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Transcript of Interim Executive
8/7/2019 Interim Executive
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A Report rom the Human Capital Institut
March 200
Te Interim Executive:Gaining a Competitive Business Edge
through Interim Executive Management
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Executive SummaryInterim leadership is the strategic use o human capital to urther a
company’s business goals rapidly and expertly. Interim executives a
oten engaged to ll an unexpectedly vacant position, lead a transi-
tion in the company, guide the development o new initiatives, mana
merger and acquisition or initial public oerings, or execute comple
restructurings. Interim leaders, who approach a company to solve a
problem rather than climb a career ladder, bring to the employing r
experience, expertise, dedication and commitment which research
tells us cannot be duplicated rom the use o internal stang initiativ
In North America, the placement and management o the contingenworkorce is a huge business, time-tested and well-understood or
both its economic and business value. Here, the contingent worko
is expected to grow at three to our times the rate o the traditional
workorce and will make up approximately 25 percent o the entire
workorce by 2012.1 Surpassing that, however, is the growth mar-
ket in the placement o high-level executives to ll specic roles, to
execute on critical projects or to manage transormational change a
an interim position.2 And in both the UK and Europe, deployment o
executives as interim employees lling critical business roles is wide
spread among corporations o all sizes, in part because o the oner
labor laws that aect continuation o employment.
The business edge these executives bring to a company include:
Experience and rapid time to value
Execution management
Sustained value
Risk mitigation
Lower cost o leadership talent
This white paper details the value proposition these interim executiv
bring to a business.
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Addressing the Talent GapThe scarcity o skilled talent is cited as the greatest issue or today’s
business leaders as they consider their stang requirements or
the next decade.4 But these statements are based on what is
known today—not what might happen in the uture. Young, small
and mid-market companies, especially, oten lack the experience
on-sta to recognize the “stall points” that can seriously impede
their business success.5 It is oten the unoreseen that initially
drives these corporations to seek the contract-based experienced
proessionals—“hired guns,” as they are sometimes called—that
constitute the growing ranks o interim executives lling C-level and
board-level positions, usually on temporary basis. Whether they arehired or two months or two years, interim executives bring a wealth
o experience to the positions they now ll.
Why Interim Executives?
Perhaps the most apparent use o an interim leadership is to ll
the seat o an executive who suddenly or unexpectedly leaves the
company. Around 25 percent o all interim executives are hired
to ll shoes suddenly let vacant.6 And despite the lip-service
currently paid them, succession plans are lacking in the majority
o businesses, especially middle-market companies. Whether theexecutive is suddenly dismissed, quits, or or other reasons cannot
continue in the position, the eect o the loss on a business can
appear catastrophic. And standard steps toward replacement
are slow: When a new hiring initiative or a permanent executive
is begun, it is, on average, an 18-month process to secure a new
senior level manager.
In this case, an interim executive is oten the best choice to ensure
business continuity.
In addition, oten a company needs to execute a strategy in anew area—or example, Sarbanes-Oxley compliance. The goal
o creating and applying compliant business practices may be
a stretch or the current nancial team in addition to the existing
management responsibilities they are already undertaking.
Furthermore, the goal is such that once the processes and
procedures are in place, they would not require a dedicated
executive to manage them.
The Value ofInterim Executives
Interim executives are poised
to bring objectivity, maturity, and
experiential depth to the existing
senior management teams they
are assigned to lead.3
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The skills brought to the required strategic business planning may
well not be ound in mid-market companies. Rarely is there a
management team with experience in mergers and acquisitions, IPO
planning, turnarounds, reorganizations, strengthening or re-position
a company to sell, or risk management, or sales-related strategies
such as increasing market share, advancing into new markets or
geographies, or opportunity proling.
This is a prime example o the business use o an interim executive.
The experienced proessional would create and execute a program
and, once it was running smoothly, transition it to, or example,
the internal accounting sta. Thus a project or which internal skillsor expertise—or sometimes just time—is lacking can be ar more
expeditiously managed by an outside proessional expert on an
interim basis.
In addition to strategic planning, interim executives are assets
oten relied upon in executing specic projects. Projects—generally
described as events with a beginning and an end—requently requir
a particular skill set to execute correctly and oten represent the rst
oray into interim leadership a company may make. Project creation
management and execution can be strategic or tactical, but researc
studies show ar more avorable results when a leader without the
handicap o internal politics or past relationship which may taint the
project steps is brought in to manage the job. These results include
aster time to market and time to production or new products, or ne
marketing or branding initiatives, or projects with very explicit goals,
such as a need to increase prot margins or improve operational an
nancial eciencies.
But why not hire a management consultant? Are they not the
same thing? Management consulting rms typically have standard
methodologies and long assessment periods ater which expensive
consultants “consult” and provide advice. They develop a plan
o attack, but only hal the time do they implement their own
recommendations. And even more rarely do they put the training an
knowledge transer in place to ensure that the best practices initiate
are maintained by the permanent employees at the company.
