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ArticlesThe Interim Executive: Gaining a Competitive Business Edge through Interim Executive Management.
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Jacques Caussignac |
At least a half dozen Canadian firms offer interim executive services, while that number is estimated at around 80 in Britain, and more than 200 in the United States.
If you haven’t considered it before, now may be the time to examine whether using the services of a contract executive is for you.
Why hire contract executives
The most obvious use for a contract executive is to temporarily fill in for permanent executives who might be ill, away on a sabbatical or another assignment, or who resigned suddenly. It’s hard for an organization to function without leadership at that level for even a short period of time. Yet it’s too impractical to conduct a job search in just a couple of days.
Organizations should do succession planning to determine who may take over executive positions on a long-term basis. But no amount of planning can prepare for unexpected departures or illnesses.
Saving money
Another reason to use a contract executive is to save money if the position is on a project basis. You may need a director in charge of finding a suitable location for a branch office in Calgary, but once it’s up and running, that position is no longer needed. Instead of hiring someone full-time and then having to find work for them elsewhere when the project is done, you can pay a contract manager for the three months it takes to acquire the land.
Interim executives can also help organizations save money if they don’t have the budget or need to hire a full-time executive. They may only need someone one day a week, or even one day a month, to help strategize, plan, and set direction. Try offering that kind of work to a seasoned individual looking for a permanent job and see how far you get. Yet contract executives build their whole careers out of juggling multiple assignments for clients, and thrive on the challenge of helping guide small businesses. They are especially valuable to non-profit groups, which notoriously lack the budgets to be able to attract top-calibre professionals with business savvy.
Pitching in
You may also need help during a growth phase. With economic cycles fluctuating widely, it’s very difficult to predict staffing needs, even at the executive level. If you’re not sure how long you’ll need an executive, rather than commit to a huge severance package in the event of a layoff, a contract executive can give you the same bang for fewer bucks. Contractors can help ramp up new product lines, recruit hundreds of staff, and develop new markets in no time flat. Are you automating your customer service function because your client base is growing by leaps and bounds? Why not hire a contract information technology professional to manage that huge project? If raising venture capital gives you the chills, a contract executive can provide instant expertise.
Full-time executives can also get swamped with work to the point where they would appreciate some temporary help to take over a few of their duties, and interim executives can be a solution there, too.
Contract executives can also be brought on board to help mentor your existing executives. If the organization is not large, it may not have anyone on staff with the experience, patience, time, and knowledge to help someone grow into an executive role. Maybe your CEO is too busy to train senior managers. Or perhaps you went too far with downsizing and need to bring in some expertise to guide those managers who remain. “For a president of a company, the worst thing in life is to be alone and when we come in as a member of his team, often we become a kind of a mentor, somebody they can talk to,” says Jacques Caussignac, managing principal of the Montreal office of The Osborne Group, which lays claim to being the only firm in Canada dedicated exclusively to providing executives on a contract basis.
Start-up companies can also benefit from contract executives to help get up and running quickly and share their expertise. During the high-tech boom, when 20-somethings were the CEOs of their own firms, interim executives proved invaluable in giving business guidance and expertise.
Solving HR issues
Hiring an interim executive can also make sense if there’s a shortage of qualified candidates to work permanently. You can’t leave your head of manufacturing position open for six months; better to have a contractor in place while you take the time to search for a perfect, permanent fit.
Creating a new position on a temporary basis is also a way to avoid the morale issues that would accompany such a move if it were permanent. If your organizational structure’s highest level is a director position, and you wanted to create a vice president of finance role, it would be hard to justify doing that for one department and not others. By making it a temporary move, you can get the job done and not threaten your existing executives and senior managers.
And you can even use an interim executive to help with the hiring process to fill a full-time executive role. They can develop job criteria, evaluate candidates, and then provide orientation for that new person.
In today’s uncertain economy, more organizations are cautious about hiring permanent staff, including executives. An interim executive makes sense. If for whatever reason a contract executive doesn’t work out, you can cut them loose with a minimal amount of notice or money. Most work on a per diem rate and you pay for what you get—no performance bonuses, stock options, company cars, or severance package. They have to be productive or you’ll say goodbye. Don’t try that with a full-time executive or you’d get slapped with a six-figure wrongful dismissal suit. “When you hire somebody from the sidewalk, you have to sign a contract with him and if after one year you don’t need his services anymore, you have to respect your contract and pay out,” says Caussignac. “But with us, it’s a variable cost.”
