CEO Turnover: Why the Bosses Are Leaving & Who’s Replacing Them

Millennials and Gen Z employees might get all the press for their “Great Resignation” but they aren’t the only ones who are leaving their jobs in droves. CEOs are too. The Great CEO Turnover, which peaked in 2021 and early 2022, has leveled off a bit. But it certainly doesn’t mean that your CEO is planning to stick around for the long haul.

Outplacement firm Challenger, Gray & Christmas compiles a monthly report on the CEO turnover rate. The July 2022 report shows that CEO changes at U.S. companies fell to 58 in July, down 45% from the 106 CEO exits recorded in June. It was the lowest monthly total since the early pandemic departures of April 2020.

However, departing CEOs are hardly a thing of the past.

When Deloitte and independent research firm Workplace Intelligence surveyed 2,100 employees and C-level executives in the United States, United Kingdom, Canada, and Australia, they found that an eye-popping 70% of top management are seriously considering quitting for a job that better supports their well-being. And 81% of the top execs say that improving their well-being is more important than advancing their career.

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Venture Capital 101: How to Survive and Thrive When VC Funds Dry Up

Way back in 2009, the Great Recession hit America. And it didn’t pass me by.

In case you don’t remember how bad things were, let me refresh your memory: Bear Stearns failed. Lehman Brothers failed. Merrill Lynch sold for next to nothing. Countrywide Mortgage sold for pennies on the dollar. AIG had to be propped up by the federal government. General Motors went bust, was put on life support thanks to the federal government. People were worried. They wondered whether they would go to the ATM one day and no cash would come out because their bank had failed.

And me? I was at a startup called PV Powered. We were developing the next generation of commercial and utility grade solar inverters. We had about 100 angel investors and we were burning $750,000 a month when the Great Recession hit despite as much bootstrapping as possible. The next thing we knew, 98 percent of the investors had backed out, equity stake be damned, announcing they would no longer support the company. And who could blame them?

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How To Do a Reverse Merger Into a Public Shell Company in 9 Not So Easy Steps. Or SPAC in 10!

When it’s time for a private company to go public, or the board of directors determines that fundraising is needed on a large scale, an IPO is not the only option. There’s also a less-well-known and, until recently, less-well-respected option: a reverse merger into a public shell. It is often called an Alternative Public Offering (APO).

This reverse takeover process, which can be faster and cheaper than a traditional Initial Public Offering, is growing in popularity.

Scott Jordan (no relation to InterimExecs’ CEO Robert Jordan), an investment banker and CFO who spent 30+ years working in biotech, engineered a reverse merger of a biopharma company in 2019. He says that while the coronavirus caused capital flow interruptions, investors in the private markets are still providing capital to companies with novel or scientifically validated biotechnology companies.

That means reverse mergers and PIPEs (Private Investment in a Public Entity) can still raise money needed to complete their deals. He estimates that about 20 biotech firms debuted in the public markets last year as a result of reverse mergers and the number is on track to repeat in 2020, despite the virus.

But let’s back up and begin at the beginning.

5 Trends Expanding the Need for Interim Executives Now

Even before the pandemic forced businesses to be more nimble and forward-thinking than ever before, the need for interim executives had been growing. In 2020, we asked 600+ execs to shed light on interim roles, a comprehensive survey that covered the who, what and why behind the growth of this category. And now as the world is finally defeating COVID-19, businesses are continuing to adapt and re-strategize with a new set of challenges, only amplifying the need for experienced, “make it happen” interim executives even more. 

To better understand how the current marketplace is dictating the need, we conducted a follow-up survey, asking 125 executives to answer the same question: What trends do you anticipate having the greatest effect on the interim specialty in the year ahead?” 

Interim Management Trending Up

Across both surveys, the conclusion was clear: interim executives are needed now more than ever. 71% of respondents see opportunities for interim management trending up and another 21% seeing they will remain stable throughout the coming yearHere, we break down the five reasons why more organizations are drawing on interim executive leadership:

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5 Highlights from InterimExecs in 2020

Every day at InterimExecs we are reminded of how grateful we are to work with inspiring leaders, owners, investors, and boards. While 2020 was a year of huge challenges, we saw many companies take time to reflect on how they could do better, embrace change, and seize new opportunities.

It was a full year and we are excited to share the InterimExecs RED Team 2020 Year in Review.

We are eager to continue helping other amazing companies secure expert RED Team leadership for their biggest challenges and greatest opportunities. Let us know how we can be a resource as you charge forward into 2021.

