Approaches taken by an interim executive: Zero Based Budgeting and More
Don talks about zero-based budgeting approach, engagement, and quantification as an interim executive
Interim Executives don’t step into perfectly running companies. They enter when there’s trouble. There might be a sudden gap in leadership or the company is going through a transition. Their temporary and challenging position requires them to handle their jobs differently than they might in other situations.
With over a decade of experience as an interim executive in multiple companies across different industries, Don has some key learnings for CEOs. He owes his success to a few core principles that are a cornerstone of his interim management strategy.
Leverage a team over a person
It’s never just one person running the show; everyone is part of the team. For a successful transition, leaders need to understand they are just one piece of the puzzle and that they need to cooperate with all other pieces.
Teamwork is most effective through communication. Don advises – Be open and honest with people. Set expectations, set timelines, and say this is what needs to be done in this amount of time then let people go do it.
Engagement is key
“Engage everybody in the solution,” says Don. “No one person, even at the top, knows what’s going on in all aspects of the business, so you’ve got to engage everybody.”
Symptoms in one area of the company could be because of a problem elsewhere. Unless management is engaged with all areas, they will be unable to connect the dots and diagnose the problem. They should focus on solving the problem, not just react to symptoms. He says a major problem in companies is, “too many people just focus on the symptoms and really don’t want to find out what the underlying reasons are for why certain things are happening.”
Facts and figures outweigh feelings and instincts. While the latter can be useful in certain situations, it’s the numbers that give your company purpose through sound, analytical decisions. Don says, “You’ve got to get away from feelings and gut urges, and break down the numbers and figure out what you can measure. If you can’t measure something, figure out how to measure it especially if it’s important to the business. And if you really can’t measure it, then leave it out for a little while, at least for the first round while trying to figure out what to do.”
Take a zero-based budgeting approach
The most important thing for business leaders is it to take a zero-based budgeting approach. The reason why most companies are in trouble is because of what they are doing, so it’s best to ignore and forget how the company normally operates and start fresh.
Don states that somehow something these companies are doing is what gets them into trouble. He usually asks his clients what would they do if they rebuilt the business from scratch? How can they start over? And what is considered important and unimportant?
He says, “Really look at those critically and leave behind any of those things that are “always done this way”, or as some call sacred cows or protected areas. You really can’t have any. When you walk into an urgent situation, you cannot have anybody who’s off-limits or beyond the scope of what the turnaround project is.”
Keeping the focus on the end state or desired outcome and working backward from there and help avoid many of the challenges companies run into when trying to solve their issues.