Into the breach

Interim managers can be perceived as a quick fix solution to plug a staffing gap. However, if utilized properly, they can provide real leadership benefits and cost savings too. Julian Rogers looks at how the effective use of an interim leader could prove to be a business’ trump card…

oday, the need to recruit and hold on to qualified, multi-skilled and experienced staff is high on every organization’s agenda. But despite the kudos and attractive packages linked with many top jobs, many executives are jumping ship from secure positions to take the plunge into the unpredictable world of interim management. The rise of this new form of adaptable business leader has been driven by a demand to deliver fast and effective business solutions. Some may be hired to oversee a short-term project of fill a key position, while others are taken on to offer short-term leadership in order to turn around a company’s fortunes.

Indeed, in the fast-paced world of business today, interim managers are proving a valuable resource that companies can dip into when the time calls. “Increasingly, businesses are using interim management as an important element of their strategic management resources to meet corporate goals,” explains Nick Robeson, Chairman of the Interim Management Association. “Businesses are becoming much more flexible as they respond to the challenges of globalization, sector consolidation, technology and more dynamic change in all market sectors. Interim managers provide the ideal flexible resource that can be used both strategically and tactically to manage major projects of all kinds. Interim managers are also very good at change management, so they are perfect for the current environment.”

The company bosses that hire interims find in the long run that they save money. They don’t have to shell out for holiday or sick pay, make pension contributions, nor do they have the hidden costs associated with employing a full-time employee. When the interim’s contract is up, both sides can simply part company. For a one-off fee, an organization can get the job done without all the issues associated with recruiting and managing a full-time member of staff.

As well as managers, interim CEOs who possess the ability to quickly establish objectives and strategies before steering the company forward are becoming highly sought after within business. Top executives get a buzz out of stepping into vacant positions and transforming a firm’s performance; indeed, there are many C-level executives who prefer to operate on an interim basis, although eyebrows have been raised over the wages on offer. Hewlett Packard hit the headlines last year when it was revealed that its CFO Robert Wayman was paid US$3 million for just 57 days work when he was appointed interim CEO following Carly Fiorina’s sudden departure. To pay an executive US$53,000 a day may seem excessive, but the case highlights the high regard in which interims are held – especially when it comes to the top job.

But while this case is unique, the cost of paying an interim is a budgeted cost without any hidden extras, says Robeson. “Companies see this as a good value investment that pays off handsomely in terms of positive outcomes and improvements to the bottom line. Compared to the costs of management consultants, interims represent a really good deal, providing senior ‘hands on’ delivery and successful outcomes.”

Christine De Largy, Director of Impact Executives – a source for companies recruiting interim managers – says the use of temporary professionals can mean that companies witness real savings in their budgets. “Our research shows that using an interim provides cost savings of up to 42 percent over a permanent manager,” she reveals. “As more businesses use project methodology and businesses become more complex, interim managers are able to provide the best solution, with the senior authority and expertise necessary to see projects through – bringing relevant business experience that companies aren’t easily able to access, and supporting the internal team in acquiring new skills.”

But while the industry is blossoming, many firms still often confuse the role of interim manager with that of management consultant. While a consultant makes recommendations to the management board of a company about objectives and strategies, an interim is employed on a short-term contract and required to deliver hands-on results. This blurring of the jobs, and the perception that interims are only hired to plug gaps with a company’s staff, prevents many organizations from seeing the real benefits that they can offer.

The Institute of Interim Management – a professional and independent body that represents the interests of interims – says that organizations should look at the appointment of an interim as a positive move. Deputy Chairman Bob Chambers says: “Rather than seeing it as something that they are forced into on the back foot because of a business management crisis, they should look at interims as a strategic resource for specific situations that do often occur, like restructuring, new venture launches or some kind of process change. In terms of the benefits, an organization that looks on interims as a strategic resource is likely to get the most benefit from using them.”

Chambers argues that an interim also has the experience and knowledge to handle difficult situations. “Interims are accustomed to working in a very turbulent environment, so coming into a problem situation or crisis is something that is not unusual to them,” he says. ‘Typically, they are quite hands-on and implementation-orientated. Interims tend to bring a lot of experience because they are normally well advanced on the career ladder and they have probably made a conscious choice to work independently in the interim environment. Another key characteristic is that they are very adaptable and quick learners – you have got to be able to assess a situation quickly and make the right decisions as to how you are going to structure a approach. You need to be adaptable to different environments and corporate cultures.”

Although flexibility and a sense of freedom come with being an interim professional, this choice of career is not for everyone. Interims are a unique breed, needing to be quick thinking, independent and able to adapt to a variety of working environments and company cultures. Contracts typically last between three and nine months but this can vary wildly depending on the industry and the scale of the projects. Some jobs can be as short as one day, while others may last up to two years. The volatile nature of the work means that its does not always suit everyone’s tastes, especially with demanding and results-driven workloads needing to be delivered within a specific timeframe. As well as this, interims have to ensure they can survive the lean periods when they are out of work – a daunting prospect for those with mortgages and families to support.

