Insight

Insight

With the haste of day to day activity we still need time to stand back and take an objective look at our businesses.

Here we will post a series of short articles and blogs based on our experience and observations within the business world.

Some you will nod your head vigorously at, whilst others you may not agree with, but we hope it sparks debate and encourages you to take a fresh look at your business.

Interim, Your Flexible Friend

4 Cost Effective Ways To Use An Interim

Posted 25/11/09 by Marc Stone

Exiting the worst of the recession? Dams are bursting with workload? Year end’s upon us? However, businesses can still be innovative and cost effective about how they resource up.

Very few hiring exec’s consider the number of ways that you can utilise an interim manager. Most see it as “I need an interim 5 days a week for 6 months”, without considering;

- What you need an interim for?

- How long & often you need an interim for?

- What additional value and ROI you can squeeze out of a high calibre interim?

And to be fair some interims are inflexible carrying out one interim assignment at a time and then moving onto the next. But shouldn’t we consider different interim product sets and resourcing models? There are other permutations as far as your imagination takes you, but you get the idea!

Interim Manager/Executive

Standard interim contract for one or a group of interims over a block period (typically 4 weeks - 12 months).

Consultant

Short term initial strategic/project delivery for business to follow up and roll out. Intermittent follow up thereafter to ensure business is on track with plan and to correct deviations (1-3 months then 1-3 days/month thereafter).

Non Exec Director

Board Level steer for 1-3 days per month (or per quarter). Typically businesses from £10m+. Brings control, integrity, challenge, strategy and contacts.

Intermediate Interim Exec

Same as Non Exec, but to support Divisional Board Members in the middle of large structures. Or Support Group FDs of SMEs, but without the Non Exec tag. Only required 1-3 days per month.

Which Type of Business Would Benefit?

Type of Business:

- Group of companies £50m - FTSE250?

- Distressed business (stressed senior managers who work 150% and 100 hours per week).

- Poor controls.

- Low morale.

- Suffered in recession.

- Lack of balance sheet/cash control.

- Lack of confidence/trust in Business Unit FD's.

- Require one off control reviews. Full transparency and tipping out of balance sheet/cash/true operating run rate/company healthcheck.

- Support a struggling 1st time FD.

- Due diligence planning and control (can be done 1-3 days per month with internal people gathering data thereafter).

- NED type control/steer/challenge on key projects if Group FD has 100 items on his agenda and needs an equivalent to ensure projects are on track, but can only afford 1-3 days per month.

Who Benefits?

Benefits to Business:

- Interims become your cost effective “flexible friend” (1 day, 1 week, 3 months, 12 months?).

- Trust and confidence in high calibre, independent interim. Long term relationship.

- Cost effective way to “raise the bar” within your teams. It’ll rub off on the rest of them!

- More than a coach. Can deliver for you too.

- Get control back in your business.

- Find out what your business has really been up to during the recession!

- Interim can make the tough choices and carry the can.

- Do you want to remain at the starting blocks behind your competitors? Push ahead on projects that have been shelved. Your competitors are under “starters orders”!

- see “10 Reasons to ...”

Benefits to Agencies:

- Market penetration and brand loyalty. If interim has 1 interim contract and 1 or 2 intermediate exec contracts through that agency, then the agency have loyalty in 3 businesses instead of only one. Credible relationships & integrity, not contracts, encourage loyalty.

- Four products to sell rather than just "do you need an interim?". What kind of interim? Is it full time? One week? 1-3 days? Per month. Companies waste a lot of money on interims towards the end of contracts where often times they are a comfort blanket to provide control and a steer. That work could be done by popping in 1 day per week/fortnight/month.

- Saves businesses £k's and encourages client loyalty.

Benefits to Interim Consultant:

- For true interims allows them to run their Ltd Co as a consultancy (multi client, with maybe 1 core contract being run with 1 or 2 additional odd day contracts during a period).

- Helps to satisfy IR35.

- Provides variety that Interims enjoy.

- Widens sector exposure more quickly. Makes them more marketable commodity.

What If?

Q: 1-3 days turns into a request for 3 months?

A: Superb. If interim is out of major contract then easy to extend into. If Interim is tied up in other long term contract then fulfil with similar quality interim via network or through trusted agency.

Q: Clients do not trust Intermediate Interim Exec?

A: You only gain trust through personal relationship and contractual back up. Meet informally with no obligation to ensure the perfect personality type and individual credibility. Interims are the same as any other consultancy business and should not divulge non public client information.

Q: Group FDs believe they'll cope?

A: They'd cope a lot better, and not just cope, but flourish with part time additional senior equivalent head. Say cost was £12-18k per annum. Poor project steer costs £m's in wastage, slippage and misdirection. Might not be able to afford full time Project Director at say £150k p.a. (all in costs). Or the key blockers may be in a smaller business within the group. May need Intermediate Interim Exec at £750/day for 2 days/month and an interim project manager delivering on the ground for £300/day for 20 days/month. More cost effective for smaller group.

To these people, ‘Please, for once, just report the true underlying performance of the business so that we can make informed decisions’. Their colourful ramble is not the first time that the Board will have heard it. It helps no one by lying apart from the chance of pocketing their next bonus. But that bonus may be their last for a while!

To all CEOs out there if you have a business that is struggling get an operational grip of the balance sheet and cash flow. This will ensure that the business is reporting what it says on the tin. Everyone can then focus on the real operational issues and make real changes and trade its way out of trouble in true turnaround style.

Lehman Bros. bankruptcy will always be synonymous with the start of the banking collapse, but it also sees the dawn of a new age of transparency which I hope sees pioneering and skilled managers shine.