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When we started matching companies in need with skilled interim executives 15 years ago, the main question people asked was: Why would an executive choose this career path? There’s absolutely no job stability.
Fast forward 15 years. Now we’re in a gig economy. The idea that you can get specialized expertise for what you need right now is expected and common.
Despite that, questions remain. In this interactive webinar, InterimExecs CEO Robert Jordan and President Olivia Wagner go through the most frequently asked questions they hear from company owners, directors, investors, and managers. Or, if you prefer, scroll down for a written summary.
Why Would I Bring in an Interim Executive vs. Hiring a Permanent CEO?
In one unique case – the CEO of a public company has become incapacitated and can’t sign off on financial statements – federal law requires the company to appoint an interim CEO immediately. Oftentimes you see a company slot in a board member temporarily to fill the seat, but in our world, that is often a placeholder. These are not the interim executives we are talking about.
Rather, we represent outstanding executives who are drawn to this kind of work – they have dedicated their careers to the interim specialty. At their core, true interim executives are energized by the challenge at hand. They are true operators, embedding within a team and ensuring that a company will have strong leadership that will keep people moving forward while the search for a new permanent hire takes place.
When is an Interim or Fractional CEO the Right Choice?
Interim and fractional can be interchangeable in terms of the wiring of an executive an organization can draw on. The biggest difference between interim and fractional is the time commitment an executive has to any given assignment.
We often see interims come in when companies are in a state of flux. They might be growing quickly and have reached a point where the current management lacks the skills and experience to move forward. Or the company is struggling and needs a turnaround expert to guide it back to profitability. Many companies require an all-hands-on-deck approach, where an interim CEO is dedicating 100% of their time to the assignment.
Fractional executives on the other hand, will work a few hours or a few days a week. This can be the right choice for companies that aren’t yet big enough to afford a high-powered CEO full time. They can still draw on the deep breadth of experience a fractional CEO brings, and then scale up time commitment as they grow or until they reach the point of hiring a full-time CEO.
Our work is focused on identifying the challenges the company has right now and finding the right leader to meet those challenges. A few months or years from now, the company likely will be ready for a different type of leader.
What’s the Difference Between an Interim CEO, a Fractional CEO, and an Acting CEO?
- An interim CEO serves the company full-time for a defined period of time to lead the company through a project or transition or to keep it moving forward during the search for a new permanent hire.
- A fractional CEO can serve for a longer period on a part-time basis, a few hours or a few days each week and often serves in that role for two or more companies at the same time.
- An acting CEO is someone who steps into the job while a new chief executive is hired. In some cases, the acting CEO will be offered the permanent position.
Titles, however, are only really important inside the organization. It’s a way to communicate to the team what is happening, and who is serving in the role while you grow, expand, or search for a permanent hire. Is this executive keeping the trains running while a permanent executive search takes place, is it a temporary leader who will reset the company direction, or an experienced executive who can guide the organization into the future?
But, Jordan says, “I don’t get hung up on the label when an organization has a need. The question is: Do you have the perfect resource? Can you make the right match between the executive and the need?”
What’s the Average Length of an Interim Assignment?
In surveying thousands of executives we have screened through the years, the average assignment has been 8.5 months. But some contracts are for as few as 3 months and others for as long as 3 years.
The key is that our executives have the integrity to offer exactly what the organization needs. If it needs 3 months, they better not go 3 months and a day. If they have agreed to remain at a post for 2 years, they will not walk off at a year.
On the flip side, if the search for a full-time CEO takes longer than expected, the interim CEO is willing to do what it takes to keep the company moving forward. In some cases, they even stay on for a time to help onboard their full-time replacement.
Will an Executive Truly Be Able to Get Up to Speed and Understand My Business in a Short Amount of Time?
Let’s put it this way: If an executive can’t do that, they’re in the wrong line of business and will not last long with us.
But getting up to speed doesn’t mean on Day 1 they will start ordering people around. Rather, an experienced interim CEO will spend the first days listening. That means spending time on the shop floor, talking to the people who run the equipment and the assistants who have all the institutional memory, all the way up to the management team and the board.
Says Wagner: “We hear execs say the answers are inside the organization and they want to give the team a voice.”
How Much Will an Interim or Fractional CEO Cost?
The way an Interim of Fractional CEO bills out varies widely. It can range from a flat monthly fee to a day rate or even hourly. Some CEOs will have a performance component at play, especially if they are working toward an exit or trying to hit some type of big growth goals. A subset of executives even invest into select assignments. That’s especially true if they are aiming for a turnaround where success can have a big payout for everyone involved.
At InterimExecs, we don’t have off-the-shelf rates (more on that here).
Our wiring is to make the best match on the planet. We’re always saying, “Let’s get on a call. Let’s get in a room and talk.” It’s the best way to assess if the wiring of an executive is the right fit. Is there chemistry to make this match a success?
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Are you ready to explore how an InterimExecs RED Team member can tackle big challenges within your company? Request a confidential call with our team to explore solutions. Or call directly at +1 (847) 849-2800.
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