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Using short-term execs to handle problems cost effectively
Author: Phil Tuck
A growing pool of experienced ‘interim executives’ is available to help businesses overcome temporary problems, supplement senior management, or help to push a new project through to completion.
THE NATURE of Australian business has changed dramatically in recent decades, in response to worldwide advances in technology and ecommerce, a new emphasis on outsourcing, global export trends, the expansion and diversification of markets and a focus on growth through mergers and acquisition. The result is significant changes in management styles, working patterns and employment trends, tending more towards short-term projects and leading to a boom in part time and temporary positions.
The main positions for which these executives have been used include:
Interim executives tend to be mature, experienced problem solvers with a track record of success in senior management roles. They enter companies to provide immediate leadership support and guidance in the absence of a CEO, director or senior manager, either to maintain ‘business as usual’ or to implement change management initiatives.
They can direct or facilitate specific projects, mentor new directors or supplement an executive team during expansion programs, relocation, major systems implementations, public flotation and mergers or acquisitions.
They tend to be proven practitioners with specific hands-on experience and a track record of successful management achievement in companies of different sizes.
Often they are people who have decided, for diverse reasons, that they no longer want a full-time corporate role. They enjoy the challenge, variety and focus that a short-term assignment gives them, often in the most demanding of business situations.
They are usually deployed in a range of roles within an organisation, at short notice, for a defined period of time or for a specific assignment or project. The following circumstances can illustrate the type of situation where short-term executives can assist businesses.
Holding the fort: Let’s assume a senior executive leaves the company, either permanently or on medical or maternity leave. Whether the departure was planned or not, you need immediate leadership in that role. In this situation, an interim executive can act, for example, in a ‘caretaker’ role to maintain business as usual, and provide objective advice and assistance if you decide to redevelop the position description or scope.
Project leadership and support: You have a major project to complete and you do not have anyone available at the right level to lead it. Or you need a particular set of skills that are not available within your organisation. In this situation an interim executive can inject senior leadership and facilitation skills to ensure that the projected benefits are realised.
Supplementing the executive team: Your company is growing or you have seasonal peak workloads. Perhaps you are involved in a merger or acquisition and you need your key executives to devote significant time to that task. You may also need quick access to specialist skills not found among your existing management team. You cannot afford additional permanent executives and do not need them for the longer term.
Business assessment: You need an objective review of the performance of your business, or a particular function within the business. Maybe it is under performing; perhaps it needs to expand into new services or markets or it needs new management.
Possibly there is nothing wrong at all. You just want to identify ways to add value to a business that is already doing well. You do not want to hire a management consultant because you want the job done by someone who has worked at the frontline of an organisation. In this situation an interim executive can provide an independent and pragmatic assessment of the function or organisation and recommend and implement practical improvements.
Identifying the right short-term executive Prior to engaging an interim executive, there ought to be a detailed briefing session to understand the position’s managerial and budgetary responsibilities and your corporate measurements of success.
After the qualification process, a shortlist of recommended candidates is presented. You will receive an executive profile on each interim including an assessment in respect of the particular assignment’s needs, their career history and achievements, personal details, reference information and remuneration details.
You are given ample opportunity to assess the candidates through interviews and any subsequent discussions. Once a candidate is selected, additional reference checks may be required and the terms of the engagement are negotiated.
Remuneration is generally on a daily rate basis with a specific time-frame in mind in order to ensure budgetary guidelines can be met.
To ensure smooth transition into the company, it is recommended that you appoint a contact person for the executive to orient them to the corporate culture, day-to-day office procedures and other significant staff with whom they will be working. You receive regular reviews and a full debriefing at the end of the assignment.
Author: By Paul Smith
With a fairly high turnover of CIOs in the Australian market and the ever-present pressures of a full-time executive role, a move into the interim market could be worth considering. There are, of course, reservations to take into account for both businesses thinking about the use of an interim exec and execs looking to jump into the market, as well as definite skills an executive needs in order to have any hope of establishing a working life un-tethered from the comfort of a long-term employer.
