Interim management as a possible solution during challenging times
As it is well-known, there are the ups and downs in the life of a company. Either way, there can occur a situation, where the restructuring of our business model becomes necessary. This can be a consequence of an internal factor, like a rapid growth-period, after which a new organizational architecture should emerge, or an external one, such as a global economic recession. It is worth noting, the latter case not only poses a threat but means also an opportunity, as giving a better answer to a crisis provides a great advantage over our competitors.
What is interim management?
Interim management is a way of facing situations described above. No surprise, it got more popular first during the 1970s, the time of oil-shocks. They created a situation, where new and unique practices where necessary to be implemented to secure the survival of a company.
But what is interim management (later on ”interim”) exactly? From an etymological point of view, the latin word interim meaning „meantime” implies something temporary. Broadly speaking, the interim’s definition is a temporary, outsourced provision of management skills from an actor with high expertise for a limited time period. The interim manager can step up as an acting director of any area of a business, depending on its previous experiences.
When should you hire an interim CEO?
As an example, an interim CEO can be necessary when a CEO is retiring after a long career at the company. As a consequence of the interim manager’s high expertise and previous career at a listed company, he or she can get through the company this period, until someone can be chosen and trained from the company to assume his or her role.
In general, an interim CEO, due to his/her outsider background, is more likely to find systemic problems and fix them. He/She can suggest new, less-known solutions for certain problems based on his/her widespread experience, which would improve the competitiveness of a company.
How does interim management work?
As it was stated above, it is also possible, that only a particular department of a company is driven by an interim manager. For instance, having an interim CFO is a quite common practice during a changing period. It allows the company to clear its finances out, and after that with a more stable background engage in new ventures.
Probably the key factor behind the success of interim managers is the difference in their working conditions with acting managers chosen from the company. Interim managers’s goal is to provide the best, measurable outcome (revenue, operating costs etc.) within the shortest time period. This constellation secures that the interim manager operates exclusively on a professional basis, without taking into account personal-biases or having further ambitions in the given company.
This is how we work at MB Advisory
Interim management can be a solution in many different business situations. Accordingly, in our daily practice we are helping in a wide range of cases when internal processes does not seem to work as they used to be.
We see companies seeking assistance after the resignation of a previous manager, while the incoming one is having an (intermittent) problem with acclimation to the company’s environment. Furthermore, interim management is pursued when a challenging period rises, such as an investigation of a company by the Tax Authority or a cooperation with a Big Four company.
In general, our experiences are showing that interim management is worth considering if the restructuring of a company is happening, including special cases like mergers. In addition, interim management can be beneficial in a situation of increased competition, like a penetration into a new market, when cost reductions for increasing competitiveness are crucial.
As a minimal duration, the cooperation with our clients takes about 3-6 month to address the problems an interim management faces. On average, interim managers are kept in their position for a year respectively, but in certain cases this might last longer, up to 3-4 years.
