Just-in-time executives: The appeal of interim C-suite personnel
Written by Yolanda Brooks
When I was requesting interviews on the growing use of interim executives, I began to feel like a scandal-mongering tabloid hack.
Numerous high-profile C-suite temporary personnel work within the Canadian credit union system, yet one coy HR manager after another refused to go on the record about them. How could such a seemingly benign subject lead to this system-wide omertá? Is it that interim executives come on board only during times of crisis when publicity is unwanted?
In my mission to find out, I quickly learned this code of silence isn’t universal. In Europe, for example, organizations have been openly and proudly hiring interims for at least two decades, according to Jason Peetsma of the global search firm Odgers Berndtson.
A brief history of the interim concept
“Interims have been around [there] since the early 90s,” says Peetsma, who is managing director of interim practice at the firm’s Toronto office. “It was a concept born in the Netherlands out of tough employment laws and regulations and has been adopted in most European countries as a way of on-boarding executives for projects or for order.
“It had a lot to do with the recessionary pressures of the time, headcount restrictions and the risks and costs associated with a full-time hire. Organizations still had to react quickly to the economic pressures and interim executives were a viable solution.”
Top temp hires held in hire regard
One of the appeals of using interims is that they are paid on a per-diem or monthly basis so there’s no need to worry about golden handshakes if they don’t work out. With interims, that outcome is unlikely at any rate, says Peetsma, who emphasizes that high-level temporary hires are very well regarded on the continent.
“To be an interim executive in Europe is [to be among] the crème de la crème,” he says, adding that in Canada acceptance of C-suite temporaries has been slower to come, although that’s changing now. “The culture is shifting and more executives are embracing short-term, fast-results assignments and more companies are embracing interims as a solution,” he explains.
What sorts of solutions do interims offer? For starters, they’re not really brought in only if the sky is about to fall. Operating with a contract and a completion date, they serve a variety of functions, even in smoothly running enterprises. The Association of Interim Executives (AIE) describes these C-suite professionals as “highly experienced individuals or teams that parachute into companies for a short time (generally three to 12 months) to bring high-level experience, vision and quick results.”
Debate exists about the precise difference between interim and acting roles. While there is some crossover, generally speaking an acting head stands in for someone who still holds a title but can’t fill the position for one reason or another. An interim is covering a vacant position for a specified time, although some are invariably asked to stay on.
Interims are actively engaged
Interims aren’t like traditional consultants who descend, investigate and produce options for the in-house management team to implement. They don’t just make suggestions — they actively engage in an organization’s affairs.
“In all of my interim positions, I went in with the view that I had to [work] both strategically and operationally regardless of how long I was going to be there,” says Ian McKinnon, 59, who most recently served as CEO for eight months with the Canadian Association of Chain Drug Stores (CACDS). “I started to make the necessary decisions that I would have had I been there full time. You need the long-term view to do what’s right for the organization.”
McKinnon arrived at CACDS on 10 days’ notice, ready to roll from day one — and that’s another advantage of hiring interims. The speed with which recruitment companies can land an interim is an asset when time is of the essence. Once in, these interims have the experience necessary to navigate a steep learning curve while focusing on the essentials.
Decisions to make now – or defer to later
“My role is not to be the industry expert or the technical expert, says McKinnon, who worked as a CEO for 12 years over his 30-year-plus career. “It’s more to provide the communication, the environment, the strategy and operating discipline to ensure that the company runs efficiently. An interim has to decide what needs to be decided now and what needs to be deferred until the new CEO comes on board.”—Ian McKinnon, interim executive
Interim executives come in many forms, but two kinds — let’s call them stars and caretakers — are particularly common. Typically, stars are high-flying agents of change whose experience in a particular domain often outweighs that of the employees they’ve contracted to work with. Think of a technology start-up with lots of geek talent but little in the way of actual management expertise.
By contrast, caretakers steady the ship and stick to the chosen route — and they’re the likely option for most credit unions.
Using internal expertise
When ATB Financial of Edmonton, ($33.1 billion in assets, 654, 000 members) converted its banking system in 2011, the organization decided to try something different. Instead of taking the conventional route and hiring a team of external contractors to implement the new system, they seconded their existing executives to the project and contracted an interim team to take care of the day-to-day.
