both the co-leaders
and staff (Yalom & Leszcz, 2005). Yalom and Leszcz (2005) suggest that benefits to the co-leaders
include the ability of the co-leaders to complement and support one another, create greater
observational range, and multiple points of view. Co-leadership also provides unique opportunities
for novice leaders to learn from working with a more experienced leader, as found by Alpher and
Kobos (1988), Yalom and Leszcz (2005) and others. For example, novice group leaders can co-lead
sessions with more experienced leaders, which may lessen the anxiety of a beginning leader and
allow for valuable feedback from the more experienced leader (Davis & Lohr, 1971).
Yalom and Leszcz (2005) suggest that a major benefit of co-leadership is that it allows for multiple
leadership roles to be played out within the organisation. For example, (consciously or not) one coleader may assume a more nurturing role, whereas the other may assume the role of provocateur.
However, they warn that the co leaders should not take on rigid roles within the organisation. A final
benefit of co-leadership is that it allows for modelling of healthy interactions and problem solving
between two individuals (Bailis & Adler, 1974,601). In this way co-leaders serve as a model for staff
10
members by constructively resolving differences, and group members can learn through “imitation
and identification”.
This type of co-leadership also creates the opportunity for personal growth (for instance in learning
to accommodate another person), provides stability and objectivity, lessens anxiety, spreads
responsibility, and increases accountability (Reynolds & McWhirter, 1984).
Co-leadership also provides practical benefits for the administration of the company. For example,
meetings may continue as scheduled even when one leader is ill or otherwise unable to make a
meeting or meetings (Yalom & Leszcz, 2005).
2.3.
PITFALLS OF JOINT LEADERSHIP
Although praising teams, Hackman (2002) is critical of both the idea of shared leadership and the
notion of co-CEOs. In his words, “not to have a single individual who is responsible for making sure
things stay on track is to invite coordination problems and unnecessary interpersonal conflicts as
those who are supposedly sharing leadership arrange themselves into a hierarchy.
James Schrager, quoted by Ladika (2004: 57), expresses his rejection of CEO role sharing by
reversing a typical expression of popular wisdom: “Two heads are not better than one when it comes
to leadership. The key to success is a single leader. It’s a very powerful pattern that goes back to
the beginning of time. It’s an immutable pattern.” In a piece jointly written by a scholar and a
practitioner (Allen & Berkly, 2003), the authors state that “effective firms lodge ultimate leadership
and accountability in a single place. A split power structure would reduce the authority of the CEO”.
Joint CEOs might result in below par and or non aligned decision-making by the organisation. As
argued by Hackman (2002), joint top executive appointments are hampered when interpersonal
conflicts as well as possible coordination issues are taken into account. Due to the strong egos and
sometimes larger than life personalities of CEOs, joint leadership arrangements may inevitably lead
to negative competition for power as well as enhanced friction between these individuals. The
possible inability of joint leaders to reach a common ground when facing difficult decisions can result
in diminished strategic focus as well as non-coherent and conflicting decisions being made. Due to
this, Alvarez and Svejenova (2005) regard joint CEO models as not being inherently stable and/or
sustainable for good performance over extended periods of time.
The larger limitation of this organisational structure will be the power struggles between co-CEOs,
as argued by Mintzberg (1989) and Hackman (2002). These struggles will result in more ambitious
and powerful CEOs not being willing to relinquish power and accept a joint leadership arrangement.
11
Co-leaders with conflicting goals and ideas can give contradictory directives to people working under
them, leading to confusion within the organisation. The group receiving orders may undermine
authority following the disunity among the leaders, which weakens the company's or the society's
visions and strategies and suppresses positive development.
In his Nicomachean Ethics, Aristotle (in Blau, 1964:195) wrote that “equality is felt to be an essential
element of friendship”. The lack of power distance between the members of a professional duo is
believed to be conducive to its sustainability. It removes one potential source of conflict – power
motivation – and makes it easier for conflicts to be resolved amicably. The power aspirations of one
member of a dyad at the expense of the other prevent it from gelling and usually lead to its
dissolution. This situation could of course be exacerbated by the absence of strong affective ties.
Hermalin and Weisbach (1998) argue that when CEOs possess high levels of power, the monitoring
function of the boards of directors are less effective and there is a constant struggle for power
between the organisation’s board of directors and the top executive. Therefore, when two CEOs
share the leadership of the organisation, the reduction in the board’s effective monitoring ability might
be more pronounced. The board’s ability to provide oversight might be further weakened when
increased authority resides within the leadership of the joint CEOs. In addition to this, it may further
result in the increase of management entrancement levels. As an alternative, joint CEOs may also
perform the role of mutual monitors. In this instance, the monitoring provided by the board of directors
is to a large extent substituted by the joint CEO.
Lack of accountability arises when leaders act to cover their shares of administrative duties rather
than look at the administrative unit's overall results. This weakens the joint accountability that coleadership aspires to achieve and creates gaps through which mismanagement of funds can occur.
Projects that require joint inspection can receive reduced attention, undermining the organisation's
output.
It is stated by Almazan and Suarez (2003) and Aghion and Tirole (1997) that lower CEO effort will
become prevalent as a result of reduced CEO authority. They further argue that the majority of CEOs
will always choose to act alone in a single CEO role, rather than form part of a joint CEO leadership
arrangement. Arena et al. (2008) propose that to the contrary, organisations who appoint joint CEOs
resulting in the sharing of the executive role do not experience a decline in their commitment in the
role of joint CEOs or a shirking of their responsibilities.
Differing levels of commitment among co-leaders can cause friction, as can dissimilar goals. If one
partner is dedicated to improving the future prospects of the company, but the other partner just
wants a paycheck, disagreements are bound to occur. Similarly, if one partner is less competent,
the imbalance in skills and responsibilities can cause resentment, especially if the pay is equal.
12
Elements of distrust, unhealthy competition and over-dependence on one of the co-leaders may lead
to disagreements and the organisation's inefficient administration. The situation can pressure the
entity's members to take sides depending on who they think is a better leader; this could worsen the
competition among co-leaders, leading to splinter groups.
Co-leaders must have compatible leadership styles. Otherwise, employees receive mixed
messages. For example, if you are authoritative, stepping in often to correct your employees’
mistakes, your employees tailor their performances to your hands-on approach. However, if your
partner focuses on developing employee autonomy, the staff adjusts to his or her more nurturing
style and expects more autonomy. The outcome is confusion as employees struggle to understand
their roles in your organisation.
Block (1961) suggests that competition could develop between co-leaders, hindering the work of
each. Roller and Nelson (1991: 308) echo this warning about the effects of competition within the
co-leader relationship, suggesting that it is often considered the “most threatening dilemma” faced
by co-leaders of group interventions.
Individuals in shared leadership roles are usually extremely powerful individuals and have strong
degrees of independent control (Lee & Tiedens, 2001) that may lead to rivalry and attempts to control
each other.
Organisations strive to treat co-leaders equally by offering them equal salaries, bonuses and luxury
allowances, increasing the entity's operating costs. The cost escalates with the entity's number of
co-leaders. Such equal treatment aims at avoiding conflicts between the leaders. For example, a
leader earning more than his counterpart would feel superior and may take up more responsibilities
instead of sharing tasks equally.
Employees working under co-leadership may not know whom to report to due to difference in the
co-leaders' opinions about projects. The situation worsens if co-leaders conflict with each other, as
employees feel caught between the leaders' disagreements. Employees may report to the leader in
support of their views and ways of going about the work, undermining the other co-leader.
Co-leaders can try to hide irritation or resentment, but sooner or later, any tensions or disagreements
become evident to employees. The workplace environment is strained as employees attempt to
collaborate with both co-leaders without stepping on any toes.
Employees view co-leaders as a team, so what the one does, reflects on the other. If the one leader
mishandles a project, or worse, does something unethical, the employees will blame the other as
well, either for enabling or for failing to deal with the problem in time. If the one has no authority to
control the other, such problems may be unavoidable.
13
Pfeffer and Salancik (1978) argue that confusion caused by divided authority is eliminated due to
the fact that unitary leadership structure provides more effective leadership. The CEO would be able
to respond to market conditions more quickly, without waiting for ratification from another person,
since he or she is the only person in control. This becomes apparent in certain situations where
strategic and budget decisions have to be made within minutes. The potential for rivalry between
joint leaders can also be eliminated by only having one head (Arrow, 1986).
As stated by Arnone and Stumpf (2010), demands for the attention of joint leaders push the talent
development of their direct reports to a lower level of urgency. Their research conducted amongst
19 co-heads highlighted this: “the burden on subordinates in high octane business is extraordinarily
difficult. Subordinates play off each other and try to pick their favorite, because they are often not
sure who carries more weight during the performance reviews”.
2.4.
CONCLUSION
As seen from this literature review, there are many advantages to shared leadership, such as leaders
having complimentary skills, ease of decision making and various other benefits.
On the other hand, the potential pitfalls of shared leadership are also numerous, especially where
the leadership styles differ significantly, where strong personalities view for the upper hand, or where
the company’s structures, policies, budget or culture does not accommodate a joint leadership well.
The next chapter will provide a historical overview of the company Midas Earthcote.
