Being in the business of safeguarding hosted data, it's crucial for Ann Arbor company
Online Tech to have two of everything: power supplies, generators--even CEOs. Online Tech's CEO, Yan Ness, and former COO Mike Klein formally announced their new partnership as co-CEOs earlier this month.
"In most organizations you wouldn't find that, and you wouldn't build it, design it, and organize it that way," Ness says. "It'd be too happenstance to have two people that could pull this off. You wouldn't want to bet on finding two CEOs. It's hard enough to find one."
But in the case of this duo, it's a natural partnership several years in the making. Ness invested in Online Tech while the company was still focused on dial-up Internet services in 1998. He began shifting focus when he bought Online Tech in 2003, developing secure data centers for clients to house and access their information 24/7. After hitting what he describes as a "plateau" in 2007, Ness brought Klein aboard as a partner in 2008. Online Tech has quadrupled in size since then (staff doubled from 21 to 42 just last year), attracting 300 clients including
Pet Supplies Plus and
Two Men And A Truck. Both men chalk the success up to their close, supportive working relationship.
"There's structure where you need it, but not a lot of formality around it," Ness says. "We would debate differences pretty vigorously, but always end up at a common place that we both felt was better than where we started. In the other 90% of cases, we're very strongly in alignment on values. We noticed that dynamic, we noticed that it made us better and we noticed that it made us unique."
Under the new arrangement, Ness handles the technical side of the operation, while Klein manages client interactions, marketing and sales. Klein says the shift has required "surprisingly little" adjustment for him and Ness.
"It's more communicating it to our employees and communicating it to the outside world than it really is any change in the way we work day-to-day," Klein says. "When we first announced it, I think people were wondering what that meant. But as it's gone on, they've realized it's just business as usual."
While the co-CEO model is unusual in the business world, it's certainly not unheard of.
Whole Foods has co-CEOs, and Martha Stewart Living has used the model as well. But Klein says co-CEO partnership in a small business is a different, more feasible proposition--and even then, it's definitely not for everyone.
"It's more unique to our relationship than it is an "everyone should do it" kind of thing," he says. "Even in the Fortune 500, when co-CEOs are named, they're named as competitors, where one will emerge the winner and one will leave the company in the next 18 months. And that's not the situation here at all."
Klein and Ness will likely be counting on each other's support more than ever over the next 24 months, as they engineer an ambitious two-year expansion plan for the company. Online Tech"s current claim to fame is being the largest managed data center provider in Michigan, with two centers in Ann Arbor and one in Flint (conveniently spread across two different power grids, for those keeping track of that pattern of twos). The centers are state-of-the-art affairs, sporting massive power generators, door locks keyed to clients' fingerprints, and fire-suppression systems that use gas to deoxygenate server rooms instead of damaging the servers with water.
Ness and Klein are currently plotting a major push to replicate the successful formula and make Online Tech the leading data center in the Great Lakes region overall. The partners are currently sizing up 15 different Midwest cities as potential locations for four planned new centers. After dramatically growing the business over the past five years, they're ready to do it all over again, with what they call "Online Tech 3.0." And neither is stingy about the credit for getting it done.
"Mike's a world-class operator," Ness says. "He knows how to put in place management structures that frees people to do things that they never thought they could do. We're four times bigger than when he started, and that's because he's here."
Klein, too, is generous with praise for his fellow CEO, noting Ness's "contribution to the business" and "win-win" values.
"We're not like a used car dealership, where I sell you a car and you're never going to see me again," Klein says. "It's a long-term deal, that we're doing with our customers. I think he's a very creative, intuitive person, and on the technology side he really likes to roll up his sleeves and get in there."
Ness says the co-CEO arrangement is "like having a $20,000-a-month coach in your office right next to you." Appropriately enough for a business whose lifeblood is security, the co-CEO model gives the guys at the top a feeling of personal security.
"Any leader has a really lonely position," Ness says. "That's why they join peer groups. They're looking for someone else to share with. They can't go to the board, because they don't want to develop expectations and commitments for ideas that are still bouncing around. You basically spend a lot of time seeking a place where you can get people to really tell you what they think. And Mike and I have that with each other. It's really, really empowering."
Patrick Dunn is an Ann Arbor-based freelance writer and contributor to Metromode and Concentrate.
All photos by Doug Coombe