As the workforce becomes less entrenched in long-term positions, and corporations struggle to remain competitive, the field of interim management is exploding. Human Capital explores the options
Organisations used to look at interim managers as temporary employees filling a gap due to an organisational or succession failure, but this image of interim managers is changing and is no longer an accurate description of this billion dollar business sector. Although a third of these managers will provide gap management services, the majority of interim managers provide program and project management for special corporate projects. Over the last decade, interim managers have gained the respect of many business sectors and have shown corporations the advantages of hiring interim managers as strategic tools instead of just corporate tourniquets.
Business relies on interim managers
While interim management has been gaining traction in Australian businesses over the past 10-15 years, Greg Rich, director of local specialists Hamilton Rich, acknowledges that the practice of hiring interim managers has yet to fully take off here. He notes that the UK and Europe lead the way.
"I do see this gaining popularity here in Australia," he says. "Businesses are perhaps seeing a light at the end of the tunnel when it comes to the economic downturn. They are becoming more positive about the economy, but until things really pick up, the interim path is a way that organisations can bring in skilled resources without overcommitting to help them achieve their objectives."
According to the UK's Interim Management Association (IMA), the use of interim managers continues to increase, with a third of interim managers working in banking. Although banking finds interim management advantageous, so does retail and manufacturing. Other sectors showing an interest in this field include tourism, leisure and hotels, engineering and electronics, and media. These sectors are just realising the advantages of interim management and have started utilising this resource to increase their competitive edge.
Paul Botting of IMA believes "much of the focus is now on change management. It means interim executives are going into major private and public sector organisations, often in leadership roles, to introduce and lead business critical changes and improvements."
Time for a change
Although, intellectually, companies know they need to bring in changes to stay ahead of the curve, many companies struggle with the reality of implementing change. Mary Ann North, CEO of US-based Posada Consulting warns, "don't wait until there's trouble. Progressive organisations look forward and small steps don't always get you where you need to be. Real change is hard, and an interim manager is able to come into an organisation and pull off the band-aid. "
Bringing in such a person is a serious alternative to retaining a consultancy company. While a consultancy company may suggest changes, an interim manager will make the suggestions, implement the suggestions and ensure that the systems are working properly.
"An interim manager - as opposed to a consultant - is generally more willing to transfer knowledge," says Rich. "A consultant is likely to come in and say 'this is what you need and this is what we'll deliver', and then back themselves into the organisation and make you reliant on them. They have a lot of intellectual property but they may not be willing to share it. An interim manager has nothing to lose - they want to share their knowledge."
In some cases, companies may know what they would like to achieve but do not possess the relevant knowledge or skills to achieve their goals, and an interim manager is able to step in and assist the company achieve positive results. Some areas where interim managers have excelled include managing outsourcing and extending shared services. They excel at facilitating and leading the restructuring of an organisation, and implementing new technologies, risk and regulatory systems.
Although interim managers excel at implementing change, they also work well in the areas of gap management. Corporations may look to an interim manager as a way to keep an organisation running smoothly when there is an unexpected or temporary vacancy in management. Although companies may look to such people when they need someone due to promotions, restructuring, maternity leave, health related absences or resignations, North does not believe that this type of employee should be considered an interim manager. "The field of interim management is fairly new and evolving. The managers who go in and work on a temporary basis to fill a gap in management aren't there to implement changes; they're there only to keep the status quo and shouldn't be considered interim."
A workable situation
Interim managers are not long-term employees. According to the IMA, the average length of an assignment is 137 days. North agrees that most projects should not be longer than six months. "I try to keep the project within a six-month timeframe. I sit down with the company and create a cut-off date for the consulting phase in which we analyse the situation, present our information to the board, and spend time receiving comments and vetting it." It is extremely important to set a date to end the consulting phase so that implementation and monitoring can be completed within the optimal six-month period.
Once the interim manager is hired, it is important that a steering committee or advisory board is in place to work with the interim manager. "I always have an inner circle," comments North.
"Once I have a committee in place, I'll make sure that everyone is in agreement. If I hear someone say that a change won't happen in the company, I bring this to the attention of the committee and if everyone agrees because the issue is a 'sacred cow' then I won't waste my time."
Wasting time is not high on the list of interim managers. With short windows for results, having the cooperation of management is essential to success and results.
Bringing in an interim manager requires companies to provide plenty of communication and contact to ensure that the project results are positive. Also, according to North, tracking metrics along the way is essential to realise positive results.
