Interview with Warren Bennis on co-leadership in the merger of Viacom and CBS

On September 7, 1999, Viacom struck the biggest media deal in history when it announced its intention to acquire CBS for $36 billion. The new Viacom is expected to become a $80-billion powerhouse with interests in broadcast and cable TV, movies, radio, theme parks, Internet sites, home video, publishing and billboards. Assuming that U.S. regulators sign off on the merger, the pairing of the two media giants will also bring together two powerful leaders–Viacom’s Sumner Redstone and CBS’s Mel Karmazin–who have agreed to become the new Viacom’s CEO and president. Will both men be able to share power in a way that works to the advantage of the new company and its shareholders? Michael Useem, director of Wharton’s Center for Leadership and Change Management, discusses the challenges posed by co-leadership with Warren Bennis, professor of management at the University of Southern California’s Marshall School of Business and founding chairman of the USC Leadership Institute. What follows is an abbreviated version of the interview:

Useem: You co-authored a book published last March titled Co-Leaders: The Power of Great Partnerships. The announcement of the merger of CBS and Viacom last week created another such partnership between Sumner Redstone and Mel Karmazin. Is there a growing trend for companies to create co-leadership at the top? If so, why is that occurring?

Bennis: This has happened during the past five years for at least two or three major reasons. In one word, the reason is complexity–which has been engendered by the growing number of very, very large mergers. Last year alone, there were $1.6 trillion worth of mergers. This year, though we have a few more months to go, we have had almost $1.2 trillion worth of mergers worldwide. The hugeness, complexity and globalization that result from these combinations makes it very difficult for any one person to have the hubris to run such organizations without sharing power at the top. When you look at the proliferation of the C-word–the CEO, the COO, the CKO (chief knowledge officer), the CFO, the CLO (chief learning officer), the CIO–those are simply examples of how top corporate executives must share responsibilities.

As mergers force organizations and individuals whose cultures are quite different to fuse their operations–as is the case with DaimlerChrysler, for example–we will see more and more examples of companies setting up co-leadership arrangements. Peter Drucker once said that a CEO has to understand and deal with 51 areas of work. So I don’t see any way around the notion of co-leadership. This does not necessarily mean that there will be more co-CEOs. The situation may more closely resemble what is going on at Ford between William Ford and Jacques Nasser, where Nasser is the CEO and Ford is the chairman. But we are going to see more such partnerships at the top, even though they may not be called co-CEOs.

The case of Mel Karmazin and Sumner Redstone is interesting. From what I have read, it seems that they are locked into an agreement in which Redstone is the ubermensch or the CEO and chairman, while Karmazin runs all the units and takes charge of policy, acquisitions and planning. Clearly, this is a partnering relationship. This is true of a number of companies–whether it’s Craig Barrett and Andy Grove at Intel, Bill Gates and Steve Ballmer at Microsoft, Charles Schwab and David Pottruck at Charles Schwab, or Michael Armstrong and John Malone at AT&T. These are all examples of co-leadership….

Useem: What are the implications of co-leadership on who speaks to the board of directors for management, and who speaks to big investors for the company? Or, to put it differently, what advice would you give money managers, stock analysts and directors who have to work with companies that have co-leadership at the top?

Bennis: The ideal situation would be for both leaders to speak for the company, to the board and to Wall Street. I don’t think of Wall Street as a blob; it is composed of individuals who might relate more easily either to Redstone or to Karmazin based on past experiences. Karmazin has been terrifically powerful in Washington. He is really a super lobbyist. He will probably be doing more regulatory work than Sumner, because he is so much more familiar with that territory. Redstone will have more resonance with certain analysts, and Karmazin with others. So I don’t think that there must be just a single voice. As the cliche goes, both must read from the same page but it need not be just one voice that speaks for the new Viacom.

The full interview with Warren Bennis can be found at:
http://leadership.wharton.upenn.edu/l_change/Interviews_and_portraits/index.shtml,
and information on Warren Bennis is available at http://www.marshall.usc.edu/mor/people/BennisW.html.

From the Wharton Leadership Digest, September, 1999.