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Thereore, the hard work o execution and potential results rests
on the internal team, which may not have the skills or the time to
execute the project to completion. The goals sought go unmet.
The interim executive is in a very dierent position. In addition
to the advisory role o a consultant, interim executives ll a vital,
active role: bringing extensive talent and management experience
to execute projects to their successul conclusions. Because
their tenure may be relatively short, interim executives are results-
oriented. It is the achievement o results, not an internal career
path, that motivates these proessional executives. Companies that
hire them select rom a veriable resume o rich experience in thesame activity that they now wish to address. Interim proessionals
come in with an assignment —to open a new geography, lead a
new product development eort, or evaluate and negotiate a new
acquisition, or example—that they have successully completed in
the past, perhaps many times. They are uniquely positioned to add
objectivity, detachment and depth to existing senior management
teams. Their resh perspectives can be invaluable. The value o
the interim employee is generally sustained with the transer o
knowledge to the rest o the company. Research rm MORI ound
that companies regarded interim executives as both more suitable
and cost-eective than management consultants.7
The Interim SolutionWhen a key position-holder is lost, or whatever reason, CEOs,
CFOs, CIOs and director-level positions are lled temporarily by
interim executives who held these positions successully in the
past. These executives may not be hired to initiate something
dramatically new in the company as much as to keep that part o
the company or which they are responsible on an even keel and to
ensure business continuity.
These interim positions are oten used as a sounding board or both
the executive and the company—the executive can ll a role on an
interim basis while considering whether that company would be a
good t or permanent employment, and conversely, the company
has an easily managed way to evaluate whether that person would
prove a long-term hire worth adding to the payroll.
Interim Executives Achieve
Goals 20 Times Faster Than
Permanent Senior Managers
An interim executive—who hasjoined a business at perhaps
as little as a week’s notice—will
learn 90 percent o what he or
she needs to know on the frst
day in the job. By the end o the
frst week, that interim executive
would have learned 99 percent o
what he or she needs to know.8
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In addition to lling empty seats, times o transition and change or
companies are oten key motivators or introducing interim leadersh
As companies move beyond the rst ounder, enter a growth phase
acquire new rms or are themselves acquired or acing restructuring
they turn to the experienced guidance o leaders who have aced
those issues beore. Executives skilled in corporate transormation,
and the accompanying cultural change management that oten
ensues, and those skilled in talent management during times o
downsizing are invaluable to companies at unsettling times.
The Interim Executive Value PropositionBeyond looking at the reasons an interim executive is hired by a
company—to ll a vacancy, lead a project, implement a new strateg
or business initiative, or to undertake a corporate turnaround or exit
strategy—companies must evaluate the business value derived rom
a senior interim employee. Oten or start-ups, smaller or mid-marke
companies, the interim executive provides a level o expertise and
experience ar beyond what the company could attract or aord on
permanent basis. Other key points o value include:
Experience and rapid time to value. Executives who work as
interim employees have the experience to hit the ground running,because they have successully dealt with the issues at hand
beore. They can start contributing and providing high-value
impact immediately. As they are hired to complete a task or ulll
a specic role, they are very results-oriented, thus continuously
identiying, clariying and veriying the criteria by which the compa
will measure his or her perormance. In addition, because o their
unique role within an organization, the interim executives are
goal-oriented, rather than career-oriented. Interim leaders are not
distracted by internal politics, nor rom their experience, bringing
resh views to issues at hand.
Unencumbered by processes, sta issues or politics, interim
executives provide an objective, resh perspective and ocus
on the business strategies or processes at hand.
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The Demand and the Value
of Interim Executives
“The skills shortage, the
Baby Boomer retirement and
a general acceptance or
contingent labor is driving the
demand or interim executives.
Interim execs can make good
business sense because you are
getting the expertise you might
not otherwise be able to hire—
and much more quickly.”
—Greg NetlandCEO o Vedior North America9
The executives who ll interim positions in companies elect
this as their career: these are individuals who enjoy putting
out res, relish the challenge o change, and thrive on walking
into a new situation condent o a successul outcome. Their
commitment is to the task at hand; their condence is based
on “been-there; done-that” experience.
Execution management. Rather than acting in an advisory
or consultancy role, interim executives are responsible and
accountable leaders who expect to implement and manage a
business or project to its successul conclusion, and be measured
on delivering results.
Sustainability. While their tenure may relatively short, interim
leaders have long-term impact, as they share their expertise with
the internal teams with which they work and ensure that solutions
are integrated into the company’s business processes.
Risk mitigation. Seasoned executives constitute a risk mitigation
strategy or small and mid-sized companies in that they have
a public track record. Because they have conronted similar
challenges previously, they can articulate the pros and cons o
planned actions based on experience rather than hypothesis.Change can be an inherent risk in itsel: Executives with change
management experience can ease painul transitions and serve as
catalysts or positive change in the organization.
