March 26, 2024

The Six Times PE Funds Use Interim Executives

The Six Times PE Funds Use Interim Executives

Many private equity funds hear the words “interim executive” and think the only application is an Interim CEO or CFO for turnaround or short-term fill-in of a portfolio company. But PE funds seeking a great return look to interims for their unique abilities to build and transform companies.

An Interim CEO brought on to lead a recently acquired private equity portfolio company, for example, may match the hold period of the fund. That could mean several years of working to build, grow, and ultimately exit the company, hitting big returns for everyone involved.

Here are six major use cases for an Interim CEO, Interim CFO, or other interim executive in PE-backed portfolio companies:

1. Interim Executives in Diligence

Most funds hope to spread their wings and work beyond industries where they’ve already had success. In looking at new industries where acquisitions may cost less and produce higher returns, a little more diligence is often needed. The further afield a fund goes, the more they need expert leadership removed from prior operating teams.

We recently matched a $5B+ fund with an Interim CEO expert in e-commerce and consumer goods to help determine if a potential acquisition made sense. While the fund had deep experience in the manufacturing space, understanding the current challenges and opportunities to expand go-to-market strategy was essential. Once the deal closed, the executive transitioned into an ongoing advisor role to ensure the acquisition would be a success.

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March 14, 2024

Family Business Succession Planning Checklist: 6 Important Questions to Ask

Family Business Succession Planning Checklist: 6 Important Questions to Ask

Nearly all (98%) US companies that responded to PwC’s 11th Global Family Business Survey say they have some form of governance policy in place. But, just what “governance policy” means varies widely. It could be anything from a shareholders agreement (75%) to conflict resolution mechanisms (22%).

In addition, the survey found that 78% of respondents say that protecting the business as the most important family asset is their top goal for the next five years and 72% want to ensure the business stays in the family. Despite that, in 2021, only 34% said they had a robust, documented, and communicated succession plan in place.

Perhaps it shouldn’t be all that surprising that so many family-owned businesses lack a formal plan. Creating a succession plan requires having difficult discussions around emotionally fraught family dynamics:

  • Should your son or daughter be groomed to take over the helm, or should it be a non-family member?
  • Should you just sell and split the proceeds?
  • What if the company you founded and devoted your life to building goes in a different direction once you retire?

Despite widely quoted statistics that say that only 30 percent of family businesses successfully transition to the second generation and only 13 percent survive through the third generation, a Harvard Business Review report says that is not true.

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February 28, 2024

Business Exit Strategy Guide for Owners: Intro

Business Exit Strategy Guide for Owners: Intro

When you were growing your business, filled with an overriding sense of potential, did you also start thinking about your exit plan?

Likely not. And with good reason. Entrepreneurs, business owners, and boards of directors are enthusiastic about their potential for success. They aren’t thinking about that moment when they are ready to retire. Or move on to a different business challenge. Or want to while away the days on a desert isle, sipping margaritas and reflecting upon their many successes.

But that day has come for you, which is why you’re in need of an exit strategy for your business.

We’re here to help.

Our six-part Business Exit Guide for Business Owners is the place to start your journey to the next chapter of your life and business.

Here’s what we will cover:

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February 27, 2024

The 6 Biggest Business Mistakes and How to Fix Them

The 6 Biggest Business Mistakes and How to Fix Them

Interim executives, by definition, come into difficult situations, assess them quickly, and create a plan for success. That means they have a front-row seat to the most common business mistakes companies make in the areas of leadership, operations, human capital, strategy, business finances, and change initiatives.

Focusing on these fundamental business needs is a good starting point for any struggling business.

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December 8, 2023
Robert Jordan

3 Things Companies Can Learn from How Private Equity Firms Work to Maximize Value

Robert Jordan | CEO, Association of Interim Executives
3 Things Companies Can Learn from How Private Equity Firms Work to Maximize Value

Private equity firms have a simple recipe for making money: They identify companies they believe are undervalued, improve those companies, then sell them for far more than they paid to buy them in the first place.