14
CHAPTER 3
BACKGROUND ON MIDAS EARTHCOTE AND ITS LEADERSHIP
3.1.
INTRODUCTION
This chapter provides an overview of Midas Earthcote’s history, focusing on the lineage of both
Earthcote and Midas Paints and their eventual merger. This chapter is not an in-depth discussion of
all the events that has shaped the company, but rather aims to provide the backdrop and context
against which to discuss the eventual joint leadership. The historical overview will focus on the
following aspects and turning points:
•
History of Midas Paints
•
History of Earthcote Traditional Paints
•
Merger to form Midas Earthcote
•
Takeover by Freeworld Coatings (Now Kansai Plascon).
The main focus of this research assignment is on the use of the joint leadership model post the
merger of the companies. The next section provides a cursory glance at the points mentioned above.
3.2.
OVERVIEW OF THE MOST IMPORTANT EVENTS IN THE HISTORY OF MIDAS
EARTHCOTE
My grandfather came to South Africa to fight in the Boer War, but ended up starting a paint company
instead. His service ethic stuck like bitumin to bare feet. When customers in the Boland jokingly
refused to buy from an “Engelsman”, he went back to them after 6 weeks, speaking Afrikaans (Mike
Vadas).
Eric Vadas arrived in South Africa in 1902 to fight as a volunteer in the Boer War. However, the war
ended almost on his arrival. He then settled in the Wellington area and started to produce his own
water based paints, using very rudimentary equipment, under the name “Vadek Paints”. As a
foreigner who could not speak Afrikaans, he found it very tough to get his business of the ground.
However, by the time he learnt to speak Afrikaans and by the time people started to realise that no
other paint manufacture could offer his service his business started to flourish.
His son John Vadas took over the business by the time Eric Vadas reached old age. He also grew
the business further into the Boland area as well as establishing a base in Cape Town. By 1982,
Mike Vadas was already working with his father in the company, expanding it even further. When
15
Mike Vadas took over in 1989, he saw a gap in the contracting market for Vadek and at the same
time changed the name to Midas Paints.
Due to the competition in the paint industry from larger competitors such as Plascon and Dulux, Mike
Vadas decided to sell only to contractors and not to sell to the retail market anymore. Midas became
a manufacturer and supplier of broad wall paints purely to the small and medium sized contractor
base across South Africa. This was done from a manufacturing and distribution centre based in Cape
Town and the company themselves had no other channels for marketing.
Earthcote Traditional paints were started in 1992 by Simon Fraser. He decided from the outset that
his paints will target the 9 and 10 LSM groups and will provide alternative paint solutions that other
competitors could not offer at the time due to its very specialised nature. He had one retail outlet in
Greenpoint, Cape Town and traded very successfully from the one store, shipping product to as far
afield as Mauritius and Europe. He contracted a third party to manufacture his paint and it was only
when he was seeking a new manufacturer that he came in contact with Midas Paints.
Mike Vadas and Simon Fraser realised that a merger would ensure that the companies would have
access to shared technologies, best practices and leading standards in production and research and
development (R&D). Most importantly, the combination of diversified product ranges created the
opportunity to create a new channel to market concepts never seen before in the South African
coatings industry. The new concept would entail giving the public the opportunity to purchase a
franchise store, which would stock both contractor and retail products, and operate as a retail store.
Aware of its niche in the specialist and textured coatings markets, Midas Paints merged with
Earthcote Paints in 2006, adding new product development processes and niche market textured
products to its offering. Vadas and Fraser decided to operate as co-MDs because the products that
their separate companies offered, fell outside of the realm of the other’s understanding. Fraser was
charged with R&D and marketing, while Vadas was charged with the day-to-day operations of the
company.
In the same year, Midas Earthcote decided to open a new retail outlet model and sell its paint through
franchise stores. In a matter of two years and with Vadas and Fraser travelling the country nonstop,
they managed to sign up 54 franchise stores.
By 2008, the newly listed company Freeworld Coatings Ltd saw the potential of the Midas Earthcote
franchising concept and began negotiations to incorporate the company into their stable. At the time,
the company had Plascon as its flagship brand but had no direct access to the final consumer as all
its customers were major retail companies such as Makro, Game and Jack’s Paint & Hardware.
Midas Earthcote only sold through its franchises, which made it completely independent from the
16
major outlets. This buy-out would offer Freeworld a direct channel to customers where marketing
and the selling prices are controlled by the company themselves and not dictated by the client.
By the end of 2008, Midas Earthcote was incorporated into Freeworld Coatings, and as the
leadership structure at the company was so effective, it remained as it was, with both Vadas and
Fraser as joint leaders. With the financial backing of Freeworld Coatings, Midas Earthcote was
tasked with the responsibility of having 100 franchise stores by 2014 and expanding its European
offering. With the takeover of Freeworld Coatings in 2011 by Kansai Paints (Japan), the directive
remained the same; however, the company now also needed to look to other world regions, where
the new parent was operating, for opportunities.
3.3.
CONCLUSION
This chapter provided a broad overview of Midas Earthcote’s history, telling the story of how Midas
Paints and Earthcote Traditional Paints were established, their eventual merger and the final buyout from Freeworld Coatings. As it stands, towards the end of 2013, the company has 76 franchises
and also has partnership agreements with outlets in Mauritius, Zambia, the Netherlands, Botswana
and Namibia.
17
CHAPTER 4
DATA ANALYSIS
4.1.
INTRODUCTION
In this chapter, we will consider the research methodology of the assignment, the research strategy
and the research approach that was followed to conduct the research. The focus of his chapter is,
however, the analyses of the primary data, which were collected through questionnaires sent to
senior and middle management. Interviews with Vadas and Fraser were also conducted.
The data of the questionnaires will be analysed and compared to the available literature on which
the specific questions were based. The benefits and pitfalls of the joint leadership as perceived by
the staff selected will then be evaluated against the theory in the literature.
The interviews with Vadas and Fraser will also be reflected on and compared to the views of their
colleagues and the literature.
4.2.
RESEARCH METHODOLOGY
An empirical approach was followed in this study and primary data was collected through
questionnaires sent to senior and middle management as well as structured interviews with Vadas
and Fraser.
The questionnaires sent to the managers were designed according to the literature theory on benefits
and pitfalls of joint leadership. The questionnaire was divided into eight sections based on themes
extracted from the literature review.
The questionnaire was sent via email to three current executive directors, five members of senior
management and ten mid-level managers across various operational departments. All
questionnaires were completed and sent back within one month. In that time, structured interviews
were held with Vadas and Fraser, examining their own views on the benefits and pitfalls of their joint
leadership.
In the next section, the research findings of all 18 questionnaires are summarised and discussed.
4.3.
RESEARCH FINDINGS: QUESTIONNAIRE ANALYSIS
The questionnaire was divided in eight different sections comprising of the main themes of the
benefits and pitfalls of joint leadership as highlighted by the literature review. These eight themes
are: i) competencies, duties and skills, ii) decision making, iii) strategy and strategic alignment, iv)
18
communication, v) competition, vi) staff and mentoring, vii) governance, oversight and ethics and
viii) financial implications. The different themes as well as the rating scale were explained to the
participants.
Section 1 was based on the theme of competencies, duties and skills. The table below summarises
the participants’ responses.
4
5
Disagree
Strongly
agree
3
Agree
2
Neutral
1
Strongly
disagree
Table 4.1: Competencies, duties and skills
1
5
12
3
8
5
The skills and competencies of the one leader are enhanced by the
competencies and skills of the other.
2
11
5
All skills and competencies required for the position are
encompassed in the skills and competencies of the two leaders.
1
6
11
4
8
2
Responsibilities and accountabilities are clearly defined (i.e. chores
are split up).
Activities and operations are assigned to the appropriate leader with
the appropriate skill set and experience.
The necessary competencies and skills required for this role could
not have been attained from only one individual.
2
4
Results: Seventeen of the 18 (94%) respondents agreed that the roles and responsibilities are
clearly defined. Thirteen (72%) stated that the operations and activities are assigned to the
appropriate leader. Sixteen (89%) also agreed that skills and competencies of the one leader is
enhanced by that of the other. Seventeen (94%) colleagues indicated that all the skills and
competencies necessary for this position is encompassed by the two leaders and ten (56%) agreed
that the skills and competencies required for this position could not have come from only one
individual.
Findings: It may be derived from the statistics that the roles and responsibilities of the joint leaders
are clearly defined and understood by the management of the organisation and that the various
activities in the role is assigned to the appropriate leader. It is further surmised that the skills and
competencies of the one leader enhances that of the other and that the skills and competencies
required for this role is encompassed in the skills and competencies of both leaders. At 56%, it can
be deduced that not all respondents felt convinced that only one individual could not have filled the
role instead of joint leaders. If statistics higher than 50% are considered, it is clear that the
respondents are of the opinion that the enhancement of competencies and skills are a benefit of joint
leadership.
19
Section 2 was based on the theme of decision making. The table below summarises the participants’
responses.
Table 4.2: Decision making
4
5
3
8
5
It is easy obtaining access to both decision makers when both
have to approve decisions.
2
7
9
A practical benefit is that meetings may continue as
scheduled even when one leader is ill or otherwise unable to
make a session.
