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With disruption, growth, and transformational challenges mounting, organizations are turning to “interim” C-suite leaders to navigate these transitions.
Firms risk heavy losses or even extinction if they don’t bring in experienced hands skilled at fast-paced change.
There’s a growing group of leaders with specific skill sets to address a company’s specific issues or launch a project.
Damon Neth has an extensive history in the C-suite; it just happens to be with a lot of companies.
A self-described transformer, Neth was the chief information officer of a consumer products company and helped install a software and digital strategy that doubled the firm’s sales. He was the CEO of a Texas-based sporting goods firm, where he revamped the firm’s entire approach on inventory, allowing it to sell hundreds of thousands of units annually with only two full-time salespeople. And he was CIO again at a New Jersey-based electronics retailer, ensuring that a $5 million IT upgrade was completed within six months after the full-time CIO left.
Each time Neth was called in because a company had reached a breaking point, in need of major transformation, and not sure how to go about doing it. “Those are the types of assignments that come my way,” he says. “They don’t have the skill sets to lead large-scale, one-time transformations.”
Welcome to the world of the “interim” leader. Once a rarity brought by bankruptcies or some other special circumstance, and often thought of as a thankless, powerless role, specialized and short-term leaders are being urgently called upon to get companies through turbulent times. It’s where a breed of seasoned executives across a wide variety of industries are finding a new role, parachuting in, solving a particular problem, and then leaving, all in less time than it often takes for a full-time executive’s retirement plan to vest. As much as companies are breaking down projects into bits that can be automated or outsourced, some are reviewing their leadership roles and wondering if they can do the same thing. “An interim leader is one of the most valuable yet unexploited resources for building organizational health in the modern era,” says Neil Grant, a one-time interim leader and now a Korn Ferry client partner in the Transformational Leadership practice.
The best interim leaders have a specific set of traits and experiences that can help them solve a major corporate issue, and an overwhelming desire to not be the boss when things get back to status quo.
Hiring an interim leader isn’t particularly common in the United States. Indeed, if an organization places an interim tag on a leader, it often is viewed as a somewhat lesser title. But across the Atlantic Ocean, interim leaders are considerably more common. The 2014 Institute of Interim Management Survey suggested that there are 16,000 interim leaders based in the United Kingdom alone.
The practice, experts say, began in the Netherlands several decades ago as a response to some onerous hiring rules. If Dutch companies wanted to fire permanent leaders, they were obligated to give long notice periods and pay hefty severance packages. So, companies began hiring managers on a temporary basis. The practice spread gradually across other parts of Europe, often when recessions occurred and the number of unemployed but experienced executives rose. But the practice stuck around even as the economies recovered. Today, 70% of the interim leadership business in Europe is linked to some sort of change operation.
The practice isn’t completely unknown in the United States, either, particularly in the technology industry. Indeed, the practice is sometimes called “rent-a-CEO.” One of the more well-known rent-a-CEOs was Philip Monego, who ran a firm that assisted multiple start-up firms in Silicon Valley in the late 1980s and early 1990s. In 1995, Monego met two young engineers who had just gotten $1 million in venture capital funding but needed a lot of help turning their idea into a real business. He signed up to be CEO and stayed six months, helping formulate the business plan, making some key hires, and in general got the company ready for a public stock offering. Monego was already gone by April 12, 1996, the day Yahoo’s stock debuted. He’s gone on to be an interim CEO two more times in his career.
But interim leadership may be poised for growth far beyond tech. US firms face more disruptions than ever before, coming from areas all over. Plus, there are more complexities to consider, business models to reinvent, and strategies to implement. Companies find themselves needing experts who can successfully navigate these often-tumultuous phases. Korn Ferry’s Grant himself has experience in this: In 2009, when the Saudi Arabian arm of British Aerospace needed to reinvent the way it developed high-potential leaders and create an overarching leadership-development architecture, he came in as interim chief learning officer. Within six months, Grant had created a learning and development framework, revamped the high-potentials program for Saudi National leaders, designed new leadership-development programs, revised the firm’s performance management system, and built a new team. “I could deliver something that could make a difference,” says Grant. “I could be influential for a period of time and move on, then let someone else maintain it.”
At the same time, the traditional world of work—with its huge job hierarchies and longstanding leaders who have been with the organization since college—is fading away. Firms are already adjusting to a whole generation of millennials who don’t view staying at any one firm as an asset. At the same time, the tenure of permanent CEOs is, on average, only about seven years, nearly half the tenure from the 1990s. In the minds of some, taking the step and seeking out interim leaders who are brought in to solve specific business problems isn’t that far of a reach.
According to Korn Ferry and others, interim execs need specific business problem-solving skills, as well other abilities and behaviors to succeed in their assignments. “The executive has to be very good at speaking truth to power,” says Bob Jordan, head of InterimExecs. That may sound obvious, Jordan says, but many times interims are brought in because something is not working well at the firm. That type of transparency has to flow downward as well, says Neth. “People have to see that I’m here to help. I talk about why I’m there, timeframes, concerns, how everyone can help.”
Interim leaders also need to show high degrees of organizational awareness and emotional intelligence, often wrapped up in a large dose of “business savvy.” Interims may have experience in solving a specific problem, but they have to be able to tailor that to whatever organization they’re going into. Most leaders will do research on the organization they are entering before they join, but that goes double for interim leaders, Grant says. Interims are expected to hit the ground running and answer difficult questions such as “How can I align every employee behind a single company culture?” or “What do we need to adopt a digital strategy?” Once in the organization, interims quickly have to determine who has the power and suss out the informal networks to win allies and get things done. “One of the biggest mistakes an interim leader—or any leader for that matter—can make is to focus his or her professional energy on delivering outcomes without investing equal or more time building relationships and managing stakeholders,” Grant says.
Ultimately, interim leaders need one final, critical asset: to know when to leave. That isn’t just a matter of contract length but leaders’ self-awareness about themselves. Many organizations realize that some interim leaders are “change junkies” and that they need to develop longer-term resourcing strategies once their transformational work is done. It’s one of the things Neth worries about most. He estimates that he’s spent 47,000 hours helping organizations transform tech processes over a 12-year span. It would be easy to just stick around waiting for something else that needs fixing, but all those transformations, he says, have changed him. “I want to help the company grow, and mentor and coach the executives about business best practices. When that’s been solved, I’m just ready to leave.”
For more information, contact Neil Grant at email@example.com.