The Enduring Value of Interim Leadership
Knowing when and why you should hire an interim executive could save your organization from a crisis, especially when one of your executives suddenly steps down.
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You’ve just suffered an unexpected departure from your executive team. Nobody saw it coming, and there really isn’t anyone within the organization who can step in and fill the recently vacated shoes.
Or perhaps you have just landed a new contract, but you don’t have the people or the skills to tackle a completely new challenge in a completely new market.
Or maybe you need to add some seasoned experience to your e-team to help them navigate a particularly challenging economy.
In all of those scenarios, who are you going to call?
Increasingly, situations like these are prompting organizations to look at interim executive candidates. Although interim or contingent hiring has been an effective workforce management tool for a very long time, it has not been used as often to fill gaps in executive teams. Recent trends show that it is gaining in popularity.
For larger organizations, with deeper leadership bench strength and (in most cases) pre-existing succession plans for every important senior leadership role, the need for a contingent executive may not be as great. With a larger company, it’s easier to shuffle the deck and cover the gaps that come from sudden departures or the arrival of new projects.
However, interim executives are an excellent option for smaller or medium-sized companies that are less active in succession planning, or which simply don’t have the bench strength internally to plug a big and potentially consequential hole at the top of their leadership structure.
Emergency versus Strategy
In general, interim executives are brought in for two main reasons: to fill an immediate or emergency gap, or to support a short to medium-term strategic need in the organization.
The majority of the work we do to find interims comes from smaller or medium-sized clients who come to us with some urgency around finding a replacement for a senior business leader who has been forced to exit because of scandal, a performance issue, or personal health reasons.
These organizations have an immediate need for a steady hand on the rudder until a longer-term solution can be found. But increasingly, many other client organizations are coming to realize that interims make sense in less urgent, more strategic scenarios.
The more you look at these strategic scenarios, the more you realize that this is an option that more organizations should undertake.
The top five strategic scenarios where interim executives make sense:
1. Unmatched workforce flexibility: Keeping a portion of your senior team on interim engagements allows for greater workforce management and flexibility into the future. As the project or market needs change, you can exit one interim and fill a spot on your e-team with another person with different expertise to suit any new skills requirements. Interim hires ensure that you always have the right talent for the project rather.
2. Just in time addition of skills: If your e-team is good in general but isn’t equipped for a specific project or initiative, an interim executive can be an excellent option. Not only do you get immediate access to new expertise, but you have an opportunity for a knowledge transfer with your permanent executives. Situations like M&As are a good example of where an organization might want to bring in someone who has expertise with integrating two organizations. If you have never been through a M&A before, it’s unlikely you’re going to have that expertise in-house.
3. Expanding into new markets: One of the biggest and most common challenges facing smaller and medium-sized companies is expanding into new markets. If your organization is preparing to do business in a new country that might involve working with a new language and culture, it’s unlikely you have the internal leadership capacity to deal with all of the unique challenges that can arise. Hiring interim leaders who have already worked in that market, or who have experience helping organizations jump to new jurisdictions, can be invaluable.
4. Managing the frothy marketplace: In uncertain times, like the ones we’re experiencing now, it is often difficult to determine the exact array of skills and expertise you might need on your e-team and the skill needs could change rapidly. This is particularly important when you’re facing a “frothy” talent marketplace, where many organizations might be so desperate to bring on new people, they are over-hiring and overpaying to corner available talent. This can leave organizations with a glut of people who are bad fits or who don’t meet future expectations. Interims give you the time and space to figure out exactly who and what you need.
5. Training wheels: When small and medium-sized companies promote from within to fill a spot on the e-team, it’s not uncommon for those newly promoted executives to occasionally struggle in their new role. Interims can help mentor these new executives, giving them the time and support necessary to learn all that is required of them in their new jobs. This can be a particularly valuable option if, in addition to promoting someone to the e-team, you expect them to bring a new set of skills to the job. An interim executive/mentor can help new leaders carve out time to reskill or upskill.
Interim executives bring new skills, expertise and perspective to an organization. In some instances, their contributions are so valuable, they are offered opportunities to stay on with the company that brought them in as an interim hire.
With the ability to match an executive to a specific challenge, and the absence of any long-term commitment, interim or contingent hires are the perfect workforce management strategy for our trying times.