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? Maybe bad product is being shipped, resulting in customer complaints – or silence. Either way could result in an account being lost forever. “These are real serious problems that you have to address within the first 90 days,” Charlie says adding that it is important to have a period of orientation, evaluating, learning, and taking corrective action on things that are broken. “It was your predecessor’s problem until you came in, but after 90 days, it’s your problem. You have to do something about it.”
Phase 2: Immersion (Day 90 – Month 9)
The next phase is six months or so of immersion, where an interim executive is gathering lots of information about what is working and what isn’t working in a company. For example, an assessment of people skills is key to determine what people are in the right position versus the wrong position. “What skills do we not have in the company that are critical to success going forward?” asks Charlie, who often focuses on getting A-players in the right positions. He gives an example of a company where he was successful in recruiting top notch VP’s in sales, manufacturing, and engineering. “We had to be much more disciplined in terms of having a process for establishing milestones, timelines, and budgets for developing new products and also adding the enhancements to those products, which the customer would expect us to do over time,” he recalls. “There was a lot of emphasis on getting the right people and processes in place.”
Phase 3: Reshaping (Month 9 – 18)
After immersion, an interim executive will spend a length of time from month nine to month 18 leading major changes. “You start making the changes that are really critical for the long-term success of the company,” says Charlie. “That’s the period of major change.” During this phase, an executive might lead major initiatives such as:
- Company expansion (new product launch, global expansion, M&A)
- Upgrade your technology (ERP implementation, technology roadmap, outsourcing)
- Revenue generation strategies (sales process, creation of a brand and marketing platform)
- Process improvement (supply chain management, manufacturing controls, systems improvement)
- Financial optimization (financial reporting, budgeting and forecasting)
Phase 4: Consolidation (Month 18 – 24)
Finally, its time to consolidate. You look back to see what’s working, what’s not – then make the necessary adjustments. By now major changes have not only been identified, but implemented and refined. A company may be ready for point of exit or transaction, or the keys can now be handed off to a permanent executive who will continuously refine, focusing on a new three or five-year plan, rolling out new products, new technologies, etc. In most cases, the permanent hire is not the same executive as the change agent who had the reins in the first 18 to 24 months.
Historically, boards associated interim executives with turnaround. Today more and more interim executives are called in to help take a company through expansion and growth. Whether a private equity based portfolio company looking to grow to a point of exit, an entrepreneur or founder who has reached a ceiling in their growth, or a company looking to expand from one product to multiple to become a stronger platform, having the right people in the right roles, at the right stage of a company’s development is key. “In certain stages of a company’s size one set of skills and experiences may be perfectly adequate,” says Charlie giving an example of scaling to $50 million. “But then to go from $50 to $200 million requires a much different set of skills, and from $200 million to $1 billion another again. Some people are able to add to their skillset and grow with the company through different stages. Some cannot.”
Charlie says especially in a fast growing company, ideally you are promoting from within, trying to train and groom people to accept more and more responsibility as the company grows. Some might not be able to accept more, being well suited in their current role. Others may be ready for promotion. Sometimes there is no internal candidate ready to step up, in which case an outside leader can be the perfect short term solution. This is the world of the growth-oriented interim executive.
**InterimExecs’ RED Team consists of an elite team of operations, technology, finance, marketing, and sales leaders who have built successful organizations and generated rapid growth. To explore how an interim can catapult your company growth, call 847-849-2800.