CMI: As the economy has picked up, UK firms have increasingly turned to interim managers to help drive growth, deliver change and accelerate plans. Indeed, according to the Interim Management Association (IMA), the use of such staff has grown by 93% since the pre-recession levels of 2006. The IMA reports that there are approximately 16,000 senior UK interims at work right now – and this year, the sector is tipped to become a £2 billion market.
I’m not surprised by the growing demand for senior interim managers. After all, there are some tremendous advantages to using them, and much to be learned from their leadership styles. To appreciate them, you first need to understand what an interim manager is… and isn’t.
An interim manager is an experienced, senior “hands-on” manager, who has been hand picked to match a company’s needs. This means they have a proven track record working in a particular sector, or perhaps tackling the issue that the company needs help with – such as establishing an overseas operation, managing a merger or acquisition, handling a corporate turnaround, introducing a major new technology or even setting up an e-commerce operation.
Typically hired for six to nine months, interims are adept at walking into often very challenging situations where the need is immediate, the timeframe is tight and they need to make things happen – fast.
WHY INTERIMS ARE NOT CONSULTANTS
Some make the mistake of putting interims in the consultancy bracket, but they differ in a number of crucial respects. Senior interim managers are cheaper than consultants, implement as well as advise, and are focused on delivering swift results. Importantly, they will also share their knowledge and experience with the team before they leave an assignment. This is particularly valuable for companies that want to extract every ounce of value from every hire. Other advantages are that interims tend not to involve complex contracts or termination costs, and don’t carry the baggage of the “consultancy’s way” of doing things.
SO, WHY NOT GO PERMANENT INSTEAD?
You can already see why interims are proving popular compared to, say, consultants. But why are so many corporates going down this temporary route rather than simply hiring a permanent senior executive?
The main reason is cost. With an interim manager, you get an awful lot of “bang for your buck”. They are usually overqualified for each assignment, providing an organisation with access to experience and talent that it couldn’t afford on a permanent basis, but which in the short term would deliver incredible value.
At one time, people had the perception that interim management is the more expensive route to travel. However, once bonuses, NI contributions, pension, health and company car benefits are added to an executive’s £100,000 salary, annual costs top out more in the region of £175,000. An interim incurs none of those additional costs.
Plus, in today’s dynamic economic climate, organisations want to be able to respond to opportunities and take big decisions at speed. In that way, interims make for ideal recruitment solutions as they are available immediately and will start delivering results within days. By contrast, a permanent employee who has just served out a notice period may take several months to get up and running.
Many employers are also attracted by the fact that interim managers are not planning long-term careers in their organisations, so won’t be afraid to be candid and tell senior teams what they need to hear. That also means they stand outside an organisation’s politics: they’re not caught up by divisional rivalries or differences that could seriously hamper major initiatives or change programmes.
HOW HAS THE PUBLIC SECTOR RESPONDED?
That last point perhaps explains why interim management has also grown in popularity within the public sector in the past year or so. Public organisations – which often, by their very nature, have complex cultures – have been beset by masses of upheaval and restructuring. Local authorities are expected to make significant cuts between 2015 and 2020. Services are being privatised, or made more consumer facing.
With that in mind, the sector has required insights from highly experienced turnaround and change-management specialists. At the same time, it has been under pressure to keep head count to a minimum. For such organisations, therefore, figures show that interim management has proven a winning solution. According to the IMA, in the final quarter of 2014 the proportion of completed interim assignments within the public sector rose from 40% to 49%.
That’s not to say that private-sector interest in interims has dwindled. In fact, we have seen a sustained pull from organisations in every branch of the private and public sectors, and particularly strong growth in demand among organisations undergoing major changes or implementing big projects. This is especially true of financial services firms and, especially, transportation, which has had HS2 and Crossrail to resource.
GETTING THE MOST FROM AN INTERIM
So, if a company or public-sector organisation is planning to take the interim route, how does it ensure that it gets the most out of them? There are eight simple steps I always share:
1. Be very clear when briefing the interim management agency, so that you get the right candidate
2. Ensure the interim understands your needs right from the start, and keeps within those parameters. Don’t allow mission creep, or changing of the goal posts
3. Agree on set timescales for those aims
4. Hold regular reviews during the assignment to ensure it is on track
5. Ensure your internal team understands what the interim is going to do – and why
6. Also explain that the interim is fulfilling a temporary role requiring a specific set of skills or experience: “This is someone you can benefit and learn from.” That will help to ensure that staff don’t feel threatened and want to undermine the interim, but will instead actively support their work
7. The interim manager will have a wealth of experience and a valuable external perspective. Don’t be afraid to use those valuable qualities
8. Promote a proper transfer of skills and knowledge from the interim manager to your team at the end of the assignment
Those coping with change, downsizing or resourcing big projects or opportunities see interims as an ideal means of temporarily injecting specialist resources, skills and leadership styles into their operations. Equally, as we come out of recession there are plenty of companies aiming to boost growth who daren’t scale up their senior permanent headcounts. For them, interim managers are again proving to be the answer.
Wherever you look in the UK economy, the market for these “guns for hire” is only growing.
Norrie Johnston is director of Norrie Johnston Recruitment Ltd