5 Strategic Scenarios When You Should Hire an Interim Executive

For the board chair of an arm’s-length government agency, it was problem that did not seem to have an immediate solution.

The agency was facing increasingly difficult business conditions and was losing customers. At the same time, there were rumors floating around that the agency and its 400 employees might be melded with another agency, the public sector’s version of a M&A. However, at a time when strong executive leadership was most needed, the board was convinced the current CEO was not getting the job done.

Having lost confidence in its current chief executive, the board wanted to make changes sooner rather than later. Unfortunately, succession planning at the agency had not been robust; there was no one currently within the organization who could step in and take on the top job.

Further complicating matters, the board understood a full-on search for a new, permanent CEO would take six months at the very least. There was consensus on the board that it would be impossible to wait that long to make a change. And besides, what self-respecting executive would stand patiently by while the board looked for a successor?

Fortunately for this organization, there was a solution the board had not yet considered: an interim CEO. The board chair had previously worked for an organization that utilized an interim chief executive to solve a similar leadership crisis. She knew that it could work with the government agency.

True to her previous experience, an interim executive search firm found a recently retired managing partner from a Big Four accounting firm who had not only led large organizations, but also had special expertise in M&As. That would be invaluable experience if, as many thought, the agency would be combined with other government entities.

The board was happy. The employees found comfort in the knowledge that there was an experienced hand on the organization’s tiller. With one simple move, the organization had gone from crisis to confidence.

Although it may not yet be seen as the go-to solution in a leadership crisis, increasingly interim executive placements are finding their way into organizations big and small. 

For larger organizations, with deeper leadership bench strength and—in most cases—pre-existing succession plans for every important senior leadership role, the need for contingent executive placements may not be as great. With a larger company, it’s easier to shuffle the deck and cover off the gaps that come from sudden departures or the arrival of new projects.

However, interim executives are an excellent option for smaller or medium-sized companies that are less active in succession planning, or which simply don’t have the bench strength internally to plug a big and potentially consequential hole at the top of their leadership structure.

Emergency versus Strategy

In general, interim executives are brought in for two main reasons: to fill an immediate or emergency gap; or to support a short to medium-term strategic need in the organization.

Much of the work we do to find interims comes from smaller or medium-sized clients who come to us with some urgency around finding a replacement for a senior leader who has been forced to exit because of scandal, a performance issue or personal health reasons. 

These organizations have an immediate need for a steady hand on the rudder until a longer-term solution can be found. But increasingly, many other client organizations are coming to realize that interims make sense in less urgent, more strategic scenarios. 

The more you look at these strategic scenarios, the more you realize that this is an option that more organizations should undertake. 

Top five strategic scenarios where interim executives make sense

1. Unmatched workforce flexibility: Keeping a portion of your senior team on interim engagements allows for greater workforce flexibility into the future. As the project or market needs change, you can exit one interim and fill a spot on your executive team with another person with different expertise to suit any new skills requirements. Interim hires ensure that you always have the right talent for the project rather.
2. Just in time addition of skills: If your executive team is good in general but isn’t equipped for a specific project or initiative, an interim executive can be an excellent option. Not only do you get immediate access to new expertise, but you have an opportunity for a knowledge transfer with your permanent executives. Situations like M&As are a good example of where an organization might want to bring in someone who has expertise with integrating two organizations. If you have never been through an M&A before, it’s unlikely you’re going to have that expertise in-house.
3. Expanding into new markets: One of the biggest and most common challenges facing smaller and medium-sized companies is expanding into new markets. If your organization is preparing to do business in a new country that might involve working with a new language and culture, it’s unlikely you have the internal leadership capacity to deal with all the unique challenges that can arise. Hiring interim leaders who have already worked in that market, or who have experience helping organizations jump to new jurisdictions, can be invaluable.
4. Managing the frothy marketplace: In uncertain times, like the ones we’re experiencing now, it is often difficult to determine the exact array of skills and expertise you might need on your executive team and the skill needs could change rapidly. This is particularly important when you’re facing a “frothy” talent marketplace, where many organizations might be so desperate to bring on new people, they are over-hiring and overpaying to corner available talent. This can leave organizations with a glut of people who are bad fits or who don’t meet future expectations. Interims give you the time and space to figure out exactly who and what you need.
5. Training wheels: When small and medium-sized companies promote from within to fill a spot on the executive team, it’s not uncommon for those newly promoted executives to occasionally struggle in their new role. Interims can help mentor these new executives, giving them the time and support necessary to learn all that is required of them in their new jobs. This can be a particularly valuable option if, in addition to promoting someone to the executive team, you expect them to bring a new set of skills to the job. An interim executive/mentor can help new leaders carve out time to reskill or upskill.

Interim executives bring new skills, expertise, and perspective to an organization. In some instances, their contributions are so valuable, they are offered opportunities to stay on with the company that brought them in as an interim hire.

With the ability to match an executive to a specific challenge, and the absence of any long-term commitment, interim or contingent hires are the perfect workforce management strategy for our trying times.