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Today’s Corporate Superheroes:Interim Executives

In today’s marketplace, there is an abundance of highly trained, experienced interim executives that can swoop in to solve any number of business challenges.

In fact, these corporate superheroes are becoming a “must consider” strategy. One Central Valley firm, External Resources, specializes in these interim executive gurus. Their placements have saved the day for a variety of businesses, including service, manufacturing, agricultural, and non-profit.

Exactly what are interim executives? In short, they are highly experienced specialists who are hired on a short-term basis for immediate resolution to a specific business challenge. For example, interim executives are often the right answer in times of start-up, acquisition, merger, market expansion, new service or product introduction, sale of the business, or downsizing.

(Related: Seven Reasons Interim Executives are Great for Business)

There is a distinct difference between an interim executive and a consultant. The interim executive steps into a position on the firm’s organizational chart and is solely dedicated to the company. On the other hand, a consultant does not assume a company position and rarely maintains an exclusive relationship.

The Human Capital Institute’s white paper, The Interim Executive: Gaining a Competitive Business Edge Through Interim Executive Management, contains a professional perspective by Randy Mehl of Robert W. Baird & Company that discusses why the interim executive is a growing breed, “The use of interim executives is going to be a solid trend over the next several years as the market becomes tighter for specialized talent. The labor force is going to lose many executives over the next several years as the population ages. The need will be particularly acute for managers in their late 30′s and early 40′s. The result will likely be a lengthening of the permanent search cycle, and this should create a vacuum that the interim executive fills.”

When do you pick up the red phone and summon the super skills of an interim executive? Good question. Below are some possible scenarios.

You need more time to hire a replacement executive on your team, but the work still needs to get done. You bring in an interim executive to fill the gap until you work through the interview process and hire the right person. This serves the company well because making the wrong hire can cost a significant amount of money. How? According to a study conducted by the Harvard Business School, making poor hiring decisions can cost a company as much as three times an employee’s annual compensation package. Plus, there are productivity losses in the form of low employee morale, extra time spent on performance management, lost business relationships and goodwill, as well as other potential costs for unemployment compensation, severance pay or even legal fees.

Here the question begs to be asked, “Do you ever permanently hire the interim executive?’ The answer is yes, it happens. The interim executive builds relationships and, based on work performance and demand, it only makes good sense to see if there is a permanent fit for the person and the company.

Another situation where you would bring in an interim executive is when you are unable to afford the hiring package for the level of executive you may need. Sonya Morgan, External Resources Vice President of Business Development, states, “Interim executives are far less costly than permanent hires because of the ‘fully loaded’ cost avoidance. As an example, for start ups, an interim executive team of two to three strategic leaders delivers the experience and skill necessary to build the business plan and procure the necessary funding.”

One of the more difficult and uncomfortable situations in business involves conflict within a family-owned company. Again, an interim executive is one of the best answers. The interim executive can handle the situation with total objectivity, delivering factual results, reports and recommendations without the added concern of maintaining a family relationship.

(Related: President Grows a Declining Family Business into a National Company)

What kind of personality is required for successful interim executives? Given their frequent role as change agents, plus the likelihood of surprises in every assignment, interim executives need a “high fortitude for chaos,” as one Houston-based attorney and interim CEO puts it. This interim exec’s LinkedIn profile reads as follows: “CEO/COO/EVP with extensive experience in business model restructuring, turnaround, cash flow management & change management, performance improvement, risk mitigation & fund raising.” Now that is a pretty impressive arsenal of super weapons!

Interim executive work is not for everyone. “This kind of work demands that you be enterprising, think outside the box and abandon the old W-2 mentality,” points out one interim CFO.

However, the benefit can be significant. Interim executives hit the ground running with a focus on delivering results. In the midst of change, it’s often the interim executive who is the leader to spot the “jewel in the rubble”—the undiscovered asset that will be the catalyst in getting a company to where it wants to go.

Why is that? Simply, interim executives bring a vault of experience and, of course, a high degree of objectivity. They have dealt successfully with the issues at hand many times before and are able to respond with solid decision-making. In fact, according to research from Corporate Insights Limited, interim executives achieve goals 20 times faster than permanent senior managers. One of the Corporate Insights Limited managers familiar with the study wrote, “For most permanent appointments, senior or board level executives had the first 100 days to manage their transition and prepare for action – typically, interim managers and executives do it in five days! An interim executive – who has joined a business at perhaps as little as a week’s notice – will learn 90% of what he needs to know in his first day on the job. By the end of the first week that interim would have learned 99% of what he or she needs to know.”

So let’s take a closer look at the Central Valley firm, External Resources. Though it provides executive services for permanent placement, the External Resources interim executive placement service makes it unique, with assignments as varied as the “hired gun” executives the firm represents. For example, External Resources represents interim executives with high levels of experience and accomplishment who have written software for unmanned aircraft, worked with celebrities to expand their brand, grown a family business to realize five times its revenue, taught best practices to a manufacturing concern, and even served as interim CEO with the task to find their permanent replacement, plus much more.

With offices in Modesto and Stockton, External Resources has caught the attention of leaders in both Central Valley cities. Ralph Curtis, of Curtis Legal Group, and Chairman of the Board for the Modesto Chamber of Commerce, states, “Stu’s company provides a valuable service. They help companies get through temporary financial challenges and get back to profitability. In these tough economic times that is very important.” Doug Wilhoit, Stockton Chamber of Commerce CEO, who has come to know External Resources states, “As our companies begin to come back from the downturn, having a company of the caliber of External Resources to turn to for interim and permanent executives is a valuable resource. I personally have gotten to know Stu Gilman and Sonya Morgan of the firm. I am highly impressed by their professionalism and glad to have them in Stockton. So much so, we have appointed Sonya to the Chamber Board.”

Stu Gilman, who is president of External Resources, also serves as an interim executive. One of his international clients, Agilent Technologies, often needs an executive to manage its interim projects. Frank Cesarz of Agilent states, “Stu’s company fills a void that we have, putting tools in place for specific department needs or specific operations within particular countries. Their ability to respond quickly makes us more effective and efficient.” Stu explains the work of their interim talent further. “We have developed management software programs that track millions of dollars of sales and deliveries around the world. Our interim, high-level engineers develop custom, web-based applications, working with Agilent staff in Europe, Latin America and Asia. Our executive personnel have traveled to India, Japan and Taiwan to train and perform knowledge transfers of our applications.”

As the highly specialized, experienced superhero who is called upon in times of emergency, the interim executive is becoming an everyday part of the business world. If your business is facing tasks that are beyond your ability, capacity or comprehension, one of these corporate heroes on steroids may be your solution.

With all metaphors aside, an interim executive (or an interim executive team) delivers the insight and experience to guide you down roads you have never traveled. This is valuable especially with start up planning and funding, filling an executive breach in the corporate wall of daily work, or charting an important expansion, acquisition, or merger. Whatever the need, an interim executive makes good sense…good business sense.

Written by By Dr. Franklin Santagate

Dr. Franklin Santagate is President of SNRGY, a strategic marketing firm specializing in writing business plans.

External Resources would like to thank the Central Valley Business Journal for printing this article in their April, 2011 periodical (see page B2) as well as displaying it on their web newspaper at http://www.cvbizjournal.com/

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