WHAT IS INTERIM BUSINESS MANAGEMENT?
Chances are if you live in the USA, you may not be familiar with the term interim management. This is because while popular in Europe and Australia (and other parts of the world) for decades, only recently are interim management companies popping up in the States.
With that said, there’s a lot of misunderstanding out there regarding what an interim manager does? Being passionate about (and working in) the field, I have spent countless hours researching the subject, best practices, etc, and am here to clear it up.
An interim manager is a professional executive who can be deployed quickly to implement positive change in an organization. They are contracted as an outside agency for either a specific project or a specified time period which can range from a month to a couple of years. Interim managers not only help with strategy, but they also lead the implementation of their ideas, train employees, then hand off the torch when they are done. They are experts at managing crises, managing change, and managing improvement and are given authority to execute their suggestions. An interim manager is a true leader who is paid for and thrives on results.
Interim management is increasing in popularity and a viable option for businesses of all sizes these days. Some of the typical positions which companies hire interim managers for are GM (for smaller businesses), CEO, CFO, COO, CIO, CMO, and CSO. Interim managers are sometimes referred to as ‘fractional executives’, as there is only a small difference in designation which we will get into later.
Let’s dive a little deeper into the subject…
HOW IS INTERIM MANAGEMENT DIFFERENT FROM SOME OF THE OTHER OPTIONS OUT THERE?
If you’re still reading, you may be wondering how interim management is different from a business management consultant or the host of other options out there these days? Let’s unpack some of these starting with a brief explanation of the alternatives.
Business Consultant: A person who provides expert advice professionally. Basically, a consultant is paid to give suggestions and sometimes a road map for accomplishing those suggestions. The problem is if a company is in the position to hire a consultant in the first place, they usually do not even have the resources and talent needed to create a strategy, never mind execute it. If you are interested in the subject, this article from The Harvard Business Review outlines perfectly where consultants tend to fall short. Ironically, this was written in 1982 and sadly not much has changed since.
Business Coach: A business coach is similar to a consultant, they just add a few extra ‘pats on the back’. The main role of a business coach is to identify areas of weakness and encourage the client to make changes where needed. A business coach can be a great option for people who know what they need to do but just are not doing it.
Outsourcing / Outsourced management: This terminology is popular with bookkeeping agencies, HR agencies, etc. in the USA and around the world. Generally speaking, outsourcing makes sense when you can hire a company to do a continuous task which you do not have the internal manpower or know-how to. Lots of times, for tasks like bookkeeping, you can outsource for less money than hiring internally. Outsourcing is often on a more permanent basis so long as specified deliverables are met on both ends consistently.
Acting Manager: An acting manager steps into a role for a specified period of time. Generally, an acting manager is hired to minimize disruption during a management transition, and they are a direct employee of said company for that specified timeframe. The objective of an acting manager is more to maintain the ‘status quo’ during this period than to shake things up and implement change.
Project Manager: A project manager generally sees a project all the way through from start to finish and works in tandem with company shareholders and a team. Usually, a project manager is hired to complete a specific predefined project or service, and not necessarily to determine the initial scope of work and objectives.
Fractional Manager: A fractional manager (sometimes called a fractional executive) is essentially the same as an interim manager. This designation just indicates that the agreement is on a part-time and limited basis. Good fractional or interim managers can lead positive change in an organization at a ‘fraction’ of the cost and in a ‘fraction’ of the time vs an internal full-time hire. It is not uncommon for interim or fractional managers to work on a part-time basis with multiple companies concurrently.
So what makes interim (or fractional) managers and executives different? Well, there are a few fundamental differences that separate this breed from the others. We will get into my top nine advantages of using an interim manager, but here are the main differences:
1) Interim managers have the responsibility for an entire process, and the authority to carry out mutually defined goals between the company owners/shareholders.
2) Interim managers are leaders. They are hired for the experience needed to execute their recommendations, not just for the advice.
3) Interim managers are paid for tangible results, not simply for creating a to-do list. They are held to a much higher standard as they have to ‘talk about it’, and ‘be about it’.
Oftentimes, interim managers are part of a company or organization which has a broad team of professional executives specializing in different areas of business. It can be extremely helpful in working with a company that has a group of various experts because more often than not, company objectives have overlapping causes and effects with other departments. Having a team of experts to address cross-departmental issues can help ensure you’re taking all the right steps.
WHO CAN BENEFIT FROM INTERIM MANAGEMENT?
There’s a myriad of reasons why a company might find themselves in need of an interim manager or fractional executive. For the sake of this post, I’ve broken down the list into two main categories:
1) Crisis: Companies from 1-2 employees to thousands of teammates find themselves in crisis every day. A few of the reasons you might find yourself in ‘crisis mode’ and in need of interim management include:
2) Change and Improvement: You might not be in ‘crisis mode’, but maybe something is going on which you just aren’t used to, or an area of your company you are looking to improve upon. Here are some examples:
WHAT’S WORKING WITH AN INTERIM MANAGER LOOK LIKE?
Interim management is a great option for companies facing any of the above-listed scenarios. Here’s a basic overview of what the process usually looks like. You will notice the first couple steps of the process are more like a ‘consultant’ role and the later steps are more akin to ‘project management’. Interim managers have a unique blend of experience which allows them to not only serve as an analyst and strategist but also as the leader, manager, and catalyst of that change. Here’s what a typical interim manager’s partnership with a client looks like from start to finish, which generally ranges anywhere from one month to two years:
1: Preliminary assessment(s)
Through any combination of 2-3 phone, video, and/or in-person meetings, the client and interim manager will assess not only the situation but also each other. Both parties need to feel comfortable. Here are the usual main objectives in this step:
a: There may or may not be a contract already after this stage
b: This step is usually no more than two meetings.
2: Analysis of Situation
After both parties mutually agree they want to work together, things move to further diagnosis. The goal of this step is to dig a little deeper and identify any underlying issues. The interim manager generally is paid for their time here even if there is not already a contract in place. Depending on the project and how much work needs to be done for this step, many interim managers may charge an hourly or daily fee for this work.
This step generally yields helpful information you may not discover on your own – similar to what a ‘consultant’ would do. So it is certainly still money well spent.
Here are the main objectives for this step:
Depending on the scope of the project, this generally takes at least a couple of meetings and a bit of ‘behind the scenes’ investigative and research time on the interim manager’s side before creating an actionable plan.
3: Action Plan
Here’s where it’s the interim manager’s job to outline a more thorough analysis of the situation, a recommended action plan, as well as ‘who’ and ‘what’ is needed in terms of resources. Don’t be surprised if what you thought you wanted differs significantly from what is proposed. This is the experience and expertise you’ve been looking for. This step generally includes the following:
4: Implementation – ‘Make it Happen’
This is really what separates a consultant from an interim manager. Interim managers make shit happen. They take personal responsibility and are effective project managers. Good interim managers have the right combo of soft skills to get teams aligned and the hard skills to execute mutually defined objectives that yield positive change. Usually, the implementation step includes the following:
Once both parties agree the job is nearing completion as outlined, you can move on to the final step. A good interim manager will make sure to do the following before finishing a job.
WHAT ARE THE ADVANTAGES OF INTERIM MANAGEMENT?
Ok, let’s get down to the brass tacks. Whether you found yourself in ‘crisis mode’ or you just are ready to ramp things up, there’s a ton of advantages to working with an interim manager. Here are my top nine benefits of using an interim manager:
4) No Long-Term Commitment
As you can see, interim / fractional management has a lot of benefits. I hope this article helped you better understand the subject. 😊