Knowing how private equity firms work can serve as a roadmap for any company looking to improve operations and maximize value.

Start with these 3 things PE firms do following an acquisition in the lower middle market ($2-$15 million in EBITDA) to improve your own bottom line, whether you plan to continue operating your business or want to ready the company for a future PE investment.

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May 5, 2023
Walter Simson

The Speech All New CEOs Should Give

Walter Simson | Interim CEO, Turnaround

I once took one of those business simulation courses. In it, we were given a computer terminal, an inbox, and a walkie-talkie. Our simulated company, Acme Widget, was said to be in trouble, and the point of the exercise was to evaluate our crisis management skills. There was a team of psychologists who were looking for leadership and other soft skills that might help us do well during a pressure-filled day.

The fellow who had been chosen as simulated CEO of our team was an up-and-coming executive in a Fortune 100 company. He was clearly acting as CEO in the exercise because his company had indicated he had so much potential.

The psychologists asked the “CEO” to give his motivational speech as the simulation began.

The CEO said, “Our job is to grow revenue faster than expense. Now get to work!”

That was it.

Would it surprise you to hear that Acme Widgets did not survive the simulated crisis? The emails flew, the disasters proliferated, and the team fell apart. I thought then, and I still believe, that the CEO’s speech could have made a big difference in how our team performed.

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April 7, 2023

Seeing with New Eyes: Cross-Pollination in Business Has Advantages

Seeing with New Eyes: Cross-Pollination in Business Has Advantages

When a company is in need of new leadership, chances are the board and CEO are going to enlist a search firm that will comb through the same old group of people in search of that new leader. They will search for someone who has served in that job at a similar type of company and almost always in the same industry.

It’s the way the business world works.

But is it always the right approach? Not necessarily.

Instead, Lloyd A. Perlmutter, a C-suite executive with years of experience leading businesses through exceptional growth curves, says cross-pollination in business — hiring executives outside of the industry — can be the way to get the kind of innovative ideas that spark innovation and disruption.

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February 14, 2023

2023 Predictions: Business Trends Accelerating Need for Interim Executives

2023 Predictions: Business Trends Accelerating Need for Interim Executives

Every new year means new challenges and new opportunities. This new year, 2023 is no different! When we asked 204 C-level executives for their 2023 predictions, their responses reflected five clear business trends:

  • A surge in executive retirements and leadership departures
  • Ongoing workplace changes
  • Continued supply chain challenges
  • Technology needs
  • The looming threat of an economic downturn

Let’s take those one at a time.

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December 21, 2022

12 Secrets to Family Business Success

12 Secrets to Family Business Success

There are some family businesses that have been around for 100 years and continue to thrive under the leadership of 5 or more generations. But they are rare – as rare as a child who loves basketball making his way to the NBA.

So notes John Messervey, an organizational behavior consultant who counsels high-wealth families through very difficult conversations about their family dynamic, their family business, and their hopes for the next generation.

His years of experience working with family businesses and entrepreneurs led him to develop these 12 lessons for family business success:

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March 21, 2022

Business Exit Strategy: Owners Neglect at Their Peril

Business Exit Strategy: Owners Neglect at Their Peril

InterimExecs founder Robert Jordan learned early the tremendous weight an entrepreneur must bear: “When you own the company, it’s nothing like being an employee,” he writes in exploring the sacred trust of ownership. “You might as well compare lifting up a hundred pound weight versus a feather.”

Jordan, who founded his first small business at age 26 and “hit every speed bump you could possibly think of, and then a couple more just for creativity points,” has learned a lot along the way. Among the most important lessons: while business exit planning is critical, it is usually neglected – at the owner’s and board’s peril.

Alejandro Cremades, author of Selling Your Startup: Crafting the Perfect Exit, Selling Your Business, and Everything Else Entrepreneurs Need to Know, agrees. He says that a company’s management team must add “crafting an exit strategy” to their business goals.

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