Maximizing the Potential of Interim Executives
Dynamic shifts in the global business landscape necessitate a new level of agility. With so much disruption and innovation happening each day, companies often require flexible, high-caliber leadership to steer transformative initiatives, address sudden gaps, or drive rapid change.
Uniquely positioned at the crossroads of expertise and adaptability are interim executives. These seasoned professionals offer a compelling solution for firms looking to augment their strategic capabilities on a short-term basis and have immediate access to independent talent.
Understanding When to Engage Interim Executives
Identifying the right time to engage an interim executive is as imperative as understanding their potential. Four scenarios often necessitate their involvement: leadership gaps, sudden departures, special projects or transformations, and the need for specific expertise.
In periods of transition or growth, organizations may face an absence of strategic leadership. For example, when expanding into a new market, a company may not have the necessary experience on its leadership team. However, an interim executive with expertise in that market can lead a company through expansion and help establish permanent leadership.
Unforeseen resignations can disrupt operations, harming both internal morale and external stakeholder confidence. Interim executives, with their readiness and ability to step into complex situations, provide stability, continuity, and expertise during these challenging times. They ensure the organization’s strategic objectives remain on track, buying time for a thorough search for a permanent replacement.
Embarking on complex projects like digital transformations or post-merger integrations often requires special skills or added leadership. Interim executives fill this gap, providing needed expertise without long-term obligations. For instance, a firm lacking a seasoned chief digital officer for a digital overhaul can rely on an interim executive. This approach ensures successful execution and a smooth digital transition.
Sometimes, organizations require expertise not present in their current leadership, such as regulatory compliance in a new territory or advanced technology implementation. For example, consider a firm navigating regulatory changes in a foreign market; an interim executive with relevant experience becomes invaluable, facilitating a smooth transition through these complexities.
When Not To Use Interims
Interim executives bring a unique blend of skills and perspectives to an organization. However, successfully integrating them is never guaranteed; and might not be wise in specific situations. One key scenario stands out: when there’s a lack of internal alignment regarding the value of an interim executive.
Internal alignment – the consensus among team members, other executives, and stakeholders – is paramount when considering an interim appointment. The engagement could fall short of expectations if your organization lacks a unified understanding of the interim’s role and value. It’s not only about the contributions an interim can make but also how these are perceived and supported within the organization.
By the nature of their role, interim executives interact with various levels within the organization, so alignment on their value is essential to avoid miscommunication and unmet expectations. Any discord can undermine the interim’s impact, impede them from maximizing their potential, and pose unwarranted challenges that set up both the interim and the organization for failure.
Developing an Effective Plan for Utilizing Interims
A well-structured utilization plan is essential to unlocking interim executives’ full potential. It entails recognizing the need, defining objectives, and creating a robust onboarding plan. While these steps require some thought about your goals for the engagement and internal processes, they can happen fast if you have the proper buy-in and alignment from stakeholders.
Effective planning starts with identifying the need. Whether you’re filling a leadership gap, spearheading a transformation project, or requiring specific expertise, recognizing where an interim executive can bring value is the first step.
Outlining specific objectives for an interim role is crucial once the need is recognized. This clarity sets expectations and aids in performance assessment. If a company hires an interim executive to lead a digital transformation, it can establish clear objectives, such as completing the project within a set timeline and achieving specific benchmarks.
Adopting a strategic approach to using interim executives instead of sporadic, isolated engagements is a best practice that amplifies value and improves outcomes. Even though not all companies have an approach outlined, the ones that do can reap substantial rewards. Incorporating interim executives into the broader talent strategy promotes forward-thinking while facilitating swift pivots in response to various business challenges and opportunities. Moreover, it’s a practice that can enhance internal alignment, foster a shared understanding of the interim’s role and value, and result in better value and outcomes.
A crucial factor for interim executives is efficient onboarding and aligning them with your organization’s most immediate priorities and culture. Clear timelines, responsibilities, and “rules of the road” for the engagement—outlining team management structures and decision-making authority—aid in this transition. Partnerships with advisors like Business Talent Group (BTG), who are proficient in engagement scoping, talent delivery, and knowledge transfer, can expedite this process and ensure a successful start for your interim executive.
Navigating the Transition: Integrating Interim Executives
The arrival of an interim executive heralds a phase of transition, one that needs careful handling to ensure successful integration and collaboration.
Companies must clearly explain the business and its objectives to interim executives to ensure they can hit the ground running. A solid induction plan is crucial to enable this. This type of plan allows interims to meet the team, better understand their duties, and adapt to the company’s culture.
Interim executives must form productive relationships with permanent staff. Encouraging open communication, setting clear expectations, and promoting collaboration can foster cohesion and a positive working environment.