1
3
11
3
A practical benefit is that decisions may still be made even
when one leader is ill or otherwise unable to make a decision.
2
8
8
When one leader does not agree with you, you accept his
decision and you do not revert to the other leader seeking an
alternative response.
1
5
12
4
14
Having two leaders approve a decision reinforces the fact that
the correct decision was made.
Strongly
agree
Decision making is done in an expedient and efficient
manner.
Strongly
disagree
Agree
3
Neutral
2
Disagree
1
2
Results: Seven of the 18 (39%) respondents agreed that decision making is done in an expedient
and efficient manner. Nine (50%) stated that it is easy obtaining access to both decision makers
when both have to approve decisions. Fourteen (78%) agreed that a practical benefit is that meetings
may continue as scheduled even when one leader is ill or otherwise unable to make a session and
sixteen (89%) agreed that another benefit is that decisions can continue to be made when one leader
is ill or otherwise unable to make a decision. Seventeen (94%) colleagues indicated that they would
not approach the other leader for an alternative response if they do not receive the desired response
from the one. All eighteen (100%) respondents agreed that having two leaders approve a decision
reinforces the fact that the correct decision was made.
Findings: Considering the low percentages of the responses to the first two questions, it can be
deduced that decisions are not made in an expedient manner and that gaining access to both the
leaders for input or to make decisions is not easy. However, practically it is beneficial to have two
leaders as scheduled meetings etcetera can continue and decisions can still be made in the absence
of one or the other leader. Lastly, it is also clear from the 94% positive response that colleagues
respect the decisions made by the leaders and will not question the decision by referring it to the
other. Judging by the 100% response, it can also be confirmed that having two leaders approve a
decision reinforces the fact that the correct decision was made.
20
Section 3 was based on the theme of strategy and strategic alignment. The table below summarises
the participants’ responses.
4
5
Disagree
Both leaders display the same strategic intent.
Strongly
agree
3
Agree
2
Neutral
1
Strongly
disagree
Table 4.3: Strategy and strategic alignment
2
8
8
The strategic direction is made clear and in one voice.
1
3
6
8
Both leaders live and portray the company vision and mission.
3
4
9
2
3
8
7
1
11
4
Both leaders display and commit to the same values that they
developed for the company and its employees.
More and better strategic opportunities and options are
brought to the fore.
2
Results: Sixteen (89%) of the respondents indicated that both leaders display the same strategic
intent, with fourteen (78%) also indicating that the strategic direction is made clear and in one voice.
Eleven (61%) stated that both leaders live and portray the vision and mission of the company. Fifteen
(83%) indicated that they feel more and better strategic opportunities and options are brought to the
fore and fifteen (83%) stated that both leaders display and commit to the same values that they
developed for the company and its employees.
Findings: It can be surmised from the results that both leaders display the same strategic intent and
that the strategic direction is made clear and in one voice; therefore, in general, management feel
they receive a single strategic message from the joint leaders. It can also be deduced that the
mission and vision as well as the values of the company are well portrayed by the joint leaders.
Lastly, the managers are also of the opinion that by having joint leaders, there is an increase in the
strategic options and opportunities being discussed and evaluated.
Section 4 was based on the theme of communication. The table below summarises the participants’
responses.
21
Disagree
Information is shared and discussed and both leaders
are aware of what the other is doing.
Joint leadership allows for modelling of healthy
interactions and problem solving between two
individuals.
1
Joint leaders serve as a model to staff members by
constructively resolving differences.
Scheduling of both leaders for appoint-ments that they
must both be present for is easy.
3
5
3
14
1
3
9
5
1
15
2
6
9
It is clear which leader is responsible for which sections
of the communication within the organisation
Communication from the joint leaders are clear and
they send the same message, i.e. there are no mixed
signals.
4
Strongly
agree
3
Agree
2
Neutral
1
Strongly
disagree
Table 4.4: Communication
2
13
5
7
9
Results: Fifteen of the 18 (83%) respondents agreed that information is shared and discussed and
both leaders are aware of what the other is doing. Fourteen (78%) believe that joint leadership allows
for modelling of healthy interactions and problem solving between two individuals and seventeen
(94%) stated that joint leaders serve as a model to staff members by constructively resolving
differences. Nine (50%) indicated that scheduling of both leaders for appointments they must both
be present for is easy. All eighteen (100%) stated that it is clear which leader is responsible for which
sections of the communication within the organisation and sixteen (89%) indicated that
communication from the joint leaders are clear and they send the same message.
Findings: It can be surmised that both the leaders share information amongst each other and are
aware of what the other is doing. Considering the high percentages of the responses to question two
and three, it can be deduced that joint leadership serves as a model of healthy interaction, problem
solving and resolving differences. It does appear that scheduling the same appointments for both
leaders may be difficult at times. From the statistics, one can derive that it is clear which leader is
responsible for which sections of communication within the organisation and that the same message
is communicated in a clear manner from both leaders.
Section 5 was based on the theme of competition. The table below summarises the participants’
responses.
22
4
5
Strongly
agree
Agree
3
Neutral
2
Disagree
1
Strongly
disagree
Table 4.5: Competition
Interpersonal conflicts between the leaders are
resolved privately and behind closed doors.
2
6
10
Interpersonal conflicts between the two leaders do
not hampers daily operations.
3
5
8
2
There are no visible levels of distrust that can be
seen between the leaders.
1
4
10
3
The leaders do not show unhealthy levels of
competition between them.
2
7
9
It seldom appears that one leader is trying to control
the other.
4
8
6
A power struggle is not evident between the two
leaders.
2
8
8
The joint leaders do not question each other’s
motivations and intensions in front of staff.
1
12
5
Each individual leader does not appear to reduce his
effort/commitment due to having a joint role.
7
9
2
Results: Ten of the 18 (56%) respondents indicated that if the joint leaders have conflicts, it is
discussed behind closed doors and ten (56%) also indicate these conflicts do not hamper the daily
operations of the organisation. Thirteen (72%) stated that there are no visible levels of distrust
between the leaders. Only nine (50%) of the respondents agreed that there are no unhealthy levels
of competition between the leaders and six (33%) indicated that it seldom appears that one leader
is trying to control the other. Eight (44%) stated that a power struggle is not evident between the two
leaders while seventeen (94%) responded that the joint leaders do not question each other’s
motivations and intensions in front of staff. Eleven (61%) indicated that neither leader appears to
reduce his effort or commitment due to having a joint role.
Findings: It can be surmised that although conflicts do occur, they are generally dealt with behind
closed doors and generally do not impact on the daily operations of the organisation. It can also be
derived that there are no visible levels of distrust between the leaders. Considering the low
percentages of the responses to the next three questions, it can be deduced that there appears to
be unhealthy levels of competition between the leaders; it is perceived that they are trying to control
each other and a power struggle is evident between them. They do question each other’s motives in
front of staff and the effort levels of each leader however are not reduced by the fact that they have
a joint role.
23
Section 6 was based on the theme of Staff and mentoring. The table below summarises the
participants’ responses.
4
5
Disagree
2
A shared leadership mindset is encouraged across
all levels in the organisation.
Strongly
agree
3
Agree
2
Neutral
1
Strongly
disagree
Table 4.6: Staff and mentoring
3
9
4
12
6
Management benefits from the mentoring of not one
but two leaders.
You perceive the joint leadership model as being an
overall stable structure compared to a single leader
conventional structure.
4
6
8
The leadership styles (i.e. authoritative, hands on,
employee autonomy etc.) of the leaders are very
similar and therefore managers understand the role
of each leader within the organisation.
1
5
12
4
14
The leadership styles (i.e. authoritative, hands on,
employee autonomy etc.) of the leaders are very
similar and therefore managers understand their
own role within the organisation.
Results: Thirteen of the 18 (72%) respondents indicated that a shared leadership mindset is
encouraged across all levels in the organisation and eighteen (100%) agreed that management
benefits from the mentoring of not one but two leaders. Eight (44%) indicated that they perceive the
joint leadership model as being an overall stable structure. Twelve (67%) respondents stated that
the leadership styles of the leaders are very similar and therefore managers understand the role of
each leader within the organisation while fourteen (78%) stated that they understand their own role
within the organisation.
Findings: From the statistics, it can be derived that shared leadership is encouraged throughout the
organisation and managers benefit more from having two leaders mentor them than would have
been the case with only one. It can be further surmised that the joint leadership model is not
perceived as being a stable model compared to the more traditional single leader structure. From
the percentage of responses to the final two questions, it can be deduced that the leadership styles
of both leaders are very similar, therefore making it clear to the respondents what their own roles
within the organisation are as well as the roles of the leaders.
Section 7 was based on the theme of governance and oversight. The table below summarises the
participants’ responses.
24
Disagree
4
5
Strongly
agree
3
Agree
2
Neutral
1
Strongly
disagree
Table 4.7: Governance, oversight and ethics
The oversight over the governance and ethics of the
organisation is increased.
2
13
3
Each leader is aware of his role within the
governance responsibility framework.
1
8
9
Each leader does not shy away from his
responsibility for governance in the organisation.
4
9
5
3
12
1
17
1
There are no conflicts between the leaders as to the
importance of governance and ethics.