As well as being able to balance their finances, interim managers need to be a small business encapsulated into one person. Being self-employed, they need to promote their services to prospective employers, balance their accounts, manage tax and National Insurance contributions and, of course, put their skills into good use when in work. Although this can appear time-consuming and fraught with complexities, many feel that the benefits far outweigh the negative aspects of the role. Interims are able to pick and choose their work, while at the same time being able to dedicate more time to their families or hobbies. To add to this, the pay will keep the bank manager happy. Being employed on short to medium-term contracts, professional interims can command fees of between US$1300-2800 a day, depending upon the seniority of the role and their area of expertise. This all might sound too good to resist, but Robeson offers these words of caution. “When you operate as an interim, you are really running your own business, responsible for paying your own tax and national insurance, and your income may not be as regular or predictable as in permanent employment. You need the confidence to manage your career in this way and it’s not for everyone.

“Any executive considering a switch to interim management should be sure that they are opting for a career, not just a temporary stop gap in between permanent jobs. Really successful interims have made a conscious choice that this is the route for them and they are dedicated to working on projects on a fixed-term basis. Most assignments are by their nature very demanding as clients want to see early results and often call in interims to handle difficult challenges, which may be beyond the scope and capacity of their in-house teams.” Because interim managers are operating on their own, running their own business and having to pay their own tax, they can demand these high day rates.

Chambers agrees, and says a senior executive or manager should think long and hard before turning their backs on the security and regular income of a permanent position. “The first thing they need to ask themselves is whether they can work successfully and comfortably outside of the corporate comfort zone. They have got to be confident and competent in their own abilities, not just in their own profession, but in the wider sense of running an independent business. They have to be self-motivated and self-starters and be able to cope with the wider business demands of running the financial aspects of your own business. They have got to be adaptable and comfortable going into a new and strange and possibly hostile environments and get up to speed to deliver results on time.”

One professional to make the switch to interim management is Terry Donovan, currently CEO of a vehicle telematics company. Donovan, who has five years of interim executive experience under his belt, feels that the work is much more exciting and satisfying than a permanent role. “For me, being an executive isn’t really about freedom, it’s about the buzz of a new challenge. CEOs need to refresh themselves and experience different challenges. Being an interim offers that opportunity. It’s exciting, and the reward is in going into an organization, getting the support of the team and helping them to achieve success. To start out with a difficult position and turn it around is incredibly satisfying.” Some interims receive hostile receptions from staff when they arrive at a firm. Others face dealing with office politics or adjusting to differing, and sometimes difficult, working conditions. Donovan says interims need to be mentally tough to deal with inevitable challenges. “They need quite a strong independent streak and self-sufficiency. The environment of an interim placement can be rife with politics, and so proven ability, an element of toughness and a great deal of self-belief are vital for gaining respect.”

Donovan continues: “In turnaround situations, interim executives, or those with interim experience, are incredibly valuable because they’ve seen it all before. Having experienced the situation before and proven the ability to turn a loss-making business into a profitable one, they make fewer mistakes.”

Many interims tend to operate in niche markets where they possess a comprehensive knowledge of the industry. Despite this, the average age of the interim is falling. Many are now in their late thirties – a stage in their careers where they feel they have the skills and experience to go it alone. With demand soaring and people becoming disillusioned with working their way up the career ladder within a company, the life of an interim appears extremely appealing. In fact, this career choice is one of the fastest growing recruitment areas around.

De Largy says that flexibility is the key for many of her interim clients. “Most interim managers find that a key advantage to interim working is the flexibility it offers. The downside of this, of course, is that one is only paid for days worked so when they’re not on assignment the pressure is on to win the next piece of work. As interims typically work on six-month assignments within a wide range of businesses, variety for many is a key driver.”

Clearly, the interim management market is going from strength to strength. It can provide managers to deliver specific results or time-sensitive projects, as well as fill vacant C-level executive and managerial positions. By paying these professionals a budgeted fee, the whole process does exactly what it says on the tin. And with more and more professionals opting to become self-employed in their field, the industry is set to soar over the next few years. Robeson says: “I think there will be a steady rise in the use of interims as more and more organizations start to realize the benefits of using this flexible and high-powered resource. Many companies have basically ‘mainstreamed’ interims as part of their operating policy and this trend will increase as companies get more sophisticated in their use.” The experts agree that interims need to be business savvy to make it work and be able to cope with ups and downs that come with the role. But for some, this nomadic and unpredictable lifestyle is right up their street.

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