However, if an executive knocks your socks off, in many cases you can extend an offer to permanently bring them on board if they’re willing to give up the freelance life. Now that’s the ultimate probationary period. Talk about no-risk hiring.
Interim executives can tackle assignments that others wouldn’t be interested in. “If a company has a new young president, he might need from time to time—one day a week or one day a month—somebody who will help him to run the business,” says Caussignac. “You wouldn’t be able to find anybody to accept a job like that.”
There are probably more uses for interim executives—all you have to do is ask them if they can do it. “Our imagination is really the single greatest limitation that we have,” says Ron Newnham, one of the principals in The Osborne Group’s Montreal office who contracts his services to clients.
When not to hire an interim executive
Those in the business of providing interim executives say there are few times when you would not want to do it, but there are some important considerations.
If the position is highly specialized and requires a long learning curve, there’s no sense paying someone to get up to speed and then have them leave shortly. Better to hire a permanent employee instead. Contracts are better suited to positions that are generic—such as a director of communications—or specific to an industry.
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Ron Newnham |
Even though interim executives can save you money in the short term, their per diem rates are not cost-effective if you’re looking for someone beyond a few months. “If you are convinced that the only way that your organization can be properly served is by having somebody there on a permanent, full-time basis,” then interim executives are not for you, Newnham says.
Many large organizations can find the expertise in-house among someone willing to take a short assignment to fill a gap or work on a project, Caussignac says. “In that sense, they don’t need us.”
Also, in a large organization, if someone were passed over for an executive assignment in favour of an outsider, it could hurt morale. But “in small to medium-sized companies, they are so busy that the employees will understand that for two, three, or four months it doesn’t pay to shift all the organization to fill one seat for that period of time,” Caussignac says.
It may also not be advisable to a large organization, say one that’s publicly traded, to bring in a temporary outsider for a high-profile job such as the CEO’s position unless there was a real power vacuum or crisis. Shareholders could look askance at such a move, although Newnham argues that investors could in fact applaud any effort to get good value from a contract executive.
It’s not outsourcing
Perhaps some of the stigma that may have been felt around contract executives in the past was the notion that an organization was outsourcing a core function: management. But hiring temporary executives is not outsourcing.
Outsourcing usually involves handing over holus-bolus an entire area such as payroll or facilities management to a third party firm. It’s done by firms in their own offices, with occasional meetings with their clients.
But contract executives work on site as part of your team. Often, staff can’t tell the difference between an interim executive and a permanent one. Contract executives work alongside other personnel to achieve the same goals. They sign confidentiality agreements so they won’t give away any trade secrets.
And perhaps most importantly of all, the contract executives pass on their knowledge to your staff before they leave—something that outsourcers wouldn’t necessarily do or they’d be out of work.
Contract executives are sometimes confused with consultants, but they’re different. Not to knock consultants, but they freely admit that they are usually brought in to study a problem and advise how it should be fixed—not to fix it themselves. But contract executives roll up their sleeves and do what needs to be done within their mandate.
That’s another advantage to hiring interim executives: if you don’t have in-house expertise to carry out a mission, then hiring a consultant to tell you what to do is not going to get you very far.
Interim executives are sometimes hired by organizations looking for a fresh perspective on a problem. If you hire a contract executive through a firm, chances are you can draw on the expertise of many others in the firm who have gone through a similar problem. Let’s say your potato chip sales are down 27% from last year and your director of marketing is stumped. If you hired a marketing executive on contract, he or she could call on their colleagues in the firm with marketing expertise in the food industry to get their ideas on what to do to boost sales.
The Osborne Group, for example, has roughly 75 principals in its offices across Canada. If Newnham needs to bounce an idea or problem off a colleague, “there’s a wealth of knowledge there and talent and expertise that I can tap into.”
Interim executives can also bring objectivity because they’re not steeped in office politics. “We don’t have any background with that company and we don’t have any future with that company,” says Caussignac. “The president of the company can rely on us to ask questions and get real answers that are not disguised by any background, any things you’ve done in the past with that company.”
