Check out all the on-demand sessions from the Intelligent Security Summit here.
From the migration of critical processes to the cloud and the switch to remote work to the Great Resignation and the Great Reshuffle, human resources professionals have adapted to a staggering pace of change. And with an uncertain economy and a corporate culture still in flux, the pace is not on the verge of slowing down.
Next year is certain to bring a range of new challenges, and there is one that HR departments are not looking forward to: Coping with the current high rate of employee turnover. HR leaders are especially pressed when the game of musical chairs extends to the C-suite.
When interim management is the best option
Replacing top executives is disruptive and time-consuming, and it’s also expensive. Retained search firms, tasked with finding permanent replacements for CEOs, CFOs and other company top brass, often charge one-third of the new executive’s first-year salary, or a flat fee that begins at $100,000. And those are just the costs of executive search. Hiring, of course, comes with long-term contracts, benefits and severance packages that make it imperative that the new full-time executive is an ideal fit for the company for years to come.
Because of this daunting process, HR pros often hire interim executives to fill C-suite gaps. Interims can be a convenient alternative to full-timers, and often bring with them experience and skills that keep an organization on track during turbulent times.
Intelligent Security Summit On-Demand
Learn the critical role of AI & ML in cybersecurity and industry specific case studies. Watch on-demand sessions today.
In the year ahead, HR departments will be contemplating a range of different hiring scenarios to address economic headwinds and fast-changing company culture. Many will be deciding whether they need a new, permanent full-timer, or whether the relatively simple process of bringing in an interim executive will be the better option.
I have talked to hundreds of companies about both options, and helped many find interim management. Below are five common scenarios where opting for an interim executive is likely the better choice.
Top executive leaves suddenly
Executives part ways with a company for a variety of reasons. Sometimes an executive finds a better opportunity or leaves for personal reasons, or a company feels that the executive is no longer a good fit. Whatever the reason, it’s bad for business to leave top positions vacant for any length of time.
At the same time, a high-level departure often indicates that a company needs to make fundamental changes to move forward. This leaves HR departments in the unenviable position of finding a new “perfect fit” quickly. An interim hire gives HR some breathing room, while also sending a clear message to the market that the company is not a rudderless ship.
The interim can also assess and help fix any larger issues that the company is facing, as well as help determine what kind of permanent leader will be needed. They can help with the search process and ensure a smooth transition.
Company is growing rapidly
An interim hire is a great option for companies that lose a top executive while rapidly growing. Growth brings a series of new challenges, and surmounting these often requires new skillsets that are not necessarily found in-house. Some interim executives have extensive track records in launching new products, cracking new markets or otherwise scaling a company. Interims can build corporate structures and processes that will later benefit a permanent executive.
Company is considering a merger or acquisition
Companies need to build value rapidly — and be able to show it — when potential acquirers are circling. Interim management can be an asset at a time like this. That’s especially so if the leadership team has lost one or more members, is pressed for time or lacks deep experience with the M&A process.
Many interims, especially CFOs, are specialists in the due diligence process and other aspects of mergers and acquisitions. The existing C-suite may have many useful skills for the arduous deal-making process, but many companies benefit from tapping specific expertise in this area, and getting it on an on-demand basis.
Company is in trouble
Few executives specifically train for worst-case scenarios. But many interim executives are trained to shine when a business is “on fire.” These “black swan” scenarios can range from managerial misalignment to spiraling costs to stiff competition to fraud or unethical practices, and they can rock an organization to its core.
This is often the time when a business needs to see the dilemma from a fresh perspective. Interim execs — especially those who are “fixers” — offer that perspective and more. They devise solutions that come from years of experience running into and out of “burning buildings.”
Company is on the verge of a major change
ERP implementations, product launches, new manufacturing facility rollouts and other significant technical changes are challenging. While the existing team has conceptualized and planned for major changes of this kind, companies often need help with implementation.
Many interim execs essentially function as boots-on-the-ground, overseeing the work that goes into fundamental change. Many organizations already have big-picture thinkers and meticulous planners, but need a doer.
With so many economic challenges facing companies in virtually every industry — and turnover still a persistent problem — it is certain that there will be holes in company leadership teams in the months and years ahead.
Some companies will get lucky, and quickly find a permanent replacement for departed executives who is deemed a perfect fit. But many others will opt for a more convenient, more flexible and less risky way to ensure their company has the leadership it needs.
Like most things today, business acumen and expertise can be acquired on-demand and as-a-service. And there are many junctures in the life of a company when acquiring them this way is the option that makes sense.
Olivia Wagner is cofounder of InterimExecs and coauthor of Right Leader Right Time.