2
Each leader is up to date as to the legal governance
requirements imposed on them and understand the
consequence of non-compliance.
Results: Sixteen of the 18 (89%) respondents indicated that oversight over the governance and
ethics of the organisation is increased and seventeen (94%) stated that each leader is aware of his
role within the governance responsibility framework. Fourteen (78%) indicated that each leader does
not shy away from his responsibility for governance in the organisation while thirteen state that there
are no conflicts between the leaders as to the importance of governance and ethics. All eighteen
(100%) respondents agree that each leader is up to date as to the legal governance requirements
imposed on them and understand the consequence of non-compliance.
Findings: From the statistics, it can be derived that oversight over the governance and ethics of the
organisation is increased through joint leadership and each leader is aware of his role within the
governance responsibility framework of managers. It can be further surmised that neither leader
shies away from his responsibility for governance in the organisation and that there are no conflicts
between the leaders as to the importance of governance and ethics. It can also be deduced from the
results that each leader is up to date as to the legal governance requirements imposed on them and
understand the consequence of non-compliance.
Section 8 was based on the theme of financial implications. The table below summarises the
participants’ responses.
25
5
Strongly
agree
4
Agree
3
Neutral
2
Disagree
1
Strongly
disagree
Table 4.8: Financial implications
The benefit derived from having two leaders justifies
the additional remuneration expense.
2
5
8
3
The joint leaders each
remuneration and benefits.
3
5
6
4
deserve
the
same
The leaders are often in conflict over their individual
remuneration.
2
8
5
3
The additional expense of having two leaders could
be better utilised.
1
10
4
3
2
5
11
It would be more expensive to hire consultants to fill
any skills or competency gap the absence of one
leader would bring
Results: Eleven of the 18 (61%) respondents indicated that the benefit derived from having two
leaders justifies the additional remuneration expense and ten (56%) stated that the joint leaders each
deserve the same remuneration and benefits. Three (17%) indicated that the leaders are often in
conflict over their individual remuneration. Three (17%) respondents stated that the additional
expense for having two leaders could be better utilised while eleven (78%) stated that it would be
more expensive to hire consultants to fill any skills or competency gap the absence of one leader
would bring.
Findings: From the statistics, it can be derived that the benefit derived from having two leaders
justifies the additional remuneration expense and the joint leaders each deserve the same
remuneration and benefits, according to their colleagues. It can be further surmised that the leaders
are not in conflict over their individual remuneration. From the percentage responses to the final two
questions it can be deduced that the additional expense of having two leaders could not be better
utilised and it would be more expensive to hire consultants to fill any skills or competency gap the
absence of one leader would bring.
4.4.
ANALYSIS OF INTERVIEWS
The interview with Mike Vadas (hence referred to as MV) and Simon Fraser (SF) was conducted on
3 December 2012 and 4 December 2012 respectively. During the interview, questions were asked
to test the two leaders’ perceptions and views regarding the eight themes of joint leadership brought
up by the literature review. The interviews were structured to allow the respondents to discuss the
topic freely; however, they were guided to respond to the questions asked in the questionnaires.
26
Question 1 and 2 was aimed at getting a general view of why the two leaders chose the structure
of joint leadership and their opinions on the benefits and pitfalls of this structure.
MV indicated that due to his lack of experience and understanding of marketing and product
development, it made sense to have two leaders. He also had no experience with the Earthcote
range of products and therefore it was crucial to have SF continue with that side of the business. He
further commented that sharing of skills, knowledge and the workload was probably the biggest
benefit. The enhancement of the strategic process and decision making as well as the mentoring
benefit for staff are also benefits. However, the drawback of such a structure is the additional
expense to the organisation and possible competition between the leaders.
SF replied that coming from two different sections of the industry and having no or limited
understanding of the products the other company made, it made sense to have a joint leadership
structure. MV had certain operational aspects that he liked working on and SF had marketing and
R&D that he was very much interested in continuing with. The structure was initially a temporary
one, but after realising that it worked and seeing the benefits, they continued with this structure. He
further commented that sharing of skills was a great benefit as well as the benefit of staff always
having one of them available. The strategic process also benefits greatly from this structure. The
potential downside is the cost associated with the additional person in the position.
Question 3 was aimed at getting their views on the impact of competencies, duties and skills in a
joint leadership structure.
In response, MV indicated that he strongly believes that the areas of competence and skills he was
lacking in, was complemented by those of SF. MV said that he came from a pure manufacturing and
selling environment and was a salesman. SF brought the ideas for new products and marketing
concepts that he did not have. MV further stated that the one area both of them were lacking in was
on the financial side, because none of them had a financial background or experience. They relied
on others that they appointed to take care of the numbers.
SF replied that he had no interest in how to run a business, but was an entrepreneur and innovator
at heart and therefore he agreed that having MV as a joint leader meant that he could focus on the
competencies and skills that he had and knew that MV would take care of his own responsibilities.
SF also indicated that he was not comfortable with numbers and relied on MV when it came to
analysing the figures presented to them. SF further said that you would never find the competencies
and skills of two such diverse people in one other individual.
Question 4 was aimed at getting their views on the impact of a joint leadership structure on decision
making.
27
In response, MV indicated that it is a problem having joint leaders in this respect, because due to
their very busy individual schedules, it is on occasion difficult to reach consensus on decisions they
both have to make if the one is traveling and the other is in meetings. It also requires that both
leaders have the same information before them and understand what they are looking at, which is
sometimes difficult as well, especially when they discuss financial information. MV further stated that
the managers in the organisation do respect the decisions made by the individual leader and he has
never found that his decisions have been referred to SF. If there were disagreements about individual
decisions, he would discuss it with SF for his opinion.
SF replied that each leader has areas of the business in which sole decisions can be taken, but there
are certain areas and decisions that require both of their input and approval. Technology does help
in the sense that meetings can be held through Skype when one is not available, although most
decisions contain information which needs to be explained before a decision can be made, and if
both leaders are not in the same room, this is difficult. SF also indicated that it is a major benefit
having another person as a sounding board before making a decision.
Question 5 and 6 was aimed at getting their views on the impact of a joint leadership structure on
strategy and strategic alignment.
MV responded that having SF as his co-leader definitely benefits the strategic process, as it is difficult
for a sole leader to steer the strategic direction of the organisation and with such diverse views on
the strategic future of the organisation, they have the opportunity for a myriad different options and
solutions to be brought to the table. The company has a very strong vision and mission that draws
from the values that both SF and MV have been instilling in the organisation even before the merger
between the two companies. That is another reason why the two companies merged – because the
two leaders had such similar values and strategic outlooks for the industry and their respective
companies.
SF responded that it would always be a concern that with joint leaders, the strategic vision would not
be shared and that each leader would have his own opinion and views on this matter, hampering the
progress and success of the organisation. Therefore it was crucial that SF and MV agreed that they
had a similar strategic vision when merger negotiations started. This agreement and alignment was
then carried into the new organisation. SF further stated that it is crucial for the managers and
employees to know that the strategy is shared by the joint leaders so that everyone is clear about
where the organisation is headed.
Question 7 was aimed at getting their views on the impact of a joint leadership structure on the
communication between the joint leaders as well as within the organisation.
28
In response, MV stated that there is a constant flow of communication between him and SF and they
share calendars, therefore always knowing what the other is doing. It is always important to keep
the lines of communication open and highlight issues that require attention. For the staff it is also
important that they see that MV and SF know what is going on. Having strong communication also
aids in problem solving.
SF stated that it is very important that communication throughout the company is done in a
responsible manner and that is why MV and SF are responsible for the communication for their
respective areas of the business. However, companywide communication by one must be reviewed
by the other leader. Again, it is an important sounding board, having someone to bounce ideas off
before communicating them to the company. SF also indicated that he can see improved
communication skills and interactions amongst the managers of the organisation due to the manner
in which MV and SF communicate and carry themselves.
Question 8 was aimed at getting their views on the impact of competition between the joint leaders
on a joint leadership structure.
MV responded that it was very important for both him and SF not to have conflicts in “public” and
that they must always show their support for each other. He further mentioned that staff quickly
become aware of friction and are then also inclined to start choosing sides, which breeds further
division amongst the leaders themselves and staff. Although both SF and MV are competitive by
nature, as you need to be when you run your own company, unhealthy competition between joint
leaders will only have poor outcomes for everyone. It has occurred in the past that the one leader
probably steps over the line when it comes to the other’s areas of responsibility, but this must be
seen as acting in the interest of the company.
SF stated that to a third party, the sometimes hard interactions between MV and himself might be
seen as unhealthy competition, however, it is imperative that the leaders do question something if
they feel unsettled by it. The position of leader is a tough one which requires tough questions to be
asked and tough decisions to be made. This is sometimes perceived as conflict or a power struggle.
The inner workings of a joint leadership structure are difficult to grasp for people on the outside.
Question 9 was aimed at getting their views on the impact of a joint leadership structure on overall
staff interaction, moral and mentoring.
MV stated that he believes there is a benefit as the influence; views and experience of both leaders
are shared with staff and managers. If staff members have concerns and/or questions, one or the
other leader will be capable of addressing the issue. MV and SF have very similar styles whereby
they let their managers run their departments rather autonomously. MV stated that he is the one with
29
the softer people skills while SF can address the tough issues, and in the organisation, people know
which leader plays which role. MV felt that the joint leadership model can be stable, but it is
imperative to find the right partner.