Phil Tuck, managing director of placement company Interim Executive Search (IES), believes chief executives and management teams have the idea of using an interim executive in their organisation on the radar screen more prominently than ever before. Citing a survey conducted by MORI in the UK, he notes that one in three UK organisations expressed some likelihood of using interim executives, a figure he obviously hopes to see emulated here.
“I put the relatively lower level of demand n Australia down to the fact that people aren’t sure about things they don’t know,” says Tuck. “Having never tried the model before, they are not as confident that it might work, particularly when it comes to the increasingly popular special project roles.”
Organisations may, of course, also be wary of the potentially disruptive influence a short-term executive could have on their performance and internal harmony. An abrasive personality brought into a company can quickly be perceived as the proverbial head kicker and inspire fear and resentment in equal measure, both for the individual and the senior executives that brought them in.
Successful utilisation of interim executives is almost entirely down to the executive’s personality and the credibility they bring to a new organisation. Tuck pinpoints communication skills as the most important prerequisite, as a temporary appointment is not going to enter an organisation and work in isolation to the rest of the business. They will frequently be expected to perform line management and become an instant peer of the existing executive team.
“If you look at most people when they take on a new permanent role, it is generally as a step up. In the interim space, we are looking at people willing, in a non-derogatory fashion, to take a step down approach,” says Tuck.
“I will never place an interim CFO who has never been a CFO before; an organisation must recognise that an interim executive they bring in is generally a step or two above what the permanent position would normally attract.
Instantly, their career record gives them the stamp of authority and credibility.”
A Guiding Hand
As a recruitment specialist, Tuck constantly has his eye on the market and says the departure of a function head often leads organisations to look briefly at potential internal candidates, deem that no-one is suitable and go out to the market. He argues an experienced professional can be brought in to help fast-track an internal executive, acting as a mentor rather than throwing them in at the deep end.
“The 2IC in the IT department may be 18 months away from being prepared for the CIO role. If you bring in an experienced interim CIO, you cold actually decrease that to six months and diminish the need to spend money and effort looking outside the organisation,” says Tuck.
Interim executives are generally hired for a period of three to six months, sometimes for much shorter and for assignments that can occasionally roll on as long as 18 months. All senior executive positions are up for hire and assignments generally fall into one of two categories: filling the position of a recently departed line manager, or coming in alongside a full complement of executives to take charge of a specific internal project or problem.
The special project area is clearly an area of great potential for prospective interim managers; they are basically pitched as an alternative to management consultants. Like consultants, they are paid on a daily rate, but unlike the consultants who turn up to fulfil contracts, interim managers will often have 20 years of industry experience. Daily rates, according to Tuck, are favourable and so for the same price you get an executive with double the earning power of a consultant.
The move away from permanent employment certainly removes the element of long-term company politics that some CIOs find so soul destroying, but to an extent it is replaced by politics of a slightly different nature. An interim CIO may be brought in after the departure of a longstanding incumbent, for example, leaving those lower down the chain disillusioned at being overlooked. Other senior executives may also feel insecure about the new hired gun, so having your motives questioned comes with the turf.
Here to help
He says that interim management is a career path that allows executives to shed the areas of their career that have left them disenchanted – such as excessive meetings and travel – and focus on the roles they really want to take on. Tuck says about 50 per cent of the people on his books are executives, in between permanent jobs; many were made redundant or wanted to drop out of permanent work temporarily, others are interim indefinitely.
“Clearly, those that see interim management as a career path are not seeking power, status, financial security and the need to belong, because interim assignments don’t give them any of those things, “ says Tuck. “If I look at the people who are putting themselves up as career interims, they would probably want to work six to nine months of
Financially, interim executives are well remunerated for their time, and are typically paid on a daily rate basis. As a rough guide, Tuck takes an assumption of 200 working days in a year and so divides the individual’s permanent salary package rate by 200 to give a daily rate indication. An executive formerly earning a package of A$200,000 per annum will therefore charge roughly A$1,000 per day.
