Fifteen years ago I ran into a friend at a conference who was about to hand me yet another business card. As I took the new card, I tried to crack a joke, asking him "Can't you hold down a job?" Then I read:
Yes, the card actually read Yahoo and Philip really was the first CEO.
But what did "interim" CEO mean? Phillip explained that he had a team of executives that could parachute into a new company to help the founders. Philip rode in alongside the VC investor's funding as CEO for the first 180 days of Yahoo's life as a company. In that short period of time he brought in the first managers, incorporated the company, located and built out office space, outlined a business plan, identified and secured new business and investment partners and recruited his replacement -- the first permanent CEO.
Fast forward 15 years: more executives are choosing short-term, fast-results assignments and more companies are embracing interim executives as a solution. Private equity funds sometimes need help with portfolio companies lacking management resources. Venture capitalists see promising technologies from young entrepreneurs, but want experienced veteran management to help guide the teams. Corporate boards struggle when senior managers fall short and there is no backup or relief in sight. Company owners almost by definition are overloaded and need help so they can focus on what they do best. These situations are just calling out for a plug-and-play executive.
There are highly visible cases of big companies in crisis like Enron and Krispy Kreme bringing in an interim executive, but these days more and more middle market companies are utilizing this new type of supertemp without adding to permanent overhead.
When Country Kitchen restaurants faltered and was placed into receivership, Walter Simson was brought in as interim CEO to ready the company for sale.
"The bank had no knowledge of our functions. Senior management was tied to the past," Chuck Mocco, current CEO of Country Kitchen International says. "Walter saw things through a clear window. He didn't have to deal with history, just the going forward. He brought clarity."
That clarity included focusing on core services and products, giving a new focus to the breakfast menu. Under Simson's leadership, sales which had been declining for 27 months hit break even.
Like Simson, most interims stay clear of political agenda or bureaucracy because they are measured on one thing: results. This focus allows them to bring a unique perspective that many companies are missing when they get in too deep.
Companies call on interim executives outside of crises as well. InRoads Technologies, a California based company specializing in enterprise software, wanted to shift from a service company to a product company. Owner Tom Burton brought in interim executive Mark Palmer to strategize and execute the transition. "He kept us focused and accountable," Burton said. It took Palmer to lock down key partnerships with Salesforce, Sun Microsystems and IBM, significantly increasing revenue and profits. Eventually financial-software giant Intuit purchased InRoads.
"Interim executives are highly qualified, experienced and able to produce upon arrival," turnaround expert and chairman of the new Association of Interim Executives, John Collard says. "Our skill level and expertise means we can be productive in a matter of days." Collard, who leads Strategic Management Partners and has participated in 45 M&A transactions, has been called into companies at the final hour on more than one occasion. (Full disclosure, I am a co-founder of the Association of Interim Executives)
The interim specialty runs the gamut from CEO to CFO, COO, CMO and beyond. Dominic Luzi was called in by a European manufacturer of luxury goods to serve as Interim CIO and dive into software and human resource challenges. Utilizing a wide-ranging skillset, Luzi wore multiple hats to tackle a myriad of problems. By the close of his stint the company had a new, defined strategy for their global business; and had consolidated IT, manufacturing, supply chain and product line offerings.
While interim management is not yet a household phrase, some companies are already getting the best of both worlds: temporary and expert.
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