SF responded by stating that although he and MV have very different personalities, they do share
the same style of leadership. Both of them do not want to micro manage and therefore employ people
that do not need hand holding. All persons in the organisation must see themselves as leaders. He
further stated that managers also have access to both leaders if they need guidance or advice. SF
believes that more and more companies will start to use the model of joint leadership if the leadership
and boards are able to find like-minded individuals.
Question 10 was aimed at getting their views on the impact of a joint leadership structure on
governance, oversight and ethics within the organisation.
In response to this theme, MV stated that although he is fully aware of the importance of governance
and oversight, this was the least enjoyable part of his position. As a small company entrepreneur,
this was furthest from his mind, but with the new demands on the leadership of a company, SF and
MV must be up to speed on all governance requirements. He has always tried to establish a very
strong ethical base in the organisation. He further indicated that although they do try and share the
governance and oversight workload, there are certain things that both of them are responsible for
and cannot delegate.
SF responded that as a marketing person with an artistic flair, the entire concept of corporate
governance and oversight only became a reality for him when he realised that as the joint leader of
the company, he was responsible and accountable for what happens in the organisation. He stated
that both he and MV understand and appreciate why it is important and that through having to do
this, he is much better acquainted with the various laws and regulations affecting the company. He
further commented that having an ethically strong workforce does make his work easier.
Question 11 was aimed at getting their views on the financial implications of a joint leadership
structure on the organisation.
MV stated that it is crucial that when it comes to benefits and remuneration, the leaders are treated
as equals. The roles and duties have been divided in such a manner that one leader can not expect
or demand more than the other. Although the concept of having two leaders in the position will
obviously have greater financial implications, it must be understood that the expertise and
experience of two entrepreneurs with varied backgrounds are brought into one position. Other heads
of organisations appoint others below them to advise them, or even appoint outside consultants,
which carries a much higher cost.
30
In his response, SF indicated that the cost of having both he and MV as joint leaders is justified by
the results of the company and the strategic vision they have for the organisation. Both he and MV
bring a balance to the role which would be difficult to find in one individual. By agreeing upfront to
the responsibilities and accountabilities of each leader, friction of remuneration has never been a
concern.
4.5.
COMPARISON BETWEEN QUESTIONNAIRES AND INTERVIEWS
Competencies, duties and skills
Vadas and Fraser indicated that roles and responsibilities are clearly defined and that the skills and
competencies of the one leader enhance that of the other. Furthermore, the skills and competencies
required for this role is encompassed in the skills and competencies of both leaders. The findings
from management confirms the statements above and therefore it can be surmised that these are
benefits of a joint leadership model; however, it is still unclear whether one person would not have
been able to perform this role alone.
Decision making
Vadas and Fraser agreed that decisions are not necessarily made in an expedient manner and that
gaining access to both the leaders for input or decisions is not easy. However, practically it is
beneficial to have two leaders as scheduled meetings etcetera can continue and decisions can still
be made in the absence of one or the other leader. They also stated that having another person as
a sounding board for decision-making was very beneficial and they believed managers trusted the
decision they made enough not to question it with the other leader. Comparing this to the feedback
from the managers, it can be said that all the above, except for decisions not being made quickly,
are benefits related to the decision making process.
Strategy and strategic alignment
Vadas and Fraser indicated that both leaders display the same strategic intent and that the strategic
direction is made clear and in one voice, therefore in general, management feel they receive a single
strategic message from the joint leaders. Both of them also portray the mission and vision as well as
the values of the company very well. Lastly, they also agree that having joint leaders increases the
strategic options and opportunities being discussed and evaluated. Management responses to the
questionnaire confirm these statements.
Communication
Vadas and Fraser stated that the leaders share information amongst each other and are aware of
what the other is doing and that the joint leadership structure serves as a model for healthy
31
interaction, problem solving and resolving differences. It does appear that scheduling the same
appointments for both leaders may be difficult at times. It is also clear from their replies which leader
is responsible for which sections of communication within the organisation and that the same
message is communicated in a clear manner from both leaders. These statements are consistent
with the results from the questionnaires.
Competition
Vadas and Fraser both stated that although conflicts do occur, they are generally dealt with behind
closed doors and generally do not impact on the daily operations of the organisation. There is also
distrust between the leaders. However, compared to the responses from the managers, it is unclear
whether there are unhealthy levels of competition between the leaders, whether they are trying to
control each other and whether a power struggle is evident between them. The colleagues’
statements also appear to indicate that they tend to question each other’s motives in front of staff.
The response from the two leaders on this topic indicates that it may be tough questioning being
seen or perceived as questioning the others motives.
Staff interaction, morale and mentoring
Vadas and Fraser agreed that shared leadership and autonomy is encouraged throughout the
organisation and managers benefit more from having two leaders mentor them than would have
been the case with only one. Their leadership styles are very similar, therefore making it clear to the
employees what their own roles within the organisation are as well as the roles of the leaders. The
responses from the managers confirms these statements, however, it is unclear whether the joint
leadership model can be seen as a stable model compared to the more traditional single leader
structure.
Governance, oversight and ethics
Vadas and Fraser indicated that the governance and ethics of the organisation is increased and
each leader is aware of his role within the governance responsibility framework. They also stated
that they do not shy away from their responsibility for governance in the organisation and that there
are no conflicts between the leaders as to the importance of governance and ethics. Each leader is
up to date as to the legal governance requirements imposed on them and understand the
consequence of non compliance. The respondent’s questionnaire results agree with these
statements.
Financial implications
Vadas and Fraser agreed that having two leaders justifies the additional remuneration expense and
the joint leaders each deserve the same remuneration and benefits and they are not in conflict over
32
their individual remuneration. They also confirmed that hiring consultants to fill any skills or
competency gap the absence of one leader would bring would be very expensive. These statements
are consistent with the results from the questionnaires.
4.6.
CONCLUSION
From the statistical analysis of this chapter it can be concluded that the transfer and enhancement
of competencies and skills are a benefit of the joint leadership model. Decision making is also
enhanced because joint leaders can confirm each other’s decisions. However; decisions are not
always made in a timeous and efficient manner. It is also difficult to gain access to both leaders for
decision making or to schedule both of them for decision making appointments.
The strategic process and development of strategy benefits from the joint leadership model, as each
leader brings a different aspect of strategy to the process. Only one strategic message is voiced and
everyone in the organisation is clear on what that message is. Communication in the organisation is
not in disarray because of the presence of joint leaders. One message is still sent out and
responsibilities for communication are clearly assigned.
Although not stated by Vadas and Fraser, it is clearly perceived from the questionnaire responses
that there is competition between joint leaders and that it influences the organisation. They also
sometimes try to control each other and question each other’s motives, which could lead to staff
having to choose sides. This is an aspect of joint leadership which is a clear disadvantage compared
to a single-leader structure. The staff do however benefit from a joint structure in the sense that they
receive mentoring from two leaders. The fact that the stability and viability of a joint leadership model
is questionable confirms that, without the right partner in the role, it is not a sustainable model.
From a governance and oversight perspective, having joint leaders does lighten the load of
governance and there is no indication that one leader neglects his duties or responsibilities. More
time is also available for oversight – another beneficial aspect of joint leadership. There is no clear
indication whether the additional financial burden of a joint leadership model is detrimental to the
organisation, as competencies and skills are acquired which would have been sourced from third
parties if found lacking in a sole leader. It would also appear that once the accountabilities and
responsibilities are assigned, remuneration should not be a topic of contention between leaders.
33
CHAPTER 5
SUMMARY,CONCLUSION AND RECOMMENDATIONS
5.1.
INTRODUCTION
In the previous chapters of this research assignment, a broad overview of Midas Earthcote’s history
and leadership were provided. An in-depth literature review regarding benefits and pitfalls of joint
leadership, which formed the framework for the empirical research, as well as a discussion and
analysis of the research set the stage for this final chapter.
In the chapter a summary of the research assignment will be provided, conclusions from the research
results will be presented and recommendations for future research will be made. In drawing this
study to a close, some concluding remarks will also be provided by the researcher.
5.2.
SUMMARY OF SEARCH RESULTS
5.2.1.
Research problem
At the beginning of the assignment the researcher stated the objective of determining the benefits
and pitfalls of joint leadership.
In an attempt to gain greater insight into this subject, it was decided to evaluate the various benefit
and pitfall themes of joint leadership by means of a survey, through a questionnaire which was
completed by the senior and middle managers of the organisation as well as interviews with the joint
leaders themselves.
5.2.2.
Literature study
A literature study was conducted with the aim of providing a broad overview of the literature available
on the subject of benefits and pitfalls of joint leadership. From the literature review, eight themes
became apparent.
The first theme was that of competencies and skills and focuses on whether the joint leadership
model benefits from the additional and diverse competencies and skills offered by not one but two
leaders. The literature agrees that this is a benefit of joint leadership, as it will be difficult to find the
matching competencies and skills of two individuals in one other person.