Getting results is high on the list for North. "As an interim manager, it's important to make sure that you have on your list of changes some easy wins and some hard to dos. The easy wins make it easier to implement the changes."
Being an interim manager is difficult. Some of the challenges faced by them include complications with unions, issues with the corporate culture, lack of out clauses and lack of capital. "When an organisation doesn't have capital to implement changes, fund raising or taking on debt are options that have to be seriously considered by the board and are a serious challenge to an interim manager," stresses North.
According to Rich, it does take a special person to fill an interim role. "Firstly, you must have someone who is highly skilled. We often say the person we put in as an interim manager must be overskilled for the role so they don't have to be told how to do the role. Second, they must have the personality and communication skills that enable them to work in with the management team. We cannot put someone in who will upset the applecart."
Reaping the benefits
Speed is one of the benefits companies realise when using an interim manager. For instance, they are able to start within days, with minimal recruitment. Not only are they able to start within a short period of time, there are many highly qualified managers focusing on specific niches. North, an interim CEO in the US, focuses on revamping medical schools. Her experience as a CEO and in the medical field means that she is able to bring substantial knowledge and experience to each project.
"Not surprisingly our services are often called for when someone resigns and there is an urgent need to replace them. For example, we had a major listed company that lost their in-house legal and company secretary three months before an AGM. They needed someone quickly but it may have taken them six months to find someone suitable. We got a phone call, we checked our database and found someone with exactly the right skills, and that person started within a week of the brief," Rich explains.
One of the major benefits of hiring an interim manager is the objectivity they bring to the organisation. They are not constrained by company politics, personalities or protocols. They are able to focus their energies on critical tasks and they know their performance is measured on the results achieved.
"An interim can bring a fresh perspective. They may come from a different industry but they bring that knowledge to the company they are hired for. We had a role for a CFO in a large government utility - the person we put in came from a FMCG background. They thought he was terrific," says Rich.
An additional benefit to the company is the transfer of knowledge. When an interim manager is hired for a project, they not only bring results, but give employees useful contacts, new skill sets and experiences that will remain within the corporate knowledge base.
The price you pay
According to the IMA, the average daily rate in the private sector is US$1,432 with HR interim managers averaging US$1,328 per day. The cost of an interim manager is equivalent to 1% per day of the equivalent annual package for the position. So an executive interim manager operating as one of the corporate directors with a compensation of US$157,000 per annum, should be paid approximately US$1,570 per day for the executive interim manager role.
Unlike executive recruiters, Hamilton Rich does not charge a recruitment fee. "We charge a daily rate, which means there is an opportunity to transfer fixed costs to variable. You have a daily rate, and you know exactly what you're up for," says Rich.
The costs are further mitigated if, as often occurs, interim managers move to full-time roles with the client organisation. "The interim experience provides an excellent 'look-see' for both sides. The manager gets to experience the culture firsthand, the client sees how good the interim manager is for six months, they don't pay a recruitment fee, and then they can appoint them full-time," says Rich.
Working as an interim manager
"I'd never have been happy working in a consulting company. I love being able to make suggestions, implement the changes and make sure they're working," comments North, who loves working as an interim CEO, but she admits the job is not for everyone. "There's a little bit of a problem with work-life balance, but I love the work. Working as an interim manager requires a healthy sense of adventure, and enjoyment in experiencing something new.
"You're frequently moving to new locations, which is very disruptive to home life, but you get the opportunity to make a new set of friends and explore new cities and areas of the country."
Most of the interim managers currently working in the field are semi-retired and want more control over their lives. Although the work allows managers to have more control, it does make it difficult to raise a young family. According to North, most interim managers are single or more mature aged. Although the workforce is getting more creative and interim management is steadily increasing, the positions are not very conducive to a traditional family life.
If you are interested in working as an interim manager, North stresses the importance of finding a mentor. This field is fairly new, but growing rapidly, and there are interim executives, like North, willing to help other executives make the career change. Although interim managers traditionally were hired to fill a management gap, the position has evolved into a strategic position and managers are looking towards interim management as a long-term career instead of a short-term career option.
5 HR tips
What to look for in an interim manager:
- Someone who has a good track record
- Someone able to look with a fresh pair of eyes
- Someone who understands your corporate culture
- Someone who has an extensive knowledge base to transfer to your organisation
- Someone with good communication skills
