Veeam’s co-CEO Structure Explained

Backup company Veeam recently re-structured to promote COO Peter McKay and co-founder (and CTO) Andrei Baronov to be co-CEOs of the company.

I'm not the only one to raise their eyebrows over this arrangement. Having multiple people in charge makes it tricky to know who is responsible for making a decision. It's a rare structure, and of the few companies to attempt it, many don't do very well.

I asked co-CEO Peter McKay about the structure at the company's VeeamON conference in New Orleans this week.

“Andrei is the technical genius behind Veeam,” said McKay. “He knows the vision of the product. He knows where it's going.” Baronov has always been the technical lead for Veeam, and his co-founder Ratmir Timashev was always modest in deferring to Baronov's skill at understanding the product and customer's desires for what it should do. McKay's short period as COO while ex-CEO William H. Largent ran things after taking over from Timashev in June 2016 appears to be more about McKay becoming familiar with the culture of Veeam before taking over as CEO.

McKay was clear that his role is not one of a single commander responsible for all things. “It's not that, ‘Hey, I'm the one person that's running this company'”, said McKay, “I came here because I complemented the team.” The structure is far more similar to the way Veeam was run under Timashev and Baronov for most of its life: a sales and operations oriented CEO (Timashev, now McKay) and a technical lead (Baronov) responsible for the product itself.

“He needed me, and I need him,” said McKay.

I can be a little slow, so it took me a while to figure out what Veeam's co-CEO structure is actually about, and it's not as rare a structure as it might seem, it's just that the titles are wrong. Swap industries, and the arrangement is very clear.

Baronov is the creative director, and McKay is the CEO.

This is a very common structure in creative industries like fashion, design, film, or advertising. The best companies in these industries have a carefully balanced pairing of a creative lead who handles all of the “softer” side of the business while a business-oriented CEO handles all the financial, sales, and operational aspects of the company. They work as a close-knit pair, and an imbalance on either side tends to cause major problems.

Too much creativity (or the wrong kind) results in flights of fancy that—while artistically interesting—are commercial failures, which limits the company's ability to keep doing it. Too much business crushes the artistic soul of the company, and sales die because the products are boring or mis-targeted. But when the two roles are well cast, sales take off.

With the benefit of hindsight, Veeam looks a lot more like a fashion brand than a technology company in many ways. It has long had a CEO/Creative Director structure with Timashev out front performing for the world while Baronov labors over his creation in relative obscurity (he rarely does interviews or appears in public). The company continues to spend a lot money on marketing, now around 50% of sales, according to statements made at the company's 2017 VeeamON conference in New Orleans. Its customers love the product, and the company. Veeam has a particular aesthetic and mythos that it is trying to preserve even as it grows.

It's the kind of structure that seems obvious in hindsight, so I'm probably not the first to have made this connection. I'm finding it an interesting lens with which to analyse other technology companies, beyond the obvious consumer-oriented brands like Apple, which has long been trying to cement itself as a luxury brand.

There's plenty of science in technology, but there is also art. Anyone who has done it knows there is an aesthetic sense of what beautiful code looks like, and many a mathematician has admired the beauty of a particular proof, just as we can admire a well designed gadget, painting, or dress. Indeed, the engineering in high fashion is impressive.

Perhaps we should be looking for more of these symbiotic relationships in technology companies, particularly those that claim to be engaged in “innovation”?

I attended VeeamON in New Orleans as a guest of Veeam.

This article first appeared in Forbes.com here.