Secondly, the theme of decision-making was considered. The literature indicated that there are
various benefits and pitfalls associated with this theme in a joint leadership structure. A benefit
mentioned was that the degree of confidence in the decision is increased when discussed and
34
agreed upon by two leaders. The major pitfall, however, is that consensus on a decision is not easily
reached, delaying important deadlines and implementations. It has also been shown that it is
problematic to arrange the schedules of both leaders in such a way that they can get together to
decide on everyday operational issues.
Thirdly, the topic of strategy and strategic alignment was discussed. The literature showed that
strategy development and implementation may benefit from joint leadership, but the organisation
and staff may not receive a clear indication as to what the strategic vision is and the leadership may
not send the same message. In addition, a potential pitfall identified was the fact that the leadership
might not share the mission, vision and values of the organisation.
The fourth theme discussed was that of communication. The literature suggests that the joint
leadership structure serves as a model for healthy interaction, problem solving and resolving
differences, thereby constituting a benefit. However, it also indicates that communication may be
ineffective if the joint leaders do not share the same message.
Theme number five was that of competition. Competition is by far the most controversial of the
themes, as it suggests that joint leadership will inevitably create unhealthy levels of competition
between the leaders; they will try to control each other and a power struggle will ensue. This will
leave the staff and management feeling compelled to choose sides and will hamper the success and
growth of the organisation.
Theme six was that of staff interaction, morale and mentoring. It indicates that a possible benefit of
joint leadership is that autonomy and shared leadership is encouraged throughout the organisation
and managers benefit more from having two leaders mentor them than just one. It is suggested that
a drawback could be the fact that if the leadership style of the two leaders are very different, it may
create friction and staff may not know where they fit into the organisation, as one leader may have
a autocratic style and the other a autonomous style.
Theme seven is that of governance, oversight and ethics. The literature suggests that the oversight
over governance will increase under two leaders instead of one. From this notion, further
assumptions were drawn that both leaders will understand their role in governance and will not shy
away from their responsibilities. The only drawback which will hamper effective oversight is if the
joint leaders do not agree on the importance of governance and ethics.
Lastly, the theme of finance was discussed, which relates to the financial implications of having joint
leaders. The potential drawbacks were that an additional person in the role will by default be an
additional expense for the company and that joint leaders might start arguing over who deserves the
higher remuneration package. A suggested benefit was that joint leadership was still less expensive
35
than to hire the services of temporary consultants to make up for the shortcomings in competencies
and skills that only one leader will have.
These eight themes later formed the backbone of the questionnaire used to evaluate the benefits
and pitfalls of joint leadership from the viewpoint of middle and senior management at Midas
Earthcote. The themes were also used to form lead questions in the interviews conducted with Mike
Vadas and Simon Fraser.
5.2.3.
Midas Earthcote background and leadership
Chapter 3 of the research assignment aimed to provide the background and context to discuss how
it came to be that Midas Earthcote decided on a joint leadership structure. The chapter provided an
overview of Midas Earthcote’s history, focusing on the lineage of both Earthcote and Midas Paints
and their eventual merger. A broad overview of the history indicated the following historical areas
and turning points which lead to the joint leadership model at the company:
•
History of Midas Paints
•
History of Earthcote Traditional Paints
•
Merger to form Midas Earthcote
•
Takeover by Freeworld Coatings (now Kansai Plascon).
The main focus of this research assignment is on the use of the joint leadership model after the
merger of the companies. The next section provides a cursory glance at the points mentioned above.
5.2.4.
Empirical research
In Chapter 4, the benefits and pitfalls of joint leadership was analysed in more detail, based on the
research conducted amongst all the middle and senior managers of the organisation. This research
entailed the completion of a questionnaire sent via email to eighteen members of the middle and
senior management. The questionnaire was designed according to the eight themes as discussed
in Chapter 2 and aimed to compare the benefits and pitfalls of the literature against the perceptions
of their colleagues. The interviews with Vadas and Fraser was also reflected on and compared to
the views of their colleagues. From this, the researcher deducted certain benefits and pitfalls of joint
leadership at Midas Earthcote.
5.3.
CONCLUSIONS DRAWN FROM RESEARCH RESULTS
From the statistical analysis in Chapter 4 and an analysis of the personal interviews with Vadas and
Fraser, the following conclusions were drawn:
36
i)
The research findings of this study indicate that the roles and responsibilities of Vadas and
Fraser are clearly defined and that the skills and competencies of the one leader enhance that
of the other. Furthermore, the skills and competencies required for this role is encompassed
in the skills and competencies of both leaders. This finding is consistent with the responses
from Vadas and Fraser on this theme. However, from the results and interviews it is still unclear
whether one person would not have been able to perform this role alone. From the quantitive
results gained from response to questionnaires as well as qualitative analysis, it can hence be
concluded that this theme is a benefit of joint leadership.
ii)
A further conclusion drawn from the research findings is that decisions are not necessarily
made in an expedient manner and that gaining access to both the leaders for their input on or
to make decisions is not easy. However, practically it is beneficial to have two leaders as, for
instance, scheduled meetings can continue and decisions can still be made in the absence of
one or the other leader. Having another person as a sounding board for decision-making is
also very beneficial and their colleagues trust the decisions of both Vadas and Fraser enough
not to question it with the other leader. This finding is consistent with the responses from Vadas
and Fraser’s remarks on this theme. From the quantitive results gained from response to
questionnaires as well as qualitative analysis, it can hence be concluded that this theme
exposes a pitfall of joint leadership.
iii)
The research findings also indicated that both leaders display the same strategic intent and
that the strategic direction is made clear and in one voice. In general, management therefore
feels that they receive a signal strategic message from the joint leaders. Both leaders also
portray the mission and vision as well as the values of the company very well. Lastly, having
joint leaders increases the strategic options and opportunities being discussed and evaluated.
This finding is consistent with the responses from Vadas and Fraser on this theme. From the
quantitive results gained from response to questionnaires as well as qualitative analysis, it can
hence be concluded that this theme encompasses a benefit of joint leadership.
iv)
It is also clear from the research that both the leaders share information amongst each other
and are aware of what the other is doing and that the joint leadership structure serves as a
model for healthy interaction, problem solving and resolving differences. It is also clear which
leader is responsible for which sections of communication within the organisation and that the
same message is communicated in a clear manner from both leaders. One negative is that
scheduling the same appointments for both leaders may be difficult at times. These findings
are consistent with the interviews conducted with Vadas and Fraser. From the quantitive
results gained from response to questionnaires as well as qualitative analysis, it can hence be
37
concluded that in this theme, the joint leadership does not show a definite inclination to either
the pitfall or the benefit side of the spectrum.
v)
Regarding conflict, the research findings indicated that although conflicts do occur, they are
generally dealt with behind closed doors and generally do not impact on the daily operations
of the organisation. However, the findings indicated that there is a perceived degree of distrust
between the leaders, along with unhealthy levels of competition and a struggle for control and
power. From the findings it also appears that they tend to question each other’s motives in
front of staff. Except for the feedback about the private resolving of conflicts and its non-impact
on the organisation’s operations, the findings are not consistent with the responses from Vadas
and Fraser, who sketched a more positive picture of their levels of competition and conflict. As
the managers are more and positively more objective about the conflict between the CEOs, it
can be concluded that this theme is a pitfall of joint leadership.
vi)
It is clear from the survey that shared leadership and autonomy is encouraged throughout the
organisation and managers benefit from the mentorship of more than one leaders. The CEOs’
leadership styles are very similar, which helps to define the roles of their colleagues and
themselves clear to all concerned. These findings are consistent with the interviews conducted
with Vadas and Fraser, however, it is unclear whether the joint leadership model can be seen
as a stable model compared to the more traditional single leader structure. From the quantitive
results gained from response to questionnaires as well as qualitative analysis, it can hence be
concluded that this theme is a benefit of joint leadership.
vii)
The findings indicated that the governance and ethics of the organisation is increased and
each leader is aware of his role within the governance responsibility framework. Furthermore,
the results indicate that the leaders do not shy away from their responsibility for governance in
the organisation and that there are no conflicts between the leaders as to the importance of
governance and ethics. Each leader is up to date as to the legal governance requirements
imposed on him and understands the consequence of non-compliance. These findings are
consistent with the responses from Vadas and Fraser. From the quantitive results gained from
response to questionnaires as well as qualitative analysis, it can hence be concluded that this
theme is a benefit of joint leadership.
viii)
It is also clear from the research that having two leaders justifies the additional remuneration
expense, the joint leaders each deserve the same remuneration and benefits and they are not
in conflict over their individual remuneration. The results also state that hiring consultants to fill
any skills or competency gap the absence of one leader would bring, would be very expensive.
These findings are consistent with the responses from Vadas and Fraser. From the quantitive
results gained from response to questionnaires as well as qualitative analysis, it can hence be
38
concluded that this theme is not necessarily a pitfall of joint leadership, as the literature would
suggest.
5.4.
RECOMMENDATIONS
The researcher recommends the following for further research:
i)
This study could be repeated on a broader scale to evaluate more than one organisation with
joint leadership at a time. From the literature review, it is evident that research on this topic in
South Africa is very limited. Expanding this research to South African companies with joint
leadership will therefore be a valuable addition to the current literature. The same
questionnaire could then be distributed to various other institutions in order to determine if
there is any consistency in the findings regarding the benefits and pitfalls of joint leadership.
