CXO Magazine
Source: CXO Magazine
Date: May 2006
Page: 46

article: “How the effective use of an interim leader could prove to be a business’ trump card.”

Today, the need to recruit and hold on to qualified, multi-skilled and experienced staff is high on every organisation’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 in the UK and across Europe 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 globalisation, 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 organisation can get a 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. Mark Palios, former Chief Executive of the Football Association is a case in point. He is now employed on short-term contracts, providing interim leadership for organisations with a vacant top job. There are many other 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 in America 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. Clients do not pay for NI, holiday pay, pensions or time off, so interims are a clearly budgeted resource with no hidden extras.”

Christine De Largy, Director of Impact Executives – a source for companies recruiting interim managers – says the use of temporary professionals can mean that bosses 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. 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 organisations 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 organisations 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 on 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 organisation 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 also accustomed to working 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 because you have got 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 learners, 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 projects. Some jobs can be as short as one day, while others may last up to two years. This 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 UK£700-1500 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 spee 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 organisation, 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 organisations start to realise 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.

Perspectives

Peter Cutler, a supply chain specialist, has spent the last eight years working as an interim manager and says the rewards are there but he would never gladly recommend the role to anyone thinking of taking the plunge.

“It offers variety, diversity, the ability to go in and make a difference, and constant new challenges. I enjoy the work; some assignments are more enjoyable than others, but I’ve never given up on one yet, nor have I let down a client. The biggest challenges are getting up to speed with the business jargon, the people and procedures – and, of course, getting a feeling for the politics and the culture of an organisation. I’ve never had a problem with staff being suspicious of my motives in going into an organisation. I’m always upfront about what I’m trying to achieve and why I’m there.

Upsides

“One pro to being an interim is the variety. You are also able to rise above company politics and because the client is paying for your services, you tend to get listened to. It can be financially rewarding – although this will depend on continuity of employment. It’s all very well quoting a good daily rate but if you are only working 50-60 days a year, it doesn’t work out at very much. The skill is in maintaining enough working days in a year to be able to tide you over the lean-periods when there is no work. All my income goes into a company account and I draw a monthly salary so I get continuity of income – as long as the company funds are there!

Downsides

“The cons of being an interim are the work-gaps and you have to work hard to minimise them, but when you are on assignment you often don’t get so much time to maintain your marketing and networking. On average I work about nine months of each year and I get paid reasonably well for that – but it is a solitary lifestyle and it doesn’t suit everyone. The other thing to remember is if you stop working you stop getting paid – so you have to maintain that financial reserve. My career has given me a certain amount of additional freedom but I’m not yet in a position where I can retire – not with school fees to pay.

Advice

“My advice to a manager in full-time employment would be to stay in full-time employment! Interim management is not an easy life. It is full of uncertainties and while you may think it sounds great - some of the time it is and some of the time it isn’t. It took my wife several years to get used to the idea that there was no regular monthly pay-cheque – and when I had been several months without work we would cut back on all outgoings and then breathe a sigh of relief when the next assignment came along I went into Interim because I was made redundant from my last corporate job - that was the push that I needed and fortunately it suits me and I enjoy it. It was Dr Samuel Johnson who once said something to the effect that, ‘he is no wise man who will quit a certainty for an uncertainty’”.

Perspectives

Gail Bell, Managing Director of Interim Performers – an interim manager recruitment provider – says the industry is attracting some top professionals despite inevitable barren spells that come with the job.

“The logic seems simple – your business is confronted with a project, issue or opportunity, but there is a lack of expertise to tackle it internally and it isn’t a long term requirement anyway. Bringing in someone with a proven track record of successfully delivering similar projects, who can work to an agreed timeframe and budget and isn’t beholden to a large consulting firm or on a lengthy notice period, is an appealing option to many. With over 10,000 practitioners in the market, interim management is one of the fastest growing sectors in recruitment today. The interim market is becoming more popular among candidates in their late 30’s as a more challenging and rewarding career option.

The role

“Interim Management can offer a senior executive benefits such as flexible working hours, a variety of experiences and challenges, increased job satisfaction, as well as the ability to focus on achieving results in order to leave a legacy. Interim Management is an ideal, flexible career option whilst retaining good earnings and a place on their professional career ladder. There are also practical considerations that a senior executive should consider such as, will they be a limited company or self-employed and what employment or company legislation will they need to comply with. An Interim would also need to consider how they will manage their finances and ensure they have Professional Indemnity Insurance.

On your own

“Working independently can be a lonely experience to new or inexperienced interim managers, but most find the freedom from office politics a refreshing change once they get started. This independence or neutrality can be the key to success in delivering change in, for example, a post acquisition environment, where there is often an element of mistrust amongst the workforce of the acquired company. The short-term and unpredictable nature of interim management as a career clearly means it’s not for everyone. Not knowing where your next assignment is going to come from, or be based, usually doesn’t go hand-in-hand with a massive mortgage and a young family.”

To read the entire article, click here:
http://www.cxo.eu.com/pastissue/article.asp?art=26647&i
ssue=162