How To Persuade The Board You Need An Interim
Who makes the decision of whether or not to hire an interim in your organisation? We know from our experience that however convinced an individual director may be of the benefits of hiring an interim, the decision making process is not always plain sailing. In fact there is an increasing trend in the time it takes to recruit an interim manager, as the process could involve many key stakeholders and economic uncertainty means decision makers are more cautious.
Hiring An Interim: Getting Buy In From The Board
In many organisations, hiring an interim requires Board approval. After all this is a senior appointment, albeit a temporary one. This means thinking about this appointment from the Board’s perspective, not just because of corporate need.
If you know that you need an interim manager, but have to get buy in from the Board, what key points should you focus on to get their support? After talking to dozens of client decision makers, there are several talking points that kept recurring when we asked them about discussing interims with shareholders and stakeholders.
#1: Why do we need an interim, can’t we resolve this internally?
Experienced interims are an agile business resource. Some have sector-specific knowledge and expertise that make them better suited to certain situations where their expertise, contacts and experience can be put to the most effective use. Whereas others have more function expertise; a deep knowledge or experience in their own functional area, such as finance, HR, sales, marketing, to name a few examples.
In that context; how likely is it that you will have someone on staff who can be dropped into any situation and start taking mission critical decisions within a matter of days?
Not only do interims bring a fresh perspective, but they come with the desire to deliver, free from any internal baggage or restrictions on their ability to offer a solution from a new angle, and, crucially, implement their ideas.
Interims also provide a knowledge transfer service, to ensure full-time staff are trained in new processes resulting from their work, which is how interims provide long-term value. At times, this may mean hiring a team to create a new division before interims recruit and train the staff that will replace them permanently.
Finally, when looking internally for someone to fit this ‘interim’ role, consider what will happen to their existing role. If you have someone with the skills and seniority, who will pick up their responsibilities while they focus on delivering change or a specific project?
#2: What about working with management consultants?
A valid option, and from a Board’s perspective perhaps a more acceptable one to some extent. Besides cost, which is often more – sometimes a lot more – consultants don’t implement or provide the same training / knowledge transfers that interim managers deliver.
Consultants work on client sites but don’t embed themselves in the culture of an organisation, thereby equipping those they work with or recruit to implement long-term change and growth objectives. Leaving a legacy is part of an interim’s brief, to ensure that once they go the results they delivered do not evaporate overnight but instead the organisation knows how to go forward.
#3: What about the cost?
This is not usually the first question the Board asks, but it is still high on the list when interims need approval from shareholders and stakeholders. This can be contentious especially since an interim manager’s fees may appear to be higher than some senior Board members’ salaries.
In the first instance, organisations need to understand that the interim rate is for a temporary appointment and does not incur the same additional expenses of hiring a permanent member of the team. Unlike full-time staff, interims are self-employed, which means they don’t need golden handshakes, parachutes, stock options, healthcare, other perks, bonuses and tax/NI – all of which add a substantial premium to the expense a company incurs when recruiting an experienced executive.
Secondly, the interim manager is being engaged to deliver on specific objectives that generally can be measured in terms of an impact on the organisation’s productivity and profitability. Once they’ve delivered this, they depart and the company incurs no further costs, but continues to benefit from the changes or programme implemented.
This is just one reason we’ve seen a 93% increase in the use of interims since 2006. (Again, where from?) Not only that but the cost of an interim, compared to consultants or permanent senior level hires places interims firmly in the category of cost-effective.
The cost and time it takes to recruit senior staff, along with the potential risk / cost of hiring the wrong person if a recruitment assignment is rushed, should also be weighed against the benefits of the cost effective rapid deployment of an interim.
The Value of an Interim
Interims work at a high level because they add considerable value. They command day rates appropriate to their experience and ability to solve difficult problems, untie complex knots and work through situations that permanent staff aren’t equipped to fix. Boards that want organisations to survive in challenging and changeable environments should consider interims when management are faced with issues that they seem unable to solve themselves.
The sectors currently showing the greatest demand for interims over the next 12 months include Financial Services (40%), Public (32%) and IT/software (31%), according to information we are receiving from clients.
Increasingly, functional experience rather than a background in a specific sector is proving more useful for companies that hire interim managers. Providing further evidence that interims are creating value that organisations would find impossible to manage internally, thanks to the skills and experiences interims bring to the table.
At Valtus we offer an end-to-end interim management service designed to be as easy to manage as possible. To learn more about our interim management service click here.