When an executive, head of HR, owner, or investor calls us, it’s because the organization is in motion and leadership to drive growth, change, or turnaround is needed…fast.
If you are tasked with bringing in an interim, you’ve probably done your research and read what a true interim executive is, how interims are different from consultants, and how an interim gets compensated.
But still – is this the right move for you and your company? Let’s explore:
Corporations know that innovation is key to their continued growth, but what happens when serious product or service reengineering is not within the organization’s DNA? What if the company is just too successful or set in their traditional world?
That is exactly what happened when a multi-billion dollar construction company came to us with a software division they had launched internally. While the company was superb at architecting, planning, engineering and building major construction projects, developing software was a new ball game.
Companies that have sought out true interims will tell you that during initial conversations, the executive interviewed the company as much as the company interviewed the executive. Having jumped into everything from manufacturing to healthcare, to AI, interims are choosy about the assignments they take on. They are not shy about a challenge, but want to have major impact. The best interim execs have a finely honed internal screening check-list to decide what’s best to parachute into.
Cleve Adams is no stranger to high growth situations, having built a SaaS cyber security software company from pre-revenue to a $1B IPO in three years. As an interim exec and four-time VC-backed CEO, Cleve says there are four vital components to evaluating a company.
When I started my first company at age 26, I’ll admit, it was lonely. Even though we were only a team of six, there was a clear dividing line between me as founder and CEO, and my staff.
I learned how to pull in expert help, but I had a lingering feeling over the years that I took the business more seriously than anyone else on the team. Especially cash flow. And making payroll. Eventually I built a successful company, but not until hitting every pothole I could find. Hindsight is 20-20, but an executive-level leader alongside me would have spared so much pain.
This was my driving force to becoming an interim executive myself. Helping owners and founders to get over hurdles that, left to their own devices, would take years to master, and in many cases skills they didn’t otherwise need or enjoy. I focused on high growth tech companies, getting them to market and eventually for M&A events that would bring extraordinary returns to investors.
This is still what drives us today at InterimExecs: to empower companies to reach their full potential by building world-class leadership. Whatever it takes to accomplish projects, goals, growth initiatives, or in some cases fixing what’s broken.
What do you do when your fund does a great job buying 5 divisions of a big publishing company spinning off assets, only to find one of the divisions starts going sideways?
First, you give the division some time to right the ship on their own.
Unfortunately, for one multi-billion dollar private equity fund, this strategy didn’t work… and the fund gave the CEO four years to get it right.
That’s a lot of patience.
Eventually, it came time to make a change, which the managing partner was dreading.
The project-based executive, also known as an interim executive has been around for 30+ years, having originated in the Netherlands, later expanding to the UK, the rest of Europe and finally reaching America around 2000.
The early model for interim engagements was invariably focused on turnaround and distress situations: an organization in pain would eventually decide they couldn’t solve the problem on their own, and would seek an outside resource, often through executive search firms, where the executive was never a permanent employee.
Interims have played a part since the early days of private equity funds, where fund managers would use executive search services as part and parcel of their post-acquisition ownership strategy. A fund would see big potential in a struggling company, and would realize big returns by bringing in an outside executive to turn the company around. Thus the early version of interim – interim 1.0 – was all about fixing what was broken.
The next phase in interim executive deployment launched in the US, arguably emerging out of the tech community.
Many owners and boards are new to the game of hiring an executive specializing in interim management.
As the gig economy has gained momentum, more companies are drawing on executive level resources for specific growth initiatives or to help troubleshoot inefficiencies or problems. Interims come in on a project basis as contractors, therefore not adding to permanent overhead.
Because the majority of companies have never written a contract for an interim, they draw on what they know – the playbook for searching and hiring a full-time exec.
Yet, interim management and permanent employment are two different worlds.
Private equity funds or venture capital funds get one use of their dollar. Just one. Fund managers have a sacred charge of evaluating opportunities and investing the funds they’ve been entrusted with by their limited partners in hopes of maximum returns.
We view deploying executives into companies in a similar way: we get one chance to make a great match, one chance to deploy the executive to best advantage. Like finding a great investment opportunity, deploying interims is a timing game. We must catch an executive during the brief period of time they are in between assignments assessing the next opportunity they want to take on.
So how do we best deploy genius leadership when we only get one chance every day to maximize everyone’s time, unique skillset and results? We start by being selective about the clients we work with.
The concept of an Interim Executive Director (ED) isn’t well known in the nonprofit arena…yet. But, it’s becoming more mainstream and for many good business reasons.
Did you know? On average, it takes a Board of Directors 9 months to recruit a new Executive Director. By the time they are on-boarded and contributing, a year may have passed since the departure of their prior leader. While Board members may step up to “mind the gap”, the truth is that employees, partners and funders can lose confidence in your organization during this leadership transition and key employees may leave. Just organizing payroll, developing a budget and/or supervising the employees may keep the lights on, but without professional leadership, your organization can be harmed and stymied while the Board should be focused on finding your next leader.
Interim, acting, project, contract, fractional. The array of titles can make your head spin, but they all point to a specialized type of executive that companies call on when they are going through transformation. So let’s break it down:
Interim Executive: Interim executives typically engage for 1 month to 2 years. This title can cover a lot of use cases, but in all cases, the company needs some kind of change or upgrade. The organization may have a leadership gap. Maybe they are not sure if they are on the right track, and they need an executive to create an operational roadmap and then execute and implement to ramp up growth. Maybe its technology or security issues; or an effective leader to reposition the company, update brand and build out a best-practices sales team to bring them into the new digital era. In all cases, executives across the C-suite can be drawn on for these types of assignments: CEO, CFO, COO, CIO, CMO, CSO.
Acting Executive: Acting executive is another word for interim, though typically points to a time frame where an executive is stepping into a role for a short time while the permanent search takes place.