People often ask me, “What is interim management?” Instead of defining it myself, I thought I’d share a very well written article by Anna Fedorova who runs an interim management firm. The Resourceful CEO previously provided interim management, both long-term and short-term, but now solely focuses on project-based interim management to resolve specific issues or achieve specific financial goals. – TCW
What Is Interim Management?
According to the Interim Management Association, “Interim Management is the rapid provision of senior executives to manage change or transition”.
In simpler terms, an interim manager is a highly experienced and specialized executive whom you can employ in your firm for a short period of time to solve a specific business problem. He is a master project manager and will not only act as a consultant and give you advice, but also solve the problem for you.
Let us take a hypothetical example to understand this better.
Company X has been performing badly from the past 5 years. It is a family run business and due to the internal politics amongst the family members, the company has lost its competitive edge in the market.
To make the situation worse, the Managing Director has suddenly resigned. Now, the Chairman of Company X realizes that the existing management team is inexperienced and incapable of running the company.
So, he has two alternatives. He can source and hire an existing senior level executive from another company and employ her on a permanent basis. But finding the right person uses valuable resources. The placement of a new senior staff member may cause further conflict between family members and insecurities in their roles, and they may seek work elsewhere. And worse, if the new executive turns out to be the wrong choice, removing her will be difficult.
The much better alternative is to employ an interim manager! Such an executive offers both past experience in short-term troubleshooting and company efficiency, and specialization in the particular field.
The Chairman will be able to select from a panel of executives deemed suitable by the recruitment agency, and spend less time and money doing the legwork on his own. Existing employees will feel less threatened by the interim manager because of the limited time he will spend with the company.
An interim executive provides the solution to any number of problems in business. They are committed to their role as a short-term staff member and their varied experience in critical situations gives them a strategic advantage when handling new problems.
For a layman, it may appear that “interim manager” is just a fancy word for a management consultant. This is not the case! Some of their responsibilities do overlap, but there are very simple – and important – differences between them. Let us investigate this properly.
What are the differences between Interim Managers and Management Consultants?
There is a vast distinction between them. Although on the surface they appear to be similar roles, their functions are quite distinguishable.
Essentially, an interim manager is a management consultant, but a management consultant is not an interim manager.
Their core differences are outlined below:
- An interim executive is hired as an independent person on the basis of his or her personal abilities and reputation.
- An interim will always try to cut costs and improve company effectiveness to achieve organizational goals as quickly as possible. This will assist in building his or her reputation.
- An interim does not only advise on the situation, he or she also implements measures to solve the problem.
- An interim reports directly to you, the employer, and not through a third party agency, so you are well informed and there is no conflict of interest.
- An interim works with your own team, provided by your company as you see fit.
- Interim Managers are usually specialists in their particular fields. Their experience is vast and relates to the particular field that you hire them for.
- A consultant generally works through an agency and is hired on the basis of the agency’s merits more so than his or her own reputation.
- A consultant may try to push additional services or “stretch out” the service to increase his or her own revenue or that of the agency.
- A consultant does advise on a situation, but will not implement his or her own advice.
- A consultant reports back to his or her agency, who then reports to you, costing valuable time and other resources.
- A consultant works with the people he or she chooses and brings them into your company instead of adapting to work with the people you already have.
- Consultants generally do not specialize in one area, but are a “jack of all trades” in business.
It is clear, then, that an interim manager is able to perform a far more specialized job for your company, using your own resources and reporting only to you. He or she does a “start to finish” job: overseeing the company’s current operations, developing strategies for improvement and then implementing the strategies. A recent survey of 100 senior directors reported that 78 per cent of them feel that interim executives are a better option than management consultants.
What this all means is that the interim management industry is beginning to expand. Companies increasingly prefer interims to their consultant counterparts because of the more complete service that they offer.
Interim Management Trends
The interim management industry is a relatively new field. It was borne into the European market in the 1970s and 80s and is projected to grow further in the coming years. It originated in order to be able to provide fast, specialized top management service in times of company and management crisis.
For example, at the time of its introduction to the Netherlands in the 1970s, companies were dealing with long terms of notice and high termination payouts. The oil crisis had occurred and industries faced a major setback. As a result, highly skilled and experienced managers were required on an immediate basis in order to rebuilt companies that were failing.
And so interim management was born.
Similar situations have occurred in other countries in Europe. Over the past 20 years, the size of the market has grown steadily.
The interim management market offers different areas of specialization, and these have different rates of demand. All are highly competitive.
Areas with the highest demand are schools of Human Resources and Finance & Operations, which account for almost 20 per cent of all assignments. Lesser levels of demand are found in areas including Purchasing, Supply Chain and IT. However, the highest remuneration is for IT and Managing Director/CEO roles.
The public sector employs almost 20 per cent more interim managers than the private sector, but there is evidence of a gradual growth in their employment within privately owned companies. Interim mangers are beginning to enjoy an excellent reputation for quick and effective strategic management, and this is contributing to industry awareness.
The interim management industry as a whole has experienced excellent growth in the past few years and it is expected that it will continue to grow at an accelerated rate in years to come.
What does this mean?
Despite its relative youth in the management industry, interim management has grown steadily. There is an excellent opportunity for individuals to become involved in interim management while it is still growing – “on the ground floor”, so to speak. There is basis for thinking that interim managers will begin to take over from management consultants as companies become even further specialized and have even more requirements for quick solutions.
Interim management is here to stay!
About the Author: Anna Fedorova is the CEO of InterimManagement.com ( http://www.interimmanagement.com ) – leading global provider of senior interim managers.