Executive staffing firms are also not temporary agencies. “We’re not in the temp business. We’re not in the consulting business. We are in the contract executive services business. We become a part of our clients’ organization when we go in to execute a mandate,” Newnham stresses.
Interim executives not only have senior management experience, but they have experience doing it on a contract basis, and know what they can accomplish in two weeks or two months, and have a process in place for organizing their work.
How it works
Contract executives basically come from two sources: firms that specialize in executive staffing, or individuals who freelance independently—often senior managers who are retired from a company and return on a contract basis.
Choosing an executive
An executive staffing firm may send a shortlist of two or three candidates to meet with you to discuss your needs and see if there’s a cultural and personality fit, especially if the assignment will last a few months. “You’ve got a small window of opportunity to make an impact and if you get off on the wrong foot, if you’re having trouble making eye contact with each other in an initial meeting or you really don’t share the same values that the respective organization espouses, then you’re not a good fit,” Newnham says.
If the assignment is short, take the time to hire a candidate who can hit the ground running, Newnham recommends. “You don’t want to have a revolving door at your front door. You don’t want to have people coming in and out of there every week,” he says.
Check out the executives’ resumes and credentials. You should be able to veto any candidate you don’t feel would be suitable.
You can choose an executive based on their experience in a particular role (such as chief financial officer) or in your industry. Many contract executives have no fewer than 20 years of management experience and do not take assignments in an area they feel they are not qualified for.
Negotiating a contract
Most firms and individuals charge a per diem rate, which you may be able to negotiate. A typical assignment lasts from three to six months but can usually be cancelled at a moment’s notice. “We’re a variable cost for clients. When they need us, we’re there. When they don’t, we’re not, and they only pay for the service that they need,” Newnham says.
Both sides sign a contract with the chosen executive but the terms may be flexible, allowing for changes of duties or length of time as the work progresses. The client is more or less in the driver’s seat with the working relationship. “They’re not signing a blank contract that’s difficult for them to get out of,” Newnham says.
Nor do clients have to pay the headhunting fees associated with hiring a full-time executive, which can often run between 20% and 25% of the individual’s first 6 or 12 months of salary, Newnham points out.
Up and running
The executive can often start within two weeks of the initial meeting and already knows what work needs to be done. “We hit the ground running,” Newnham says. “It’s not like dealing with a traditional consulting firm, for example, where you may deal with a senior partner at the outset to negotiate a business deal with them and then find out when the time comes to execute the actual work to be done, a junior person is assigned.”
Before the executive starts, send a memo to employees to let them know what the person’s mandate and tenure will be. “That in itself is an excellent form of introduction and it also allays fears that people could have seeing somebody come in. We’re not there as hatchet people, we have a function to do,” Newnham says.
At the start of an assignment, make sure you set objectives and timelines with the executive and hold him or her accountable for it, Newnham suggests. Even though interim executives work independently, you should still monitor their progress to confirm they’re on track.
Within roughly a month, most executives are comfortable in their interim role, Newnham says.
Clients may wonder how much attention a contract executive can devote to a job if they’re only working a couple of days a week, or for a few months. But the executives themselves say the work is much more intense than in a permanent, full-time position.
“Even if it’s only one day a week, our mind always works for that customer, 7 days a week, 24 hours a day, so the client gets more than one day a week,” says Caussignac.
Laurel Hyatt is Managing Editor of Workplace Today®
By Jane Rounthwaite, Principal, The Osborne Group Print version
When executive directors and CEOs of non-profit associations leave to take on new challenges or perhaps retire after many years of service, a huge hole must be filled quickly to guarantee the health of the organization.
In many cases, there is time to manage the transition, but sometimes executive directors/CEOs leave suddenly for a variety of reasons – illness, family obligations or other personal reasons. Regardless of the why, it’s left up to the board of directors – volunteers – to figure out how to fill those shoes.
Taking the time to fill the position with the right person is a smart course of action. However, some associations may require someone to take the helm almost immediately. Sometimes a board member might be the right choice, albeit temporarily, or the organization is lucky enough that the outgoing CEO or the board, through their network of contacts, can find someone who can quickly jump in with both feet, either for the short term or long term.
