To fill the top seat with the right temporary leader, experts advise a strategy that balances “business as usual” with tactics that acknowledge and adjust to the unusual nature of the situation.
And it’s not a job for just anyone. “The interim executive needs to walk in with a full range of strategic and managerial skills—and that will make the shift efficient and effective,” advised Richard Lindenmuth, who has served as an interim executive at companies including ITT and Styrotek.
Here’s how experts advise that boards and companies plan for and find the right interim CEO.
1. Be confident in the person you pick. It’s up to the board to make sure the interim CEO is the right choice. “The executive brought in needs to have interim experience, not domain experience,” Lindenmuth advised. Further, if the new interim chief is internal, he or she needs “a wider breadth of knowledge about the whole business before they take the reins” than just a command of their specialization within the company, such as finance or marketing.
Some experts emphasize a familiarity with the company, while others believe the best interim leader will almost always be an existing board member or retired former senior executive of the firm. “The individual is already familiar not only with the corporate culture, but also with issues impacting the organization,” observed Jay Meschke, president of CBIZ Human Capital Services.
2. Move forward immediately. Once the appointment is made, the interim CEO “should quickly convene the organization’s senior management team and internal subject-matter experts in sales, customer service, supplier relationships [and] risk management,” noted Nick Kalm, founder of the Reputation Partners communications consultancy, “to identify any immediate vulnerabilities and ensure any current or pending critical activity is not dropped or missed.”
Meschke called this a “kitchen cabinet” approach that also might include the company’s top attorney, the CFO, the lead HR executive and other operational officers. Other important first meetings could include institutional investors, bankers, joint-venture partners and consultants.
Also, Kalm advised, the new interim CEO should immediately communicate with employees via broadcast voicemail or email “to demonstrate continuity and leadership.” And the new leader should either quickly reinforce his predecessor’s direction for the company—or quickly disavow it and suggest a new alternative is coming, depending on the circumstances of his ascension.
It’s important that the new interim CEO “align with the board, and specifically with the risk and audit committees, quickly,” noted George L. Davis Jr., global CEO practice leader for executive search company Egon Zehnder. This alignment also should extend to not just one or two directors but “the full board to support and get the interim CEO up to speed.”
3. Prioritize communications needs. The interim CEO should be provided with an overview of communications activities, including both those that already were scheduled and potential contingencies that could blindside him or her early on. “The communications function can provide a valuable service simply by identifying all of the major issues or potential vulnerabilities the CEO might have to address,” noted Tim O’Brien, head of O’Brien Public Relations.
4. Develop a network of ‘peers’ for the interim CEO to lean on. A new interim CEO is unlikely to have real peers in the company, so he or she should be able to turn to “resources that can substitute, including a formal or informal network with other CEOs who have been in the hot seat and may have valuable experiences from which to learn,” said Dennis Carey, a vice chairman of the board and CEO services for Korn Ferry. “There is really no substitute for that connection.”
5. Act with an eye to the long-term. Finally, no interim CEO should be appointed, however temporary the move sight seem, without ensuring the fit aligns with the company’s long-term future.
In any event, boards always should be planning for an interim-CEO, and not just when they need one. “It’s one thing to have a theoretical idea” of who that person might be, or even what type of person, “but quite another to have a complete process in place for how much latitude the interim CEO will have,” said Sandra Davis, chair of MDA Leadership, a talent and strategy consultancy.
“Whoever a board installs as interim CEO should be capable and prepared to be the permanent CEO, advised Tierney Remick, also a vice chairman for board and CEO services at Korn Ferry.
Added Constance Dierickx, head of CD Consulting, “Plan the handoff to the next permanent CEO —what you are learning, the conclusions you have reached, who the top performers are in the company and which ones are marginal, and what the customer relationships are like.
“If the interim stays on, the information they gather and the conclusions they reach will be invaluable.”
The naming of an interim CEO can seem a patchwork move, but at the best companies, experts said, it results from a planned, strategic process, even if it is an unexpected necessity.