Despite creating effective succession plans, many businesses may find themselves met with the immediate need to fill a CEO or top executive role. While they will want to hire a CEO as quickly as possible, that process can often take months. Who’s going to steer the ship in the meantime?

This is when hiring an interim CEO can be a smart short-term strategy, turning a challenge into an opportunity to make some quick fixes before the permanent CEO arrives.

Interim leaders can be invaluable when a business is facing change or needs a fast turnaround, giving support when you need it most. They can work with the executive team to support specific projects, implement cutbacks and closures if necessary, and have the skills and experience to manage a business through a crisis. In this article, we’ll look at reasons you might need to hire a CEO temporarily and why appointing an ‘acting’ CEO might be the wrong move. We’ll also examine how to hire a CEO on an interim basis, and all the ways they can add value to your business.

When should you hire an interim CEO?

There are a few common scenarios in which you might want to hire a CEO to step in on a short-term assignment— for example, if your business needs a fast turnaround. Underperforming businesses need to effect change as quickly as possible, and hiring a CEO on an interim basis means you can initiate a transformation plan and do what needs to be done to improve the current situation. Likewise, if the previous incumbent of the role has been problematic or incompetent, an interim can step up to quickly win back hearts and minds and get the ship back on course.

If a business has made an acquisition or is moving into a new market, they’ll want to put leadership in place right away, but they might not have the right internal talent with the capacity to step up. Similarly, a business facing new market conditions can temporarily hire a CEO with the right expertise to support the leadership team in a short-term or mentorship capacity to help the business weather the storm.

Finally, if your leader has stepped down unexpectedly, the smart move is to hire a CEO working on an interim basis who can lead the business in the short-term. This buys you valuable breathing space because there’s no immediate rush to find a permanent replacement.

The strategic wins: how to hire a CEO on an interim basis

The business benefits of hiring an interim are clear. It’s a wise strategy, as it often takes months to hire a CEO, and with the pace of business today, every minute matters. Here’s what an interim could offer your business:

  • Stability during times of change
  • Ability to leverage expertise to solve organizational challenges
  • Breathing room while you find and choose a permanent successor
  • Fresh perspective and independent, critical thinking about your business
  • Insights on who would best fit the permanent role, from someone who’s been there
  • Ability to try out a different leadership style, without a long-term commitment

Acting vs interim CEO: what’s the best approach?

For many businesses facing the challenge of temporary or sudden vacancy in the C-suite, it can be tempting to appoint an internal candidate to take the role of “acting CEO” and cover the role until a permanent replacement can be found. For example, a company may task the CFO with covering the CEO role for the time being.

Although convenient, this is a short-sighted strategy. Choosing an acting CEO instead of an interim may provide a false sense of security— an acting CEO already has a day job, presumably a demanding one. Are they going to be able to cover both roles effectively? How will their team handle the additional burden? What will fall through the cracks, both in their typical job and the role they’re trying to fill?

Yes, an acting CEO is effectively ‘free’, but at this top level, the opportunity cost is too great. What happens to growth and direction if the leadership is stretched too thin? Companies cannot afford to have their top leaders splitting time and attention. Organizations need full focus to keep moving forward, and not lose a bit of momentum. That’s where hiring a full-time interim CEO delivers a solution.

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What’s on an interim’s to-do list?

There’s no reason to stand still while you’re in the process of hiring a permanent CEO. Interim leaders can be a powerful strategic asset, whipping your business into shape so the permanent replacement is set up for success. Here’s what you can hire them to do:

Drive transformation and growth

Whether your company wants to grow organically either through acquisitions or moving into new markets, the right interim executive will have the experience and knowledge needed to develop a growth strategy and implement it.

Implement cost-cutting measures or closures

If a business needs to quickly turn things around, making major organizational changes or sharp cost reductions, an interim may be the solution. The right candidate will bring expertise (which may be lacking internally), and fresh ideas to the table. They can analyze where the problems lie, drive change and implement new ways of working. And they can pave the way for the permanent leader to come in and take the reins once the company is on the right path.

Stabilize the business and maintain morale

As the new public face of the company, an interim CEO has an essential role as a stabilizing force. They can clearly communicate what’s happening to employees, shareholders and the local community, listening to any concerns and protecting against a loss of confidence and morale.

Support specific projects

If a business is planning major organizational change, such as implementing new business systems or entering an IPO process, an experienced interim executive will have the specialized know-how to push the project through successfully.

Provide insights

One clear benefit interim CEOs can bring is that they are able to be more objective than perhaps an internal candidate might be, because they don’t have a history with the organization. Similarly, they’re less likely to get embroiled in any corporate politics. They are a fresh pair of eyes and can bring a new perspective to any challenges your business might be facing. And they will gain important insights into the skills and capabilities their permanent replacement will need to succeed.

It is important to remember that it’s not the role of interim CEOs to set long-term strategies or initiate a transformation agenda. That’s a task for their permanent replacement. As interim caretakers, they are there purely to steer the ship while it’s needed, score some quick wins and establish stability, without overstepping boundaries.

Take the next step towards your interim placement today

Interim CEOs can be a catalyst for accelerating change and ensuring your organization meets milestones and deadlines, helping you to accelerate change and move forward with speed, confidence and precision.

When looking for interim talent for the highest levels of your organization, you want to ensure you’re working with a partner who knows the interim space on a macro scale and has access to a vetted global network of leadership talent.

Your situation is urgent, and a interim search partner will be able to take the search and administrative burden from your team and have an interim in place in a matter of days. Make sure your search partner understands the scope of the challenges your business is facing and the potential solutions – and isn’t only focused on quickly filling the current vacancy.

This article is an excerpt from Interim CEOs: Big players, fast. Download the complete eBook to find out everything you need to know about interim leadership.

Want to find out more about our interim leadership practice? Get in touch with our team.

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