Healthcare Executives Tackle Big Provider and Hospital Issues

COVID-19 has caused unprecedented disruptions to the healthcare sector. Since the pandemic hit, hospitals and providers have had to deal with a surge in very sick, high-intensity patients while also having to shut down a huge portion of their traditional business. As non-urgent visits and procedures were cancelled, overall surgeries and hospital admissions plummeted. The combination of lower patient volumes, cancelled elective procedures, and higher expenses tied to the pandemic have created a financial crunch for hospitals, which are expected to lose $323 billion this year, according to a report from the American Hospital Association.

These drastic developments come at a time when the healthcare industry is already grappling with challenges posed by the digital transformation happening around electronic health record (EHR) implementation, Meaningful Use (MU) standards, HIPAA compliance, and the CMS’s Interoperability and Patient Access rule. The result is a reckoning throughout the country’s healthcare infrastructure, with a need for rapid changes and new thinking.

Everybody might be in the red right now, says RED Team member John Winenger, a veteran healthcare executive. “But how much is going to come back is the big question that everybody’s rapidly trying to assess.”

We spoke to Winenger and Michael Kreitzer, an expert hospital Interim CIO, about the biggest challenges providers and hospitals are facing, where healthcare goes from here, and the moves organizations can make—including bringing in outside help—to get out of the red and back into the black.

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What are the Benefits of Interim Managers?

The only certainty in business is change. But change is accelerating, less predictable, and increasingly, beyond the control of organizations. As technology and unforeseen events continue to drive exponential change, businesses that can’t keep up risk being left behind.

Companies struggling to generate growth and stay relevant amid rapid transformation often look to new leadership. A growing number of companies are also looking to a different kind of leader—one who specializes in change and embraces the challenge of helping companies solve their biggest issues. Enter the interim executive, a new breed of on-demand leadership that brings outside perspective, cutting-edge thinking, veteran experience, and a laser focus on results.

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How Company Owners Can Still Win in the Current M&A Market

The COVID-19 pandemic and global economic lockdown has seen merger and acquisition (M&A) activity plummet. From $3.9 trillion in global takeovers in 2019, announced deals plunged 51% in the first quarter in the US according to Refinitiv. Uncertainties in the business and capital markets have led to buyers delaying or cutting back on their acquisition plans. But with crisis comes opportunity. Those able to navigate the new risk landscape may find compelling deals on the other side of the pandemic. Now more than ever, expert help with strategic planning, modelling out “what if” scenarios when the world frees up from lockdown, and preparing better for post-acquisition merger integration can help owners succeed in acquiring or being acquired.

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The COVID Battle on the Manufacturing Floor & The Future of Our Global Supply Chain

The reach of coronavirus in the manufacturing sector has been vast. A survey by the National Association of Manufacturers revealed that 78% of manufacturers anticipate a financial impact, 53% foresee a change in operations, and 36% are experiencing disruptions in their supply chains. The Federal Reserve reported that in March production fell 6.3% in the manufacturing sector – the largest drop since 1946. This has everyone asking what the short and long-term impacts look like as major economies around the world seemingly come to a halt to curb the spread of the virus.

Manufacturers everywhere are running into cancellation of exports, delayed payments, and disruptions in logistics. Economist Larry Hu told Bloomberg “The worst is yet to come for exports and supply chain. For the whole year, China’s exports could easily fall 10% or probably more.” Meanwhile the world is grappling with how to deal with supply chain break downs and inventory shortages of critical medical equipment. The US government reportedly has almost depleted it’s emergency stockpile of masks, respirators, gloves, and gowns.

Still — essential companies such as ones producing food, medical supplies, or supporting necessary infrastructure and distribution of supplies are up and running. Leaders of these companies face a whole new realm of challenges as the health of workers and creating and maintaining a safe environment become top concerns.

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Strategy Focused CEOs See Growth and Opportunity Even in Crisis

While many companies are facing new challenges and increasing volatility, we’ve found that most leaders’ responses and outcomes tend to be unique. While quarantined with COVID-19, Todd Herman, author of The Alter Ego Effect, decided to interview 29 CEOs to hear how they described their circumstances.  

Each company was experiencing a downturn. Herman analyzed each CEO’s word choice and language to see how they were reacting, noting the importance of a leader’s pronouncements: “words create reality.” He saw big differences in how executives were wired and reacted to the economic rollercoaster. His findings led him to divide the CEOs into three groups:

Fear-Focused CEOs – emotional, concerned, and overwhelmed. Tended to use negative future pacing words like ‘struggle’, ‘fear’, ‘hard’, or ‘difficult’. Spent the most time watching media or finger pointing rather than what could be done.

Unfocused CEOs – dismissive, uncertain, wait and see. Talked about getting a plan, but tended to use the word ‘plan’ in a negative or needs-based way.

Strategy Focused CEOs – take and use what’s given, focused on growth/opportunity. Positive. Spending time leaning into networks.

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