Demands and Rewards
McJury concedes that, from his perspective, interim management is something he can only do for so long. He has begun to miss the satisfaction that comes from the long-term development of staff and ongoing business strategy. He intends to dip back into the permanent workforce in a couple of years.
He laughs at the suggestion that interim executives must suffer less stress, and points out it is probably more demanding during the assignment itself, due to the often problematic nature of the tasks they are brought in to handle and the ever-present need to be adapting to a new organisation. The reward simply comes from having longer breaks between the periods of madness.
Without wishing to point out the obvious, CIOs should seriously consider their ability to personally handle change and insecurity. If the thought of not knowing when the next assignment may come along gets beads of sweat forming on the brow, it is probably not the right choice.
Author: By Sharon Pink
Maturity and experience are highly prized by employers seeking executives for the short term. In 1999, Amanda Robertson left her job as a human resources (HR) director after 20 years in the investment-banking industry. She wanted to change her lifestyle while still making use of her business skills, so she took a six-month assignment with a travel company to carry out a specific restructuring and recruitment program. It was an assignment that led to a new career as a short-term executive.
Until recently, for many senior executives who left work voluntarily or otherwise, took early retirement or sought alternative challenges, the outlook for future employment was bleak. Traditionally, when companies needed high-level skills for a defined period, they would have looked to management consultants to fill the gap.
But now there are plenty of opportunities across all professions for mature people who have worked at the front line of industry and have a successful track record in senior management roles.
Robertson says that working as an interim executive is both enormously challenging and highly rewarding. “It has allowed me to broaden my horizons significantly,” she says. “After so many years in a business focused on multi-million-dollar deals, it was a significant shift of emphasis to be in an environment where people were working on transactions with $3 margins.” But the most important benefit was the realisation that her skills were eminently transferable to other industries.
The interim executive concept, well established in Europe and the United States, has been slower to take off in Australia. But in July, the Australian Bureau of Statistics reported that the ratio of part-time to full-time employment had reached a historical high of 39.4 per cent, with a strong demand for interim executives in an uncertain economic and labour market.
Phil Tuck, managing director of Interim Executive Search, has specialised in this area for many years. He says that interim executives can be brought into companies to provide leadership and guidance in a variety of roles, such as maintaining “business as usual” if a CEO or director leaves suddenly or takes extended medical or maternity leave; implementing changes to management initiatives; directing or facilitating specific projects; mentoring new directors; or supplementing an executive board during corporate expansion, public flotation, mergers or acquisitions.
Robertson believes that flexibility, resilience, assertiveness and an ability to “stay out of the politics” are key characteristics of a successful interim executive. “As an interim HR director, it was important for me to stay focused on the strategic role I was hired to carry out,” she says. “It would have been so easy to get sucked into the day-to-day operational issues, but that’s not what I was there to do.”
Julia Ross, founder and managing director of Julia Ross Recruitment, sees the growing market for interim executives as benefiting employers and executives, and believes that career
Phil Tuck says Australian corporations are turning increasingly to interim executives to support their organisations as they respond to worldwide business trends and the need to maintain a flexible workforce. “An enormous benefit for our clients is that interim executives are proven, results-oriented practitioners with hands-on experience who can hit the ground running in each new assignment,” Mr Tuck says.
There is no doubt in Robertson’s mind that it was working as an interim executive that gave her the confidence to strike out on her own. Her company, Capital Knowledge, provides strategic HR outsourcing services to selected clients on a retained basis.
Author: Emma Connors
Short-term executive placements are catching on as companies contemplate the legacy of restructuring and cost-cutting, and the ranks of “lifestyle” professionals increase.
Temporary posting has emerged as the one bright spot in the otherwise grim executive search market. This year, international firms like Heidrick & Struggles and Korn/Ferry International have cut staff.