However, if none of these choices are available, an association looking to fill either a CEO or senior
management role should consider an interim executive instead of risking the health of the association as
the management hole waits to be filled. Interim management involves the temporary assignment of a
seasoned executive to manage an organization through a period of transition, crisis or change.
Interim management has been a widely-used and accepted business practice in Europe and the United Kingdom for more than two decades, born out of the need and desire for companies to avoid the complicated labour laws and resulting costs of hiring and firing. Traditionally interims were used for gapmanagement, filling a vacancy on short notice due to circumstances such as promotion, restructure, resignation, peaks of activity or maternity and medical leaves.
Over time, the concept has matured and the benefits of an interim executive have moved to the forefront
of most organizations. While it’s still a relatively new concept in North America, it’s taking hold in Canada.
The world is changing rapidly through globalization, with organizations and leaders being acutely aware
of costs and the need for them to be constantly pursuing available, effective, cost containment
alternatives.
Indeed, boards of directors are finding they are under closer scrutiny than ever before, either by
shareholders or, in the case of non- profits, funding bodies and membership.
One of the major benefits of utilizing interim management is to fill management vacancies within days,
thus allowing an association to keep moving forward with ongoing strategic initiatives. Because there are
no long briefing sessions and interview processes, an experienced interim manager can be introduced
quickly, hit the ground running, be readily available and be paid a daily rate.
During the assignment of an interim manager, associates can draw on the experience to assist in the
recruitment of the full-time replacement or newly created position and smooth the transition period of the
new incumbent.
A departing executive director or CEO is not the only situation where an interim executive makes sense.
Most associations are resource-constrained and often the CEO can get bogged down in the day -to-day
operations of the organization. Consequently, they aren’t able to get to the more strategic projects that
are on a wish list or developed by the board of directors.
Since associations are generally comprised of staff devoted to administrative tasks, an interim executive
is an excellent choice for specific short term projects, such as a membership drive, a process
improvement exercise, or re-branding of the association to keep it relevant.
Whether the interim executive is brought in to temporarily fill a senior position or for a specific initiative,
they can often be a catalyst for new ideas that benefit the association, especially those looking to make a
change in direction to enhance their appeal to both existing and potential members.
In order for the interim executive approach to truly succeed, however, the association must prepare for
their arrival, much in the same way a corporation prepares for a fulltime hire to start.
First, the association should build parameters around the interim executive’s mandate by ensuring the
role is defined and what is expected by establishing benchmarks to evaluate the performance. This needs
to be clearly communicated to interim executive.
Second, more than one person should be involved in the interview process, as the interim executive
needs to deal with different parts of the organization and in order to truly hit the ground running, they must
build relationships quickly, whether it’s with the board of directors, administration staff or volunteers.
Third, the association should communicate to staff, the board, and senior volunteers the arrival of the
interim executive, the reason why, their experience and what they are expected to help the organization
with (if it’s not to fill the CEO/executive director role).
Aside from doing the defined job, the interim executive gets to observe the association from within and
can often provide valuable insight and advice to the board of directors. Additionally, they usually have an
extensive network of other experienced professionals that can assist and advise in a wide variety of areas
if required.
There are a few other things that should be considered and in some cases are more relevant to non-profit associations than corporate enterprises:
· An interim executive director/CEO should be exactly that: interim and not a candidate for the fulltime
job. This keeps them clear of politics while a long term candidate is found, either by the
board of directors and / or the outgoing executive director. This also allows them to take an
objective view of the organization and act as a coach to the board, staff and volunteers.
· If you’re drawing on an interim executive who has a corporate background, be sure they
understand the budget constraints that are the reality for non-profit associations – it’s often similar
to the world of SMBs.
· Talent drawn from a corporate background – or even a government agency background – should
have experience working with a variety of stakeholders including volunteers and members as well
as some exposure with the not-for-profit mentality.
· If it’s for a project rather than filling a senior role, make sure they have specific experience for the
task at hand and be sure to manage them as a finite resource – you don’t want them getting
bogged down in the day-to-day operations.
· Finally, it’s important to point out the difference between an interim executive and a consultant. The latter
can be brought in – usually at a premium price – to investigate, analyze and make recommendations, but
often they’re not the one who will make the changes.