5.5.
FINAL CONCLUSIONS
Considering the research findings of this study, the researcher believes that the current literature is
correct in many aspects, but not convincing in other statements made.
Competencies and skills are enhanced and transferred in a joint leadership model, while overall
decision making is hampered. The organisation benefits from a more compelling and robust strategy
development process and implementation associated with the joint leadership. The research did not
confirm the literature’s predictions that communication would be less effective, however it could
confirm that interpersonal communication skills, problem solving and conflict resolution are
enhanced in the entire organisation. The the research clearly confirmed the view from the literature
that competition amongst the joint leaders is a potential pitfall of this structure.
Staff morale and mentoring benefits from this structure due to a culture of autonomy being created
in the organisation, although this depends on the leadership styles of the leaders being similar. In
general, the level of governance and oversight in the organisation also increases, which confirms
the arguments presented in the literature. Finally, it could not be confirmed whether the financial
burden of an additional individual in this role could be regarded as an unnecessary and exorbitant
expense, as suggested by the literature.
In drawing this study to a close, the researcher concludes that the joint leadership structure in Midas
Eartchote has so far posed more benefits than pitfalls and that Vadas and Fraser have done
exceptionally well during difficult economic and transformational times to ensure the past and future
success and growth of the company.
39
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42
APENDIX A:
INTERVIEW WITH MIKE VADAS
1.
Mr. Vadas, why did you decide on a joint leadership structure?
I have known Simon and his business for more than a decade before we decided to merge.
Midas has always sold broadwall products and Earthcote sold very specialised and high
products. None of the competition out there at the time had both ranges of products and
therefore the merger, which would bring a full range of commercial and retail offerings, just
made sense. However, my experience with specialised products was very limited and I was
never evolved in the development of new products, I left that to my technical staff. I also had
no experience in marketing or retail as the Midas range was sold to contractors. In light of
these factors, it was clear that we both needed to be involved in the leadership at the highest
level, each one ensuring the success of the company in the areas of the business assigned
to them. We both are entrepreneurs and very driven, but respected each other’s
accomplishments. I believe another reason why this structure could work was because we
were never competition for each other.
2.
What do you perceive as benefits and pitfalls of this model?
A definite benefit is the sharing of knowledge and expertise. We both have our specialty
areas and it also helps to develop the skills in the other person. Sharing the workload is also
very helpful and it helps running decisions past one another for a different view. The staff,
especially management, have definitely benefitted from this structure as the combination of
Simon and I really give great insight and strategic intent to the organisation. On the downside,
if I can call it that, the additional cost is something that you have to make sure the company
can handle. I would also say the control and governance over the company has improved.
Doing it alone is a substantial strain on an entrepreneurial company and one person. Lastly
I would say that you also have to be careful that leaders do not let competition between them
get the best of them, and definitely never let the staff see you argue.
3.
Do you feel that your competencies and skills are enhanced by this structure and the
presence of Fraser in the same role?
Definitely, Simon is an artistic character with great ideas about products, marketing and what
the consumer wants. I have been a manufacturer and salesman focusing on the operational
side and therefore his insights and experience is invaluable. Simon, on the other hand, does
not care too much about analysing numbers or how the products actually are made and
delivered. That is where my competencies bring the balance to our relationship. The one
43
area we both fall a bit short on, Simon to a greater extent, is our lack of in-depth financial
understanding.
4.
When it comes to decision making, what would you say is the advantages and
disadvantages of a joint leadership structure?
The mayor drawback is that it is sometimes difficult to get both of us to approve a decision
because we are not always in the same place and we don’t always have the same information
in front of us. We have split most of the responsibilities, therefore in that sense it is definitely
a benefit, as all the decisions do have to be made by one person. People don’t realise how
many decisions are made are made at this level. I would also say, as mentioned before, that
it helps with difficult decisions to run it by someone for a different perspective. I also feel that
our decisions are respected and I have never found that a decision someone didn’t like was
referred to Simon.
5.
What value, if any, does a joint leadership structure bring to the strategic
development and implementation processes?
In one word, a lot. The various views and insights brought to the table by two people are
immense. Simon and I have so many diverse views on business and the markets that we bring
a myriad of views to the table. Importantly, both need to support the same overall strategy and
not be perceived to have different views on the future of the company.
6.
Would you say that you live the mission, vision and values of the organisation?
Absolutely; I expect the same from all the staff. We have a very strong vision and mission that
Simon and I share and we have been instilling it in the organisation. This was also another
reason we merged – because we had such similar strategic views and visions for our
companies.
7.
When it comes to communication in the organisation, what are your views on the
benefits and pitfalls of having two leaders?
The most important thing is that whatever is communicated, it is done in the same voice by
both leaders. Staff must always see a united leadership and message. Probably the most
frustrating aspect is the fact that it is difficult to get us in the same room sometimes. However,
there is a constant flow of communication between us and we always know what the other
person is busy with. It is also important that the staff know that Simon and I talk to each other
as it also helps with solving issues as they come up.
44
8.
Do you perceive a level of competitiveness amongst you and Mr. Fraser that could
influence negatively on the company, your staff and management?
I would be lying if I said that there was no competition. Of course there would be, we are very
driven and ambitious people. However, I would not say the level of competitiveness is at a
level which influences the company negatively. I suppose that it is possible that staff and
management may see a level of competition that we don’t. However, it is important to never
have disagreements “in public”, as this could breed division and contempt. In the past, one or
the other have stepped over the line in terms of infringing on the other’s area of responsibility,
but it has always been in good faith.
9.
Do you feel that the management and staff benefit personally and professionally from
having joint leadership and secondly, do you think the joint leadership structure is a
stable one?
Absolutely. Because Simon and I are so different but still have the same leadership style, staff
can get different perspectives and viewpoints in terms of leadership, guidance and mentoring.
Both of us let our managers get on with things and don’t interfere; we trust them to run the
day to day business. The staff also knows that I am the one with the softer people skills and
Simon can take on the tough stuff. To answer your second question, I believe this model can
be stable, but it all hinges on finding the right partner. It is inherently a more difficult structure
to manage and control, therefore without the right partner, it is doomed from the outset.
10.
What are your views on the effectiveness of governance and oversight in light of a
joint leadership model?
As mentioned before, the strain on one leader to deal with the pressures of governance is
rather immense in today’s regulated environment. It is not an area I like doing and I think even
less so for Simon, therefore having another person performing the same role really is a benefit.
We do have our areas of the business that each of us takes care of, but this is one area in
which we can’t shed the responsibility. I have always tried to instil an ethical base within the
organisation and its staff.
11.
What do you see as the financial implications of having joint leaders (and please
comment on the necessity of these expenses)?
Unfortunately, there is an additional financial burden placed on the company when having two
leaders in this position. How else? The question comes in, can the company afford it and what
would be the cost be of not having this additional expense? The combined skills and
45
experience that we bring as a team justifies the costs, because having to employ a marketing,
sales or development manager and/or director would be just as expensive. Other leaders
appoint others to advise them and in most cases consultants that are just as expensive. It is
imperative, however, that the leaders are treated as equals and one can’t expect more than
the other, especially since we split the load equally.
46
APPENDIX B:
INTERVIEW WITH SIMON FRASER
1.
Mr. Fraser, why did you decide on a joint leadership structure?
It made sense, because coming from two different sections of the industry, Mike did not
understand the dynamics of retail and specialised products and I had no idea of the
commercial contracting market. I wanted to continue with the marketing and product
development that I love doing and did not want the burden of the day-to-day operations on
my shoulders. The same with Mike, he does not care much for marketing or R&D. We decided
to share the responsibility as an interim measure but due to the success of the structure, we
decided to continue with it.
2.
What do you perceive as benefits and pitfalls of this model?
A definite benefit is the sharing of skills and the sharing of the workload. I learn a lot from
Mike and I hope he learns a lot from me. I am not that involved in the finances of the company
but I can assume that there is an obvious additional cost to having both of us at the top. But
this is justified in my opinion. We complement each other. The strategic development process
and implementation of strategy, I find, is also a massive benefit. I also believe the staff finds
benefit in this structure because one of us is always available.
3.
Do you feel that your competencies and skills are enhanced by this structure and the
presence of Mr. Vadas in the same role?
Absolutely. He has invaluable insight into and a remarkable understanding of the market and
the competition. He managed to take his company to the number one spot in terms of sales
to contractors in the Western Cape. This is remarkable, taking into account the giant
competition out there. We definitely learn a lot from each other and I rely on him for his
financial insights. I have never been interested in running a business and have been an
innovator and entrepreneur at heart since I can remember. Having Mike meant that I could
continue with what I knew my competencies and skills were and Mike could focus on his
strengths. One would never find our combined skills in one person, that I am sure of. He also
keeps me on my toes and in check in terms of my responsibilities.
4.
When it comes to decision making, what would you say is the advantages and
disadvantages of a joint leadership structure?
