What’s The Long-term Potential Of An Interim Executive In My Company?
Interim executives are an asset to companies. But what are the pros and cons of a long-term fit?
The lines are starting to blur more and more between an executive who only accepts full-time employment offers and one who is independent and works on a contract basis. This is being driven by both the executive and the company. One business development trend we are seeing goes back to the traditional interim executive model.
As we’ve mentioned, an executive’s career is no longer black-and-white—“I’m an executive in corporate America” versus “I’m a consultant.” As clichéd as it is to say, times have changed. The tenure of the average employed executive continues to decrease. It is not uncommon for executives to tell us they view all executive roles as interim at this point in their careers. The only difference is the length of the contract (whether as a contract executive or as an employee). Experienced executives are more careful and cautious of the roles they step into for a number of reasons, including the impact to their brand and whether it is fun or challenging enough for them.
As a result, we are seeing a trend for executives to work with a company initially on a project or temporary basis. In our experience, about half of the time, at the start of the engagement, there is no expectation by the executive or the company of the executive transitioning to a full-time employee. In the other cases, the company is in the process of searching for a more permanent placement for the position, and they bring an interim executive in during this process and look at them as a possible fit for the full-time employee role.
For highly sought-after executives, the concept of working with the company on an interim basis first is very appealing. They are picky about what they want to do next, regardless of economic conditions. The idea of being able to try out the position and the company is attractive and advantageous. Companies see this as very appealing as well. We have received multiple comments from companies about the caliber of executive they were able to get on an interim basis versus what they have been interviewing through other sources. After working on an interim basis, the executive and company may realize there is a good longer-term fit. That’s a win-win for everyone.
The pros and cons can be heavily debated for both the executive and the company. We have seen this applied to a number of situations, and the one commonality among them is the reduced risk for the parties involved. Here are a few points to consider.
The Company and the Interim Executive End Up with More
Top-level executives are going to be just as careful to select the right organizations to work with as much as organizations will be in selecting them. At this point in their careers, their brands are highly valued, and their success and the organizations they are associated with contribute to that. Stepping in on a shorter-term basis initially gives executives a better idea of the organizations they are signing on with and how they can impact them.
Along those same lines, we often see organizations end up with higher caliber executives in Project-to-Perm arrangements than their original compensation package would have permitted. After spending some time getting to know the company, the people, and what it would take to achieve success, executives are more willing to work within the financial constraints of the organization. Since they now have hands-on experience with the opportunity, additional compensation elements, such as success bonuses, can also be more thoroughly discussed.
Interim Executives have Goals and Deliverables Rather Than a Job Description
Rather than starting with a job description, the executive is starting with a Statement of Work (SOW) compiled by both the executive and the company. This document details what the goals are, how they will be accomplished, and the timelines in which they will get them done. This helps focus everyone at the beginning on accomplishments and results rather than a job description.
Alignment and Support by an interim executive
One of the most frustrating challenges for an executive is getting support from the leadership of the organization. This is often caused by misalignment. When we talk with executives about their backgrounds, it is not uncommon to hear that they have left prior roles due to misalignment; the owner wanted to take the company in one direction, and the executive thought it should go in another. Working with the company initially as an outside contractor can provide some perspective and insight into how these decisions are made and how willing the leadership team may be to support what it will take to get to the next level.
We have seen some incredible matches as a result of an executive working at a company initially as an interim executive. Adam is one great example. Adam is a very seasoned operations executive with decades of experience in warehouse and distribution. He took an interim executive role as vice president of logistics overseeing a single facility for a multi-billion dollar distribution company. It was not a longer-term role he was interested in, though. For starters, the company was three hours away from him, and he still had one child in high school. Moving his daughter was not an option. Secondly, he didn’t have much interest leading a single facility for an extended period of time. He wanted more of a challenge, and the value he could bring to one facility didn’t justify the salary he would need to commit to a full-time role. After a few months in the role, the company realized the extent of Adam’s talent and value to the company. Adam also got to know the leadership team and enjoyed working with them. The company ended up creating a new position, expanding the role to vice president of operations over all of the company’s facilities internationally. The new role resolved the salary gap issue, and the company was amenable to Adam commuting for the next two years. Neither Adam nor the company would have considered this a possibility when the engagement began, but were both very pleased it ended up there.
There are a number of options for transitioning in and out of being an independent executive. The rest of this book will focus solely on how executives can build a successful independent executive business, whether they are looking to create an alternative career option, create a lifestyle business, or find the next challenge and help companies over the next hurdle.