An interim executive takes a hands-on approach, whether it’s as the executive director or a project manager, evaluating and implementing as they go. They can also be brought back at a later date for new projects and as a result, they already understand the nature of the association and can quickly add significant value during the return engagement.
By Jane Rounthwaite, Principal, The Osborne Group
By Ken Goodwin and Jane Matthews Print Version (PDF)
THE ROLE OF Chief Financial Officer is no longer a luxury that only large corporations can afford. Smaller mid-market companies are now finding they require the expertise of someone with big-company experience. The challenge is hiring one at an affordable cost.
It’s not something mid-market or smaller firms can afford to ignore. Today, the CFO is no longer relegated to a silo of balance sheets and numbers. The CFO plays a strategic role in all operational elements of a large organization. Without a FO, mid-market and small companies are at a competitive disadvantage. They might be meeting their bookkeeping needs without one, but the global nature of business makes a CFO with strategic financial insight a must. This is especially true when companies deal with current and potential investors and with financial institutions and regulatory bodies.
Key functions such as development, sales, marketing, IT and service delivery don’t just require a budget, they also require smart planning to allocated funding strategically to support the overall success of a company. A middle management accountant, no matter how skilled at managing and balancing the books, cannot provide that level of insight and expertise.
In addition, if a mid-sized company’s president or CEO (often an owner or co-owner of the business) tries to fill the shoes of a CFO, the task may distract him or her from other critical duties.
Smaller organizations may not have a budget to hire a seasoned CFO. But they can tap the talent pool cost-effectively in other ways.
Some organizations turn to consultants, with mixed results. Consultants can identify problem areas and prescribe a course of action. But a CFO adds real value in the execution of a strategy, a time-consuming task that makes a consultant’s fees prohibitive.
A better choice is an interim executive. A company may not have enough work to keep a CFO busy full-time. But the nature of the part-time work may require executive-level expertise. A seasoned interim professional with relevant experience can help the organization grow until it can justify the cost of a full-time executive. The organization gets the highest level of expertise but only for the time required
Companies in Europe and the UK have used interim management for more than two decades as a way to avoid the complicated labour laws affecting hiring and firing. They used interims initially for gap-management, filling a vacancy on short notice after sudden surges in activity or a promotion, restructuring, resignation or maternity and medical leave. Now, smaller companies use interims as a matter of course.
Still relatively new in North America, the concept is becoming more familiar in Canada. With the emphasis on cost containment in a global environment, public, private and non-profit organizations have to respond effectively to the demands of their stakeholders or risk failure.
Organizations that need CFO’s expertise but can’t afford to hire one full-time might consider leasing an executive for a defined period to implement changes, fill unexpected gaps in the company or manage a critical initiative. The founders of young and growing technology companies, for example, often try to do too much on their own. Yet a seasoned professional can often help them to address financial issues such as financing or pricing so that they can put their own time to better use.
During the assignment, an interim CFO can help a company in recruiting and selecting a full-time replacement, then smooth the transition period and provide management as the new executive fills the position.
In the meantime, the interim executive can provide advice and support to the company’s CEO, who often becomes isolated in a mid-market business. Aside from doing the defined job, the interim CFO can observe the organization from within and provide valuable insight and advice to the CEO.
From capitalization and service agreements to pricing models and market expansion, an experienced executive can often contribute proven solutions and clarify priorities and challenges. He or she can also tap into an extensive network of other experienced professionals for assistance and advice.
Ken Goodwin & Jane Matthews are senior principals in Ontario with The Osborne Group (www.osborne-group.com)
By Frank Luba, The Province Print Version (PDF) Published October 18, 2007
Vancouver contract-management professional and developer John Cowan doesn't plan to retire at 65 so he can spend time gardening.
"I couldn't think of anything more disgusting, to be honest with you," says Cowan, who is 51 and in the middle of that group known as baby boomers --those born between 1946 and 1964.
A report released today by BMO Financial Group indicates that, like Cowan, many boomers expect to keep working when they hit retirement age.
The conclusion comes from an Ipsos Reid survey of boomers who have either retired early to start their own businesses or plan to do so.
