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Egos not allowed: Co-CEO strategy can be a win-win for small business

March 5, 2013

By Jennifer V. Higgins

The concept of co-CEO partnerships is one that has brought success to many well-known companies, including of Hewlett-Packard, Warner Brothers, Ben & Jerry and Smucker’s – as well as some newer household names like Whole Foods and Chipotle Mexican Grill. When SBAM member Online Tech of Ann Arbor announced in January their move to a co-CEO strategy, they joined the ranks of these historical business partnerships. More importantly, Online Tech has confirmed for other small business owners that they too can benefit from out-of-the-box creative leadership strategies to advance their companies and better serve their clients.

“Many companies are built around one leader at the head of the pack. At Online Tech, we want to build a stronger, more resilient company — with an exceptional people delivering exceptional experiences for our clients,’’ said Yan Ness, co-CEO of Online Tech and former SBAM President . “My co-CEO partner, Mike Klein, and I believe partnerships that encourage everyone to contribute their very best are far more powerful than packs where everyone is struggling to be on top.’’

Five Important Factors for Co-CEO Success
Ness and Klein are also quick to say that co-CEOs wouldn’t work for most companies or with most business leaders. The arrangement works for them because of their long working relationship and their complimentary “Yin and Yang’’ strengths. They’ve learned over time that they agree on 90 percent of the key decisions and work well together “off line’’ on any differences when that occur. To their point, co-CEO success typically depends on a few key factors:

  1. Concrete purpose, alignment of values and absolute lack of any type of power struggle.
  2. Complementary skills, strengths and leadership styles.
  3. Adept communication skills and a process for accountability. 
  4. Clearly defined roles.
  5. The ability to act on their own, and act as one.

As Ness shared, it’s often said that the CEO position is the loneliest job in the company.  There are some problems and some decisions that you can’t discuss with the rest of the management team or your board of directors.  “The combination of two experienced CEOs gives us an unusual advantage – the ability to bounce ideas off a peer that has the same stake in the outcome,” said Ness. “We approach things differently, but each brings something to the table that makes decisions better informed with peer review at the highest level.”

For Online Tech, the move to a co-CEO strategy was a natural step to get the flourishing company closer to its growth goals, including the addition of four more data centers in the Midwest over the next two years. The company currently has two data centers in Ann Arbor and one in Flint.

“As an industry, it’s a pivotal time for growth and as a company, we are in a perfect position with a new capital partner in place to act assertively and leverage all of the strong, positive energy at Online Tech to meet our company growth goals and ultimately better serve our clients,” said Klein.  “Last year we examined our company at every level to determine how we can best position ourselves for expansion. Our co-CEO strategy is a nice symbol for the type of partnership we endeavor to create and maintain with clients: a spirit of healthy, open communications and business arrangements where both we and the client give 100%.”

What are some additional reasons companies lean toward co-CEO partnerships? According to the University of Missouri’s Trulaske School of Business and their survey of 111 co-CEO partnerships, the circumstances breakdown as follows:

  • Merger or Acquisition – 20%
  • Family Company – 25%
  • Co-Founders of a Company – 15%
  • Interim Leadership Transition – 9%
  • Other – 30%

So far so good for Online Tech. According to the company’s co-CEOs the employees have embraced the strategy, the business is on the right growth track and their company culture has never been better. How about your company? Do you see a co-CEO partnership in your future?  Comment on this article and share your thoughts.

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