Last month, the two Australian offices of the United Kingdom-based Nicholson International were placed into voluntary administration.
But while demand for permanent appointments splutters, the increase in short-term appointments has accelerated.
Earlier this year, Boral Clay & Concrete opted to make an interim appointment to a senior engineering position as it embarked on what became a lengthy search for a permanent candidate.
Temporary placements are usually paid according to a daily rate. An executive who would command a $200,000 salary, for example, would cost an organisation about $1,300 a day if sourced through an agency.
“It is an expensive option if you look at the individual but not if you consider the cost across the organisation. We didn’t want to rush the search or force an existing employee to carry an extra load. We also wanted to put some grey hair back into the organisation” said Mr Wayne Beel, general manager, human resources, at Boral Clay & Concrete.
One specialist firm, Interim Executive Search, has about 500 executives on its books, typically baby boomers with at least 15 years of management experience and more than a smattering of grey hair.
The managing director of Interim Executive Search, Mr Phil Tuck, said Australia was beginning to catch up with a trend that was well established in Europe and the UK. Other recruitment specialists said there had been a marked increase in short-term positions this year.
“In times of uncertainty, interim appointments come into their own,” said Mr Simon Monks, director of TMP Worldwide’s executive search division. However, he also said companies were likely to look for permanent executives to lead strategic projects once the economy improved. But for those who have logged up a succession of short-term appointments, it appears to be a permanent condition. Mr Frank Anderson has gone from one assignment to another since he was retrenched by an investment bank in the last round of restructuring, back in 1992. “This year’s bout of downsizing and rightsizing has probably brought home to many companies the cost of retrenchments. Temporary appointments have become much more acceptable,” Mr Anderson said.
Author: Emma Connors
Roll on summer. The growing army of executives looking for jobs in the information technology and telecommunications sector has all but given up hope of any jobs appearing on the horizon until February at the earliest.
Statistics for October show no turnaround in sight for the sector, which has been haemorrhaging jobs for the past year.
The EL Executive Demand Index found overall demand for executives fell 17 per cent in October from the previous month. Information technology was the worst hit sector, slumping by 50 per cent. The message from the managing director of EL Consulting, Mr Grant Montgomery, was blunt: “Demand for senior executives has fallen off a cliff and a recovery is not expected until March. Senior executives currently out of work should relax and take an early Christmas holiday.”
In the technology sector, the best news in the past week came from Cisco, which said it didn’t think it would have to cut any more positions. No-one, it seems, is hiring.
Mr Andrew Phippen has been looking for work since he was retrenched at the end of July. Newspaper and internet job ads are of limited value. The type of job offer he would like to receive is usually a result of personal contacts, so it’s important to not fade from view, but there is a limit to the amount of networking anyone can do.
“I’ve drunk more cups of coffee than I have in a long time. After a while you start to feel like an Amway salesman. Fortunately I’ve had other projects to keep me occupied. Soon the country will shut down for Christmas so it’s hard to be optimistic until everyone returns to work in February.”
Earlier this month, Mr Olavs Ri-tenis took the unusual step of spending $1,200 on an advertisement in The Australian Financial Review to alert the market that, after 24 years in the
Mr Ritenis would like a temporary executive position to tide him over while he plots his next entrepreneurial move in a career that came unstuck in the tech wreck.
Economic conditions favour executive leasing but it appears the US-dominated IT sector is not ready to hire, even on a temporary basis. Three months ago Mr Phil Tuck founded Interim Executive Search, which has about 500 executives on its books who favour short-term contracts.
“Demand is strongest for financial and general management. Organisations are thinking more creatively and are prepared to hire corporate advisors, marketing specialists or high-level human resource strategists for short-term positions,” Mr Tuck said. But not in the IT sector where demand is subdued, even for interim executives. “The US-owned multinationals are still more focused on head count reductions or staff freezes,” he said.