Fifteen per cent of the survey group even say they intend to keep operating their businesses until they die. They're not going to be coasting, either, the study says. Some 12 per cent indicate they are or will be working more than 40 hours a week, although 44 per cent are or plan to spend between 26 and 40 hours a week at work. Cowan decided to become an entrepreneur two years ago, when the forestry company for which he was a senior manager was bought.
"I viewed it as an opportunity to pursue, with some risk, some interests that I'd had for some time," he says.
Cowan, a principal in the Osborne Group and owner of Decourcy Management, can't imagine retiring. "I would be bored. I need something to do. I have energy that has to be released on an ongoing basis."
Judy Brooks is 43 and at the youngest end of the boomer curve. But her latest venture, Blo, is her second business after her partnership in Proactive Resolutions, a conflict-management company. Blo, in trendy Yaletown, isn't a hair salon but a "blow-dry bar." "All we do is wash, blow and go," says Brooks.
She's not surprised some boomers aren't going gently into that good night of retirement.
"People of our age category are different than my parents were when they were in their 50s and 60s," she says. "I think we feel differently. "All my 50- and 60-year-old friends still think they're 40," she says.
"If they're guys, they think they're 20."
That enthusiasm is valuable for an entrepreneur. "We have enough youth and passion to drive businesses and lead people," says Brooks. "When you balance that with a little bit of experience and wisdom, then it becomes pretty powerful."
Frank Luba is a writer for The Province. He can be reached at fluba@png.canwest.com
By Ken Goodwin and Jane Matthews Print Version
No company is immune to executive churn, even those that make best efforts to retain and reward top talent. Unexpected events in a person’s life can force them to leave a great job with a great company with almost no notice, leaving the organization with a management void to fill.
While bigger firms may be able to rearrange a larger executive team to fill the gap, most companies can find themselves missing key expertise that must be filled more quickly than an executive search process allows.
Instead of risking the health of the business as the management hole is waiting to be filled, companies should consider interim executive management as an effective short-term solution.
Interim management involves the temporary assignment of a seasoned executive to manage through a period of transition, crisis or change within a business. There are a number of different situations that can create a need for an interim manager: crisis management, sudden departure, extended leaves, managing change or transition, MBOs and IPOs, mergers and acquisitions, and project management.
This approach has been a widely used and accepted business practice in Europe and the U.K. for more than two decades, born of a need and desire for companies to avoid the complicated labour laws and resulting costs of hiring and firing. Traditionally, interims were used for gap management — filling a vacancy on short notice due to circumstances such as promotion, restructure, resignation, peaks of activity or maternity and medical leaves.
Over time, the concept has matured and the benefits of an interim executive have moved to the forefront of most businesses. While it’s still a relatively new concept in North America, it’s gradually taking hold in Canada.
One of the major benefits of using interim management is to fill management vacancies within days, thus allowing the business to move forward. Because there are no long briefing sessions and interview processes, an experienced interim manager can hit the ground running, be readily available, be paid a daily rate, and introduced quickly.
During the assignment of an interim manager, companies can draw on their experience to assist in the recruitment of the full-time replacement or newly created position, smooth the transition period of the new incumbent and provide support for management.
One role that can be the most critical for all companies is that of Chief Financial Officer. It is no longer a luxury for only large corporations; small and mid-market companies are now finding they require the expertise of someone with big company experience. The challenge is being able to afford to hire one.
Today, the CFO isn’t relegated to a silo of balance sheets and numbers. If they are taking their rightful strategic role in all operational elements of large organizations, mid-market and small companies are at a competitive disadvantage. Even if their bookkeeping needs are being met, the global nature of business makes a CFO with strategic financial insight a must. Key functions such as development, sales, marketing, IT and service delivery don’t just require a budget, but also smart planning of how these funds should be allocated and how they contribute to
the overall success of a company. A middle management accountant, no matter how skilled at managing and balancing the books, cannot provide that level of insight and expertise.
In addition, if the president or CEO (often an owner or co-owner of the business) tries to fill the shoes of a CFO, it often distracts them from other critical duties. Mid-market and small companies must address this management gap because often they may be competing with large, global companies in their respective markets and are expected to be just as sophisticated. This is especially true when dealing with current and potential investors and other financial institutions such as regulatory bodies and banks.
While some organizations turn to consultants, the results are sometimes mixed. Consultants are effective at identifying problem areas and prescribing a course of action, but lasting benefits come through execution, and hiring consultants for execution can be cost prohibitive for some organizations.