47
It is difficult when we both travel or one is not in the office. We don’t make all decisions
together, however, the important ones we do. However, one of us is normally always available
to make non-crucial decisions. Technology has helped a lot as we often Skype, mail or phone
when we need to make an important decision. Sometimes though, we have information that
is difficult to explain if we are not in each other’s presence or in the presence of the person
that needs to explain it to us; then we do have difficulties. I must also say that having Mike as
a sounding board for my decisions really does help, because I don’t necessarily always think
of everything he does.
5.
What value, if any, does a joint leadership structure bring to the strategic
development and implementation processes?
It’s massive. Our combined understanding of the market, customer and competition dynamics
makes the process that much more valuable. It also helps to have two leaders driving and
implementing the objectives and plans. It really is a lot of work and sharing it helps. Obviously,
when we started out there was a concern that the strategic vision would not be shared and
we would have our own opinion on things which would hamper the success of the
organisation.
6.
Would you say that you live the mission, vision and values of the organisation?
Yes, and myself and Mike expect everyone in the company to do the same. We are a family
and share the same culture. That is why we agreed before the merger on a common vision. It
is also very important that all staff know Mike and I share the same vision and mission for this
company so that everyone is clear as to where this company is headed.
7.
When it comes to communication in the organisation, what are your views on the
benefits and pitfalls of having two leaders?
As long as the message is clear and both leaders give it, there should never be an issue. We
also always request input from each other on specific correspondence that we send out and
companywide communication is done by both of us. We both have our own areas of the
business that we are responsible for and this includes communication. I can also tell you that
communication skills and general interaction between managers and staff have also improved
due to the way in which Mike and I communicate.
8.
Do you perceive a level of competitiveness amongst you and Mr. Vadas that could
influence negatively on the company, your staff and management?
48
We do compete, for lack of a better word, but it is not unhealthy. We push each other and for
others it may be perceived as being competitive. We work together and if I or Mike succeeds,
then we all succeed, so there is no need for competition. We don’t infringe on each other’s
responsibilities but have the freedom to question actions or decisions if required. It is the
responsibility of the leader to question anything that he feels uncomfortable with. Tough
questions need to be asked and tough decisions made in our positions and this might appear
to outsiders as being competition. Challenging each other is not competition. The inner
workings of a joint leadership structure are difficult for people on the outside to grasp.
9.
Do you feel that the management and staff benefit personally and professionally from
having joint leadership and secondly, do you think the joint leadership structure is a
stable one?
Yes, I do. The mentoring we provide is invaluable. Due to our different personalities, staff has
a choice of which one of us they feel more comfortable dealing with. Obviously, the staff that
we each worked with before the merger feels more comfortable dealing with the leader they
had, but it brings a different perspective to things, should they wish. Both Mike and I have very
similar leadership styles. We don’t like to micromanage and we don’t like handholding. We
employ people who can get on with things and we let them get on with things. More and more
companies will start to use the joint leadership model, if they are able to find like-minded
people.
10.
What are your views on the effectiveness of governance and oversight in light of a
joint leadership model?
This is something I have never liked, because I am not a structured person but come from
marketing with an artistic flair. However, both Mike and I do understand the responsibility
placed on us and fully comply with what I need to do. I am acquainted with the laws and
regulations applicable to me and regularly go on update training to keep up to date. Mike
keeps me in check with this a lot, so I value his guidance. Having an ethical workforce that
Mike and I have known for a long time really does help with the process of governance.
11.
What do you see as the financial implications of having joint leaders (and please
comment on the necessity of these expenses)?
We both were the MD of our respective companies and this continued after the merger. Of
course there is an additional expense. However, there would also be an additional expense if
you had to purchase the skills we bring to the table. We both understand that if the company
would ever be in a position not to be able to deal with the expense, we would look at our
49
options, but I see this expense as nothing additional. Taking into account the performance of
the company and our strategic vision, I believe the additional expense to be justified. By Mike
and me agreeing upfront to the responsibilities and accountabilities of the roles, there has
never been friction regarding remuneration between the two of us.
50
APPENDIX C:
JOINT LEADERSHIP QUESTIONAIRE
Section 1
Competencies, duties and skills
Read the statements that follow and use the scale below to indicate the extent to which u agree
with the statement. Mark (X) one response to each item.
Responsibilities
and
accountabilities
are
clearly
defined (i.e. chores are split up)
Activities and operations are assigned to the
appropriate leader with the appropriate skill set and
experience.
The skills and competencies of the one leader are
enhanced by the competencies and skills of the other.
All skills and competencies required for the position is
encompassed in the skills and competencies of the two
leaders.
The necessary competencies and skills required for
this role could not have been attained from only one
individual.
agree
5
Strongly
4
Agree
3
Neutral
Disagree
2
disagree
Strongly
1
51
Section 2
Decision making
Read the statements that follow and use the scale below to indicate the extent to which you agree
with the statement. Mark (X) one response to each item.
Decision making is done in an expedient and
efficient manner.
It is easy obtaining access to both decision
makers when both have to approve decisions.
A practical benefit is that meetings may continue
as scheduled even when one leader is ill or
otherwise unable to make a session.
A practical benefit is that decisions may still be
made even when one leader is ill or otherwise
unable to make a decision.
When one leader does not agree with you, you
accept his decision and you do not revert to the
other leader seeking an alternative response.
Having two leaders approve a decision reinforces
the fact that the correct decision was made.
agree
5
Strongly
4
Agree
3
Neutral
Disagree
2
disagree
Strongly
1
52
Section 3
Strategy and strategic alignment
Read the statements that follow and use the scale below to indicate the extent to which you agree
with the statement. Mark (X) one response to each item.
Both leaders display the same strategic intent.
The strategic direction is made clear and in one
voice.
Both leaders live and portray the company vision
and mission.
Both leaders display and commit to the same values
that they developed for the company and its
employees.
More and better strategic opportunities and options
are brought to the fore.
agree
5
Strongly
4
Agree
3
Neutral
Disagree
2
disagree
Strongly
1
53
Section 4
Communication
Read the statements that follow and use the scale below to indicate the extent to which you agree
with the statement. Mark (X) one response to each item.
Information is shared and discussed and both
leaders are aware of what the other is doing.
Joint leadership allows for modelling of healthy
interactions and problem solving between two
individuals.
Joint leaders serve as a model to staff members by
constructively resolving differences.
Scheduling of both leaders for appoint-ments that
they must both be present for is easy.
It is clear which leader is responsible for which
sections
of
the
communication
within
the
organisation.
Communication from the joint leaders are clear and
they send the same message i.e. there are no mixed
signals.
agree
5
Strongly
4
Agree
3
Neutral
Disagree
2
disagree
Strongly
1
54
Section 5
Competition
Read the statements that follow and use the scale below to indicate the extent to which you agree
with the statement. Mark (X) one response to each item.
Interpersonal conflicts between the leaders are done
privately and behind closed doors.
Interpersonal conflicts between the two leaders do
not hampers daily operations.
There are no visible levels of distrust that can be
seen between the leaders.
The leaders do not show unhealthy levels of
competition between them.
It seldom appears that one leader is trying to control
the other.
A power struggle is not evident between the two
leaders.
The joint leaders do not question each other’s
motivations and intensions in front of staff.
Each individual leader does not appear to reduce his
effort /commitment due to having a joint role.
agree
5
Strongly
4
Agree
3
Neutral
Disagree
2
disagree
Strongly
1
55
Section 6
Staff and Mentoring
Read the statements that follow and use the scale below to indicate the extent to which you agree
with the statement. Mark (X) one response to each item.
A shared leadership mindset is encouraged across
all levels in the organisation.
Management benefits from the mentoring of not one
but two leaders.
You perceive the joint leadership model as being a
overall stable structure compared to a single leader
conventional structure.
The leadership styles (i.e. authoritative, hands on,
employee autonomy etc.) of the leaders are very
similar and therefore managers understand the role
of each leader within the organisation.
The leadership styles (i.e. authoritative, hands on,
employee autonomy etc.) of the leaders are very
similar and therefore managers understand their
own role within the organisation.
agree
5
Strongly
4
Agree
3
Neutral
Disagree
2
disagree
Strongly
1
56
Section 7
Governance, oversight and ethics
Read the statements that follow and use the scale below to indicate the extent to which you agree
with the statement. Mark (X) one response to each item.
The oversight over the governance and ethics of the
organisation is increased.
Each leader is aware of his role within the
governance responsibility framework.
Each leader does not shy away from his
responsibility for governance in the organisation.
There are no conflicts between the leaders as to the
importance of governance and ethics.
Each leader is up to date as to the legal governance
requirements imposed on them and understand the
consequence of non-compliance.
agree
5
Strongly
4
Agree
3
Neutral
Disagree
2
disagree
Strongly
1
57
Section 8
Financial implications
Read the statements that follow and use the scale below to indicate the extent to which you agree
with the statement. Mark (X) one response to each item.
The benefit derived from having two leaders justifies
the additional remuneration expense.
The
joint
leaders
each
deserve
the
same
remuneration and benefits
The leaders are often in conflict over their individual
remuneration.
The additional expense for having two leaders could
be better utilised.
It would be more expensive to hire consultants to fill
any skills or competency gap the absence of one
leader would bring.
Thank you very much for completing the questionnaire.
agree
5
Strongly
4
Agree
3
Neutral
Disagree
2
disagree
Strongly
1