As an executive who has spent his career growing companies, taking companies public, and successfully selling businesses, Charlie Shalvoy says the first thing he does when he parachutes into a company is begin with an assessment. Whether the company is venture-capital backed or private, or in manufacturing, energy, semiconductors, or industrial equipment, figuring out the current state of operations is always the first step. Charlie divides the stages an interim executive goes through in taking action in a new company into four phases:
Phase 1: Taking Hold (90 Days)
When a company seeks to expand into new markets or scale operations to support current and future growth, Charlie takes on a role ranging from Interim CEO to Executive Chairman, where he coaches and serves alongside the CEO and management team. He describes that in the taking hold phase, an interim executive identifies what’s broken – even fast growing companies need repairs. What is getting in the way? What is causing distress?
It is likely that every organization will reach a crossroads where they must decide to grow, transform, or stagnate. No business opts to stand idle but by default, many do. In fact, when it comes to achieving sustainable growth, only 20% of organizations find success. How do organizations find themselves in a standstill? Usually, leadership has their hands tied — whether they are at a loss as to which direction the organization should go, are bound by layers of bureaucracy, or do not have the capacity to drive much-needed organizational change.
“How many businesses find their data to be a complete mess?” Christie Kelly, former CFO of JLL Real Estate questioned as she and a panel of high-profile CFOs discussed the changing landscape for financial leaders at an event held by the National Association of Corporate Directors.
In today’s world every business now seems to be in the game of being a technology business. That means that a new importance is placed on data, especially for CFOs.
“How do we transition to turn it (data) into insights, and how does that change finance to have more technology, process, and Six Sigma?” Kelly said.
The role of the CFO has evolved, due to the accelerated pace of the digital age. How? A strategic CFO drives transformational change. A CFO must not only understand a business from start to finish to provide financial excellence, but also must predict what is coming from a strategic standpoint and be ready to evolve.
There’s no question that the number of family offices is on the rise. A recent study by Campden Researchrevealed that there are over 5,300 family offices worldwide. About 2,200 of the family offices are in North America. About 67% of family offices that exist today were established after 2000.
There aren’t hard and fast rules on what amodern-day family officelooks like. A single family office typically has over $150 million in private wealth and is one family. In recent years, multi-family offices have increased. In multi-family offices, families — related or not — have shared interests, investment goals, infrastructure needs, or operational requirements. By coming together, they save resources. This way family offices can focus more energy on portfolio growth and increasing net profit margins.
Over the past decade, the way family offices invest has evolved. In the past, family offices stayed in their comfort zone, by acquiring operating businesses in their business sector.
It’s not uncommon for private equity portfolio companies to double or even triple growth thanks to merger or acquisition. Albeit positive, rapid growth brings new operational challenges that can stop the upward momentum in its tracks. Interim executives bring the expertise needed to enable growth on a massive scale.
“Sometimes a business will start with $40 million in sales, and through acquisition will be two or three times that size. Often that creates an environment where you need to add to the management team, whether that be the CFO or the CEO,” said Forest Wester, a Partner at Trivest Partners that leverages interim executives to enable growth.
Private equity funds use interim executives in a variety of scenarios. However, these scenarios are typically problems that need to be solved such as the abrupt departure of a CEO.
More than ever, a consistent brand that customers trust is critical to business growth. Whether product or service-based, B2B or B2C, local or global-focused, a strong brand with a great reputation is what enables a company to expand successfully.
Behind every powerful brand, stands an innovative Chief Marketing Officer. An experienced CMO can strategically plan and scale marketing plans during periods of business growth.
But not all companies can afford to hire a full-time CMO on a permanent basis. Many startups and midmarket companies reach a tipping point where they either expand or stagnate. All too often, the rate of business expansion they want to achieve outpaces their available operational resources and time.
We were having a conversation with an executive recently who shared about their experience parachuting into a business that was struggling with operational inefficiencies.
This executive, like many interims, kicked off the assignment by meeting face-to-face with the management team and employees to learn how the business functions, what’s working, and what isn’t. Their findings would turn into an operational roadmap of the business, where they would set out and implement a go-forward plan. When meeting with one team member and learning about what they did, the executive pointed to a process they had in place asking “why do you do that?”
The answer: “Because we’ve always done it that way”
My daughter eagerly accepted an internship at the morgue. Wait – how does she put it? The medical examiner’s office. Regardless, all I hear is morgue. Anyway, let’s move past the whole your-daughter-is-around-dead-people issue because here’s the interesting thing. They ask their interns to sign a statement agreeing to work pro re nata.
This was a new phrase for me: pro re nata. It is latin for “in the circumstances” or “as needed” or “as the situation arises.”
I believe the phrase is really a guiding light for the best interim execs around the world, because the best leaders operate as needs demand – pro re nata.
Let’s face it: an Interim Chief Information Officer has to be of instant value to an organization. A top interim CIO can take on any technically-challenging project that would be assigned to the permanent CIO, though they usually have a focus on bringing change and transformation to an organization.
While some Interim CIOs may be brought in to perform initial work such as a technology audit — a fast way to assess if an organization is optimally set up from an infrastructure perspective — in many other cases the need for an Interim CIO is driven by a specific project or initiative:
Business and ERP System Implementation >
When a company wants to automate process or functions from finance to accounting to supply chain and customer relationships,
We have spent years developing a methodology for matching companies and executives, but ultimately at the top of the list is chemistry between the executive, private equity fund, company owner, or management team. So once we suggest an executive or team to fit a company’s needs, the question usually arises: what questions should I be asking in an interview to see if it’s a good fit?
Here are a few recommendations so you will be armed with targeted questions for the interview process:
First-year Change Agent members have access to the Interim Institute’s 4 hour audio program on the Fundamentals of Interim Management, and a one-hour strategy session to help jumpstart their interim career.
*$200 additional charge for Accelerator Program only applies for first-year members. After the first year, membership renews at $485/year.