A key part of this transition phase is knowledge transfer. Interim executives bring a wealth of industry insights and experience. Creating channels for sharing this expertise with permanent staff is a game-changer.
Post-Engagement Strategy: Beyond the Interim Role
Planning a post-engagement strategy is a crucial step in maximizing the potential of interim executives in business strategy. Let’s explore two primary aspects: preparing for succession or transitioning back to permanent leadership and rolling into projects to support permanent leaders.
First, preparing for succession or transitioning back to permanent leadership is crucial for any organization. For instance, if a CEO suddenly departs, an interim leader can stabilize the company and prepare for a smooth transition. Moreover, the interim executive can coach internal candidates who may step up into the permanent role and sets the groundwork for the incoming CEO—whether they are an internal or external hire—to take the reins.
Second, the talent can further enable a seamless transition by rolling into projects to support permanent leaders, bridging the gaps between strategic vision and execution. For example, a Fortune 500 company undergoing restructuring can benefit from an interim CFO’s extensive experience turning around struggling businesses. The interim CFO initiates projects to realign financial processes and controls, providing immediate relief. Once the firm hires a permanent CFO, the interim exec can transition to a supporting role informed by their prior experience in the CFO seat, ensuring the successful implementation of value-adding projects.
Pitfalls of Reallocating Internal Talent as a Substitute for Interims
Reallocating internal talent sounds like a cost-effective option when considering alternatives to hiring interim executives. However, this approach carries several pitfalls that businesses must weigh.
Adding more responsibilities to an existing employee’s workload can overburden them, leading to burnout. Let’s take a scenario where a current executive takes on an additional role in crisis management. Despite initial enthusiasm, the added workload reduces productivity, lowers morale, and leads to resignations.
Transferring an employee to fill a critical role can deplete resources in their original department, disrupt workflow, and create inefficiencies. Imagine a large manufacturing firm temporarily promoting an important engineer to a project management role. The resulting gap in the engineering team would negatively impact their productivity.
Asking an employee to assume unfamiliar roles can set an otherwise capable leader up for failure. For example, what happens if a company tasks an accounting leader to own investor communications? Even if the accounting leader has financial expertise, they don’t necessarily have the expertise or ability to effectively communicate to investors, resulting in diminished confidence.
Case Studies: Effective Use of Interims in Different Industries
To fully understand the potential of interim executives, we must look to various industries for concrete examples. Life sciences, private equity, and consumer/retail are just a few examples of sectors that showcase the vital role of these executives and how an experienced on-demand talent partner like BTG can help.
Life Sciences
A rapidly growing public biotech company faced an urgent gap in its Total Rewards department. At the same time, it desired a forward-thinking retention strategy. To address these dual tactical and strategic needs, they sought assistance from BTG.
BTG swiftly connected the company with an HR consultant with Big 4 consulting experience and skills in process design, compensation, and employee relations. This specialist simultaneously kept day-to-day operations running smoothly and developed a future-focused strategy, providing much-needed support and strategic relief for the CHRO.
Private Equity
A private-equity-backed consumer apparel firm contacted BTG to find an experienced interim CFO to manage critical financial operations. It needed visibility into the business and to drive key initiatives related to audit and tax filings, monthly close activities, a rolling CF model, and the setup of ABL. This situation reflects a broader trend where CFOs are the most in-demand for interim C-suite roles, and the finance function broadly is the greatest area of demand for interim executives at all levels.
In this case, BTG effectively matched the company with a seasoned consultant, boasting two decades of experience at McKinsey and Kearney, specializing in reshaping finance functions and business strategies. This story underlines the crucial role of interim executives in creating value in portfolio companies for private equity firms and BTG’s unrivaled capacity to satisfy this escalating demand.
Consumer/Retail
A multi-billion-dollar grocer had a crucial e-commerce optimization project which faced difficulties due to the absence of a chief data officer. To avoid delays, the chief customer and digital officer contacted BTG for temporary assistance.
BTG provided a former Apple data science manager specializing in digital transformation and creating business value through data analytics. The independent consultant created a plan, set a structure, and developed an analytical framework that fulfilled internal and external user requirements. As a result, the project moved forward successfully, allowing the executive team to concentrate on long-term hiring needs.
Partner with Business Talent Group
Interim executives can provide targeted expertise and deep operating experience that drives positive transformations in today’s rapidly changing business world. By partnering with BTG, companies can capitalize on this dynamic talent to enhance performance and seamlessly navigate critical transitions. The key to unlocking the potential of interim executives lies in knowing when to bring them on board. By working with a partner like BTG, businesses can strengthen their resilience and ensure a thriving future in a competitive marketplace.