The organization chose highly experienced caretakers with a history in the credit union system because they were looking for stability rather than a change in direction.
Paul Duncan, 63, was brought on as the interim vice president of finance during the process. Duncan had a long credit union career, serving as CEO of B.C.’s Coast Capital Savings ($12.6 billion in assets, 504,054 members) and as chief financial and risk officer at Coastal Community Credit Union in Nanaimo ($1.7 billion in assets, 80,000 members).
“ATB’s strategy was clever because it is the opposite of what most financial institutions do when they have a banking conversion,” says Duncan, who was interviewed for the job by the man he was temporarily replacing. “Most financial institutions or credit unions use a team of contractors to bring in the new banking system.”
The permanent managers often have little say regarding the appropriateness of the enhancements or functions that the contractors have introduced and they usually have to undergo time-consuming training to understand the changes, Duncan points out. “That’s why ATB reversed the process,” he says.
“They wanted their permanent managers involved in designing and customizing the software and they wanted them fully trained for when they went live with the new banking system.”
Buying hiring time
Employing an interim is also one way of overcoming a difficult hiring process. Suppose an organization wants to implement a strategic plan in order to work out a new direction. With an interim in place, recruiters have the breathing space they need to reconsider their group’s leadership style.
As well, if a senior executive suddenly leaves, with no obvious successor, searching for a replacement can take months. With a competent caretaker in place, the board and human resources experts can take their time to ensure they get the best candidate.
A case in point happened in 2011 when the senior vice president of retail banking at Ontario’s Alterna Savings and Credit Union, ($2.3 billion in assets, 110,000 members) left after a few months on the job. The HR department of the Ottawa-headquartered credit union had a choice: leave the position vacant for six months while it searched for a replacement or opt for an interim manager.
It turned to Odgers Berndtson for help and within two weeks had Nick DiRenzo in place. The fit was so good that his contract was extended and eventually made permanent.
The inside edge
Another option is to hire an interim from the inside. That was the approach taken by Saskatchewan’s Conexus Credit Union ($4.2 billion in assets under administration, 118,000 members). In the spring of 2012, the group’s CEO took early retirement. The chief financial officer became the interim CEO. Then, Neil Cooper, vice president of finance, took the CFO’s place while the board and HR decided what to do next.
While Cooper’s role was more operational than strategic, his eight months on the job gave him plenty of time to ponder his future options.
“From my perspective it could be the next step in my career path in the credit union system,” he says. “I saw it as a good opportunity to learn what that position’s all about. Most people don’t get that opportunity until they are in the job and then they find out it is not what they expected and they don’t like it. I got to see and experience what it was like.” Ultimately, he returned to his role as vice president.
Wisdom for the taking
While interim executives in their early 30s and 40s do exist, most are veterans with decades of experience. Not yet ready for permanent retirement, they are open to the right offer, according to Peetsma.
“You’ve got this vintage of executives planning their exit from the workplace and you don’t have enough coming up behind them to supplement that,” he says. “Companies are faced with a shortage of skills, a shortage of leadership. And what is replacing them is a younger generation with little expertise. Interims provide an organization an alternative.” At Odgers Berndtson, the average age of their interim cohort is 52.
For Duncan, who is in his early 60s, the defined eight-month time frame was perfect. “ATB was looking for people who had the skill set . . . to fit in,” he explains. “I was semi-retired and could move but I didn’t want a permanent career. That’s the role of interim managers — filling a special requirement that they can fit some of their own parameters around, such as a time frame.”
When Cooper became interim CFO at Conexus, he worried about putting “interim” on his new business cards. As it turned out, transparency was the best approach.
An interim may also send a signal to stakeholders and the outside world that your organization is focused on getting it right rather than getting a quick fix
“At first I thought having interim on the card didn’t create stability,” he elaborates. “But in hindsight I think it provided a level of certainty. It didn’t create any illusions, so when we had another switch, nobody was left wondering what had happened to me.”
Of course, it is true that interims get called on during times of crisis, change and transition, so it is perhaps no surprise that HR managers are reluctant to discuss those moments in public. However, as hiring temporary executives becomes more commonplace, maybe the code of silence will be broken.