One thing that the recent economic turbulence has created for many CEOs is the need to have a leaner more productive organization with the ability to react quickly to a rapidly changing marketplace.
New approaches to staffing have also become a permanent part of the company of the future emerging from this painful period for many firms. Some of the more common changes are reduced work schedules, the use of temporary employees, interns and the growth in the demand for “interim executives.”
Interim executives are experienced managers who are hired for short periods of time to accelerate growth or to solve a key business problem. Unlike consultants who give advice for typically high fees, interim executives are experts who execute.
Some of the more obvious cost effective advantages of using interim executives is that instead of hiring a full time manager with all of the additional costs of benefits and other typical perks and delayed time to productivity, interim executives costs are only for the days used in productive work.
When you hire a full time manager, that’s what you get – full time. With an interim executive you have access to a world-class talent that otherwise would be out-of-reach as a permanent hire for a contracted project.
Another cost effective consideration in using interim executives is that there is no expensive recruiting fees, nor the time involved in searching for the right manager. In addition, the CEO avoids the hidden high cost of risk associated with a new hire and the time required for any new manager to get acclimated, politically accepted by the rest of the management team, and productive. The interim executive has a task to perform, knows how to do it – and executes. The political aspects of “getting to know you” and the costly aspects of training and orientation are avoided.
Additionally, hiring an interim executive saves the potentially high costs of termination, severance pay and other aspects of a failed hire.
Interim executives contracts being project related fit the time required to complete the assignment. Many contracts are for less than the standard company work week. You only pay for project execution and completion for whatever time it actually takes. The CEO has the maximum scheduling flexibility.
A project can start off on a full time basis for a month and then taper down to 3 days a week, or mornings only for 5 days, or every other day for a few weeks thereafter. In some situations an interim executive can work out of their home office. You can also swap executives in and out as situations require without long-term commitments to specific interim executives.
A natural question is “how do I know who I am getting as an interim executive”?
I asked Kristen McAlister, Executive Vice President of Cerius Interim Executive Solutions (www.ceriusinterim.com), the largest provider of interim executive management solutions in the U.S. with over 500 experienced executives in their talent pool available to work on business-critical assignments, how Cerius screens their candidates.
Kristen advised that a majority of their interims come from trusted sources. Even so, every interim goes through rigorous in-depth interviews, background checks and reference checks before they are Cerius-qualified. In addition, Cerius focuses on quick measureable results, rapid deployment (typically within one week), and continued oversight by Cerius management throughout the engagement.
The types of executives most in demand from Cerius are CMOs, CFOs, CIOs, VP Sales and VP HR . The average length of their contracts are for 6 month periods.
I asked if many of their interim executives were ever hired by clients and the experience to date is that only 1% have converted to full time hires.
The explanation here is that most interim executives prefer to remain as interims, and the level and type of expertise provided is project oriented and not what is typically needed for the long term. Interim executives can make tough decisions quickly and implement them successfully because they are not involved in the typical company political process and are only focused on achieving their objectives.
Given the need for more conscious approaches to controlling fixed costs today and for the foreseeable future, the interim executive model is a sensible cost effective solution for CEOs. It’s a low risk, low cost, big rewards flexible staffing model that fits with the demands of an ever changing economy.
|Bob Donnelly, is CEO of VAAS Americas, the U.S. unit of the Chennai, India based maker and distributor of industrial valves. A coach, educator, and advisor to founders/CEOs of growing firms, he is a serial entrepreneur, having started, grown and sold several technology based businesses. Earlier in his career he held senior management positions with IBM, Pfizer, and Exxon.
He has developed an online MBA program in Entrepreneurship for Rushmore University with managers from global firms enrolled in the program. Since 1998 he has served as a venture mentor at New York University’s Stern School of Business Berkeley Center for Entrepreneurial Studies, where he advises start-ups on business plan development, marketing strategy, and presentation skills.
He writes the online Entrepreneurial CEO column for Chief Executive.