Is there ever a time when hiring an outside senior executive for a short term assignment in a software or hardware company is the right thing to do? If you’re based in the US, the most typical response from tech company boards and senior leadership to the question of using Interim Management seems to be NO.
Obviously there are many exceptions to this statement. But in the great majority of cases when an executive position opens up, the next person in that role is another permanent executive hire. The vast majority of the time little consideration is even given to any other potential solution.
In the small minority of cases where there is someone designated in the role with an “Interim” tag, it’s usually someone from inside the company. In the case of Interim CEOs, it’s often a current board member. Seldom do you see someone come in from outside the company who is brought in on an Interim basis.
This is very much a US phenomenon, however. In Europe (and in the UK in particular), the use of Interim Executives is a much more common occurrence. Why is there is such a different view of this function between the two main areas of the western business world? The use of Interim Senior Managers is increasing in the US, but it is still a tiny segment of the executive marketplace . Past the obvious difference in labor laws which make it much harder to reduce the permanent labor force in Europe, I’ve always assumed there is a cultural reason for the European vs. US gap in Interim usage. But I’m really not sure what other reasons there are for the differences in attitude.
So are US companies missing out on a practice that could in some cases be very beneficial to their business? Let’s look at a few circumstances where hiring a senior Interim Executive might make sense:
Covering gaps with Interim Management
This is probably the most common reason to utilize C-Level Interim Management. An executive has left the company–whether willingly or not. The team left behind needs leadership. You can attempt to fill this gap by temporarily putting the team under a manager of another functional area or a more junior executive, but of course this isn’t optimal. This manager of the other functional area usually doesn’t have the right background to manage this now leaderless team and probably has a full plate managing his own functional area. The junior manager you are throwing into water deeper than he/she is used to (and maybe infested with sharks!).
These two are the solutions you see most often, but neither is generally a great solution. If the time gap between the former executive leaving and the new permanent hire coming on is extremely short, it might be fine. But if the time period the position is open is lengthy (or worse, you hurry into a very fast new hire) the performance of this functional area can really suffer. Bringing in an experienced Interim can often be a great solution to allow you to keep momentum moving in the right direction in the area of concern, while allowing the company to take it’s time and have a careful, thoughtful hiring process for the next permanent executive.
There are many different reasons that a company might benefit from utilizing a change agent. One of the more common scenarios is a company undergoing financial duress. It’s often very hard for incumbent management to make the very painful decisions required to bring the company back into balance, enabling it to continue as a going concern. While a new permanent hire can take the necessary steps, it can sometimes be beneficial to use a transitory change agent like an Interim Manager to take these steps. An Interim can step in and act quickly, while the right permanent hire might take too long in circumstances where timing is critical. Also, under this approach the new permanent hire, whether a CEO, CFO, etc. can come in with a clean slate and begin his or her tenure on a more positive note.
Another scenario common in the software and hardware business is rapid change: in technology, or some other massive change in market dynamics. In these instances it can be quite helpful to bring in an Interim specialist in the technology or marketing to guide the company through a challenging period.
More generally, while most companies highly value their corporate cultures, if care is not taken there is also a tendency for things to become a bit stale over time and worst-case produce an inbred, group-think approach to business. Sometimes a fresh, outside perspective can inject new energy and innovation into problem-solving and other aspects of the company culture, even if utilized only for a short time.
Lastly, sometimes situation arise in companies where conflict over policy or personality is tearing the company or department apart, impacting the organization’s ability to function as team working toward important common company goals. Sometimes this is a transitory issue but it can also be the result of a corporate culture which is becoming toxic. In these cases, bring in an Interim Manager with no previous “dog in the hunt” can allow him or her to serve in the role of an unbiased, Honest Arbiter to bridge the divide between the warring factions.
Manage a Special Project
The final common reason to retain Senior Interim Management Executives in a tech company is the ubiquitous “special project”. There are many good reasons to bring a temporary senior resource on for special projects. Sometimes a project is very, very challenging, and it makes sense to bring in the most skilled, experience expertise possible to raise the odds of success. In other instances you feel confident in the level of internal expertise to bring the project to a successful conclusion, but the appropriate internal candidates simply don’t have the bandwidth do justice to a leadership role for the project.
In certain circumstances such as an M&A project, a new market/technology investigation or the startup of a new division, you may wish to maintain a certain level of discretion or confidentiality in the early stages of the project.
In many of these special project cases a more traditional consulting engagement could also serve the needed purpose, rather than a deeper and lengthier Interim Management engagement. The proper engagement style depends upon long and how independent the engagement needs to be.
PJM Consulting provides C-Level Interim Executive Services to software and hardware companies, in addition to our core Management Consulting Services. Contact us using the information below if you’d like discuss a potential need for an Interim Executive.
These are just a few ideas on why and when you might want to consider hiring an Interim Senior Executive. I’m sure there are many prime areas I left out. Post a comment with your own thoughts on the applicability of using Interim Management in high tech companies.
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