An interim executive that is brought in as part of the executive team provides a hands-on approach and can start solving problems as soon as they are identified, rather than taking the “analyze everything first then execute” approach.
Another side benefit of hiring a seasoned interim executive is the organization is getting an experienced advisor. The life of a CEO in a smaller, mid-market business can be lonely. While a board of directors or advisory board provides much needed support on driving the business forward, any mentoring or coaching tends to be reactive and based on a view from outside.
Aside from doing the defined job, the interim executive gets to observe the organization from within and can often provide valuable insight and advice to the CEO. Whether struggling with issues around capitalization, service agreements, pricing models or new market expansion, an executive who has “experienced it all” can bring proven solutions to the table and offer clarity on priorities and challenges. Additionally, they usually have an extensive network of other experienced professionals that can assist and advise in a wide variety of areas.
For the interim executive approach to truly succeed, however, the organization must prepare for their arrival, much in the same way a company prepares for a full-time hire to start.
First, the company builds parameters around the interim executive’s mandate by ensuring the role is defined and what is expected by establishing benchmarks to evaluate the performance. This needs to be clearly communicated to the interim executive.
Second, it’s beneficial to involve more than one person in the interview process in order to ensure the right fit for the organization. As well, this quickly establishes some key relationships which help the interim start contributing from day one.
Third, the business should communicate to staff the arrival of the interim executive, the reasons why they are coming onboard, their background and experience, what they are expected to help the company with, and the expected length of the engagement.
And finally, (and believe it or not, this can be forgotten) the company should work out logistics of where the person will work and how they will operate, including basic items such as security access, an office, a desk, a phone, and a computer or an e-mail address.
Any firm that sees a gap in its executive set should look to an interim management model as an affordable, if temporary option, to meet short-term business needs.
Ken Goodwin and Jane Matthews are senior principals with The Osborne Group.
By Joe Castaldo Print Version
Pat Loduca found himself so caught up in running the day-to-day operations of Upper Lakes Group earlier this year that the CEO realized he wasn’t thinking about growing his Toronto-based business.
And his 10-member management team was just as swamped. But something had to be done to keep the marine shipping company competitive. “We really needed to step back and focus on where we wanted to take the company,” Loduca says. Hiring another full-time executive would have been a lengthy process, so Loduca turned to The Osborne Group, an interim executive management agency headquartered in Toronto, and essentially rented one.
Using temporary management can be ideal for cash-strapped companies that need to tap into the expertise of a seasoned executive but can’t justify hiring one fulltime. In Loduca’s case, he hired a vise-president of strategic planning to restructure the company’s various business groups and identify long-term opportunities for each, a process that four months later is still ongoing. Interim managers are more typically called upon for smaller projects.
That was the case for Jamie Cuthbert, president of graphic design firm and sign manufacturer Saitech International, when he landed an order in July to build touchscreen kiosks for 2,000 auto repair shops across the U.S. The task was too much for his company to deal with, so Cuthbert hired an executive from Atticus Interim Management in Toronto to lead Saitech through the assignment’s technical and quality control aspects.
Once completed, Cuthbert says his company will be better equipped to tackle larger projects. “It’s been very good at providing us with skills we can use over and over,” he says. The concept of interim management flourished during the 1980s in the U.K., when then-prime minister Margaret Thatcher privatized governmentowned companies, creating a need for experienced managers, but it isn’t as common here in Canada.
“Many times we’ll go into a business and they ask us, ‘Where were you three years ago? We could have used you,” says Jane Matthews, an executive at The Osborne Group. She expects the popularity of interim managers to grow, given the number of small to mid-sized businesses in Canada and the high demand for skilled leaders.
Such services don’t come cheap, however. Corporate clients should expect to pay between $1,200 and $2,000 per day for an executive. At that price, clients should be sure to assess the quality of potential managers, Greg Petkovich, president of Atticus, also stresses that temporary executives are not meant to replace consultants.
Still, Cuthbert, for one, says an interim manager is a better solution for his money. “Consultants are of little help to entrepreneurial companies that are running flat out,” he says. “We don’t need more people telling us what to do.”
By Joe Castaldo
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