Interim executives are hired for the experience and judgment they bring to the table. In the topsy-turvy world of a turnaround or start-up, unique and perplexing scenarios inevitably arise. And interims, by definition, will likely face a wider variety of challenges over the course of time than their stay-put senior executive counterparts.
But, as the saying goes, it can be lonely at the top whether you’re a solo practitioner or even in a partnership.
Ernie Beal knows the pressure of being an interim CEO. With many states having vended out inmate health services to private enterprises, Ernie is running a new project for Corizon Health, a firm that operates clinics and hospital beds for inmates. One of Beal’s big challenges with this project is the need for tight security.
According to ManpowerGroup’s 2011 labor-shortage study, 52% of U.S employers surveyed said that a shortage of talent was keeping them from hiring more robustly.
“We know employers are struggling to fill open positions that require specialized and technical skills,” according to the staffing group’s survey. Management/executive positions made it into the study’s top-ten list of the hardest jobs for U.S. employers to fill.
Maybe those companies aren’t looking in the right places.
In business, everybody wants to be the cheetah: nimble, quick, flexible, and able to respond rapidly to twists and turns in the business cycle.
But even cheetahs band together when necessary, finding value in shared resources. The following story illustrates how well that can work.
Nick Clementi’s interim firm was created as a partnership of six executives who’d just gone through transactions as part of PE-owned ventures. They’d created liquidity events, he said, and found themselves sitting with cash but finished with their previous engagements.
What is an interim? Though the specialty of highly talented interim executives is quickly growing, many companies remain unaware of this critical resource. And despite Europe’s head-start in using interim executive labor, lack of clarity exists on both sides of the Atlantic as well as the rest of the globe.
Interim executives and consultants share traits. But consulting tends to be built around producing analysis and delivering a thought product. The definition of interim is different. An interim remains to get the grease on his or her hands as a company implements change. While analysis is a fundamental tool in the executive interim’s toolbox, the ability to implement and execute defines the interim. They can be essential during critical periods of a company’s life, including the stages of start-up, turnaround, or internal change.
While Europe’s economic woes have factored into the fee structures and engagement levels of interim executives in recent years, Europe-based interims are concerned about another force putting pressuring on fees: headhunting firms.
Interims from Europe say the market is awash in placement firms looking to match European interim executives with the companies that need them. Of course, there are reputable placement firms that specialize in placing interim executives, but those firms aren’t the problem.
Fakers and Posers Flood the European Interim Market, Fee Pressure Up
European interims are concerned that many of today’s middlemen promise interim executive placement services, but are muddying the definition of interim and harming a specialty that lives by its promise of top-flight decision-making backed by experienced strategy execution under a fixed timeframe.
For the high rungs of interim executives, that watering down is resulting in lower fee structures.
A tendency among interim executives is to go single-shingle: the practice revolves around you alone. That strategy is often misguided. Don’t miss out on the advantages of a partnership.
Interim CEOs in particular must realize that just because you have a good strategy doesn’t mean you can execute it, according to Shankar Ramamurthy, an experienced interim who specializes in the technology industry. He has served as chairman at outside firms as well as his own start-ups.
Ramamurthy said having experienced interims within grasp eliminates the risk that he, as CEO, would have to rush to identify an unknown to join him in a particular engagement. “You want to bring in people you’ve worked with before and who are capable of developing” your strategy, he said.
Some interim executives enter their engagements amid the glare of the spotlight. Like the Mick Jaggers of the world, they are in high demand, and unlikely to receive an anonymous entry onstage or exit offstage.
High profile interim gigs not only offer inspiration, they showcase the benefits of bringing in an interim executive.
Britain’s Ron Sandler has rock star status. Born in Zimbabwe and a citizen of Germany, Sandler represents the ability of interims to seamlessly enter where they’re needed. Sandler was called in by the U.K. government to help save Northern Rock bank during the early days of the 2009-2010 global recession.
An Echo of the Great Depression
Family-owned companies are classic examples of companies that could benefit greatly by utilizing outside expertise. However, bringing in an outsider is often a concept that is difficult for a family-owned company to swallow.
Gimbal’s Fine Candies isn’t one of them. The candy company has called San Francisco home for more than 100 years. Founded in 1898 by Alexander Gimbal, the company is still making candy four generations later.
Lance Gimbal, the company’s current president, ultimately purchased Gimbal’s from the founder. Although he’d spent his career at the company, he primarily was involved in production. A new host of responsibilities came along with ownership, and Gimbal decided to seek expertise from outside.
“Knowing when it’s time to bring in experts, and not letting ego get in the way, has been extremely valuable to me and my company,” Gimbal said.