Lower cost of leadership talent. Expense management is aided
with interim employees at all levels. Particularly in times o scal or
economic uncertainly, the ability to readily add and subtract both
sta and executive management represents a return on capital
strategy that impacts the bottom line. As assignment-based
employees, interim executives provide a cost-eective, short-term
solution to ll business-critical gaps or drive major initiatives suchas mitigating or overcoming crisis situations including nancial
shortalls, takeovers, turnarounds, or amily conficts. Companies
can avoid unnecessarily tying up capital in human capital: They
can avoid a permanent hire they do not need or things that
should run by themselves i set up correctly (GAAP compliance
in accounting, e.g.) or or initiatives that have an identiable
conclusion—such as a recruiting initiative that, once complete,
does not require the long-term employ o a proessional recruiter.
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In addition, companies can avoid the cost o a bad hire, hired
quickly and with insucient evaluation. Oten i a new hire provesa mistake, it takes months or years to undo the damage and
rell the position. Plus, hiring the wrong person is expensive.
The company suers recruitment costs (or the mist and or
a replacement), lost productivity, lost business opportunities,
severance pay, unemployment compensation and maybe
even legal ees.
Many experts agree that, added up, hiring the wrong person
will cost a company three times the person’s annual salary.10 In
addition to the monetary cost, a bad hiring decision adversely
aects the morale o other employees. Hiring the wrong person,
especially in a management role, can actually result in the loss o
good workers.
ConclusionBusiness leaders are continually challenged to deliver results,
oten under severe time constraints, while maintaining a vision or
their company’s long-term strategy. However, when key skills are
missing rom the management team, due to a sudden resignation,
a gap in experience as the company expands or enters a new
market, explores new business models, or requires immediate
expertise in a new area, the company can nd itsel at a competitive
disadvantage or suer serious nancial setbacks.
Interim executives are generally part o a team o skilled
proessionals who have their own pool o talent to draw rom,
adding bench strength (i needed) to the hiring company. And
when very specic skill sets are in demand, these executives can
span their broad network to help locate people with the skills
required. The executives who ll interim positions in companies
elect this as their career: These are individuals who enjoy puttingout res, relish the challenge o change, and thrive on walking
into a new situation, condent o a successul outcome. Their
commitment is to the task at hand; their condence is based on
“been-there; done-that” experience.
Companies that leverage their ability to access leadership talent on
an interim basis have a competitive edge in their time to market,
their return on executive investment, and their ability to execute
their business strategies.
Growing Demand for
Interim Executives
“The use o interim executives
is going to be a solid trend
over the next several years as
the market becomes tighter or
specialized talent. The labor
orce is going to lose many
executives over the next several
years as the population ages.
The need will be particularly
acute or managers in their late
30s and early 40s. The result
will likely be a lengthening o the
permanent search cycle, and
this should create a vacuum that
the interim executive flls.”
—Randy Mehl
Robert W. Baird & Co.
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Te Human Capital Institute
The Human Capital Institute is a global think tank,
educator, and proessional association dening the agenda
and setting the pace or the new business science o
strategic talent management. With more than 107,000
members in over 40 countries, HCI oers a new association
ramework that cuts across the silos o recruitment,
HR/OD, nance, sales and marketing, operations,
manuacturing and IT. We provide key executives, line
managers and talent management proessionals with the
newest education, most eective tools and best practices
in talent strategy, acquisition, alignment, engagement,
deployment, measurement, and retention.
Through research and collaboration, HCI programs collect
original, creative ideas rom a eld o the brightest thought
leaders in talent management. Those ideas are then
transormed into measurable, real-world strategies that help
our members attract and retain high-perorming people, build
a diverse, inclusive workplace, and leverage individual and
team perormance throughout the enterprise.
The uture belongs to leaders with innovative ideas and
strategic knowledge. We invite you to learn, share and grow
your career with HCI’s comprehensive resources, and to join
our high-achieving, orward-looking membership community.
1250 Connecticut Avenue, Suite 200
Washington, D.C. 20036
Te Author
Dr. Katherine Jones is a member
o HCI’s Research Advisory Board
and was principal advisor to this
research study. Dr. Jones is the
Director o Marketing or NetSuite,
Inc., a Bay Area company that
provides integrated ERP solutions
as a hosted service to middle-
market enterprises. She was a
research director at AberdeenGroup in Boston or eight years,
ocusing on research and consultin
services in workorce managemen
ERP and mid-market companies.
She has written widely on many
areas o talent management,
technology and business practices
A veteran in enterprise application
Jones has been responsible or
technical product marketing andstrategic alliance management in
several computer companies since
1984. She ounded Independent
Consulting Services in 1994 to
provide marketing services to
high-tech companies. Prior to a
high-technology career, Jones
was a university dean, involved in
academic administration, research
and teaching. Jones is a requentspeaker and is widely published
in the U.S. and abroad. She has a
master and doctorate rom Cornel
University.