Tapping Temporary Talent

Interim executives can hit the ground running on short notice. For small and medium-sized businesses, this can create substantial opportunities

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.

An international trend

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.

The CFO: a mid-market gap

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.

In-house advice.

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.

Prepping the organization

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.