What are the facets of Interim Management?
The contracting of Interim Management services can be associated with certain specific circumstances of a company, in which this type of solutions are perfectly adapted, both functionally and economically/financially. We are going to carry out a high-level analysis on each of the most common circumstances, where this modality of hiring executives is applied.
The afore mentioned circumstances are the strategic problems of a company that require a professional profile whose vast experience, knowledge and skills allow with zero margin of error, to solve them.
Even when they have several common characteristics, the problems must be approached from different angles:
- “Temporary position coverage”
It’s a very special modality of Interim Management since it only has as its objective, to cover a strategic position temporarily by a license of the current executive or a replacement of the same by a new person who takes said position permanently. The type of profile for these needs is very varied, since the requirement is usually to cover the position of one of the leaders of C-Level.
In most cases, companies do this coverage with someone from the same organization, but when they lean towards an Interim Management, it is because there are no internal capabilities, or you want to try this new profile and the possibility of transforming it into a permanent executive.
Except for this last case mentioned, the professional must maintain the status quo of operation of the company, that is, not innovate until the person who takes the position permanently is incorporated.
- “Operational and performance improvement”
When the need is an operational optimization of the company, it’s sought to incorporate the specific C-Level profile where the lack of efficiency in the organization has been detected or where definitely, it’s necessary to incorporate non-existent skills to strengthen a certain area and prepare a new permanent executive.
The interim profile hired under this alignment is usually an executive with a lot of experience in that area and in the same or similar industry, very focused on the specific function to be covered, for example, Manufacturing, HR, Finance, Technology, Commercial, Marketing, etc.
In the case of being the position of CEO, most of the time, the role of the Interim Manager is based more on the coaching of a current executive, to advise him on the adjustments of the direction of the operation and the performance as a whole.
If the situation were that the contracted function had to make major adjustments, we would already be talking about the restructuring edge, which we will addressed later.
- “Crisis management”
Here we already enter profiles of executives who’re not very good at managing in short terms, but also highly specialized in crisis management, which entails an additional seasoning to consider, which is a complementary experience of the Interim Manager.
A good executive has incorporated in the daily development of its functions, the prevention of potential events that generate eventual crises. If a company enters a crisis, it is because there were no adequate or preventive controls for this purpose, in addition to negligence or lack of experience on the part of the executive in charge of management. When a company is already immersed in the crisis, it affects the entire organization, which has a comprehensive impact that must be properly managed.
This means that it’s necessary to resort to an executive who can’t manage a change or an improvement in the company, but must additionally solve the crisis itself, from its root to its consequences, and most of the time, must reverse engineer, first solve the consequences or potential greater implications for, in parallel, to be able to manage the root changes that allow to leave it. Generally, these processes involve periods of 1 to 2 years of intense work, and of implementing a complete restructuring of the company.
“The hiring of Interim Managers for restructuring occurs, in 74% of companies that are already in serious problems, while in the remaining 26%, it is done in organizations where the restructuring is planned, preventive or by decision of the board of directors to generate a business transformation.”
- “Restructuring”
Interim Managers, specialists in company restructuring, have a very special experience, since any slogan of this magnitude requires change management skills in an integral way in the organization.
Taking some international parameters, the hiring of Interim Managers for restructuring occurs, in 74% of companies that are already in serious problems, while in the remaining 26%, it is done in organizations where the restructuring is planned, preventive or by decision of the board of directors to generate a business transformation.
In all cases, the new manager must immediately determine the economic-financial situation, the equipment with which he has, the operational and commercial situation. From there, it must define short and medium-term plans considering the critical paths and contingencies, stipulate the team with which it will carry out those plans and agree in detail with the board of directors, as well as the expected effects to reach the objectives.
It is always necessary that all this is properly documented and approved by all responsible parties, since once the restructuring process starts, there is no going back.
- “Merger & Acquisition”
In this, the figure of Interim Management is widely used, mainly in acquisitions. Why? There are several causes and all of them are intimately linked, the first of them being that, in an acquisition, the initial face of taking control of the new company is a very complicated and exhausting stage.
The greatest wear and tear in these operations is obtaining information on the current status of the company with the outgoing owners and having an Interim Manager experienced in this type of work and who knows the local culture, is a very efficient process.
It also allows the buyer to avoid unnecessary wear and tear until the closing of the reception of the business with the previous owner, as well as to take the necessary time to make the selection of the candidate to occupy the position permanently.
In international purchase operations, it’s usual for the acquiring company to have as internal policies, to place a local CEO, so the use of an Interim Management function is essential for the entire initial process of Due Diligence and takeover of the acquired business.
In this way, the Interim Manager will be able to carry out all the transfer of knowledge to the new selected CEO and provide him with a more comfortable start of functions with the path paved towards the organization, having avoided the initial wear and tear.
Ideally, this type of profile should have experience in this mode of operations, in very short periods, high demand for obtaining information and detecting potential future contingencies, as well as negotiation skills in environments with a high level of expectation and uncertainty. of the members of the organization being acquired.
- “Start-ups or Companies at a turning point.”
To analyze this point, it’s worth commenting, that an entrepreneur does not always have the skills to also be a good business administrator. That is why, in many cases, at a certain time of a start-up, it is necessary to make a change in which the entrepreneur takes a role of shareholder and cede the executive management of the business to a good administrator.
In many cases an Interim Manager is hired in the role of CEO with experience in carrying out this new business and over time, it’s defined through a selection process, who will be the permanent CEO.
This is good for a start-up because many times entrepreneurs do not have the experience in defining the ideal candidate to occupy the position of manager of the company, thus being able to better define the profile of the person they would like to have at the head of their business.
On the other hand, there is the case of many companies that have exponential growth, and reach a turning point, in which the manager in charge does not have the capabilities and/or skills to continue doing so, and at the risk of a failure in that process, it’s a good alternative to incorporate an Interim Manager as a coach of the same or to take the reins of the business.
“It’s imperative to achieve good empathy with the board or shareholders of the company, to maintain a link that allows the development of the transformation project with the appropriate support and consensus, considering that in many cases, you must make decisions that do not please many people, but that they are essential when it comes to saving the company.”
In all cases, I haven’t developed the analysis regarding the personal imprint of each type of Interim Manager, but beyond the experience, knowledge and skills, it’s a factor that plays an important role in the development of the function.
Undoubtedly, it’s imperative to achieve good empathy with the board or shareholders of the company, to maintain a link that allows the development of the transformation project with the appropriate support and consensus, considering that in many cases, you must make decisions that do not please many people, but that they are essential when it comes to saving the company.
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