UK: ENTER, SLOWLY, THE BOARDROOM TEMP - INTERIM MANAGERS.

UK: ENTER, SLOWLY, THE BOARDROOM TEMP - INTERIM MANAGERS. - A company may be underperforming or reorganising, preparing a subsidiary for sale or struggling to cope with the unexpected departure or illness of a senior executive. In situations such as thes

by Judith Oliver.
Last Updated: 31 Aug 2010

A company may be underperforming or reorganising, preparing a subsidiary for sale or struggling to cope with the unexpected departure or illness of a senior executive. In situations such as these, there is a new breed of highly qualified personnel for hire; step forward, interim managers.

A new breed of manager is appearing in the boardroom. If, recently shaken out from your secure corporate nest, you are looking for a short-term contract to tide you over until your next managerial niche is sealed, then it's not you. Or if mid-way through a three-month consultancy post you are angling to prolong the job indefinitely, then you don't fit the bill either. But if you are contentedly committed to the permanently impermanent senior-executive life, then you're it - a self-employed, full-time, fully bona-fide career interim manager.

Interim management is a simple solution to corporate crises and managerial resourcing problems. It is also a fire that is taking a long time to catch hold in the UK. Nigel Corby of P-E International's Temporary Executive Service says it is 'fast becoming the most important resourcing tool open to companies grappling with the challenges, opportunities and threats of the late 20th century.' 'Fast'? A recent survey suggests that one in eight UK companies have never used it and 90% are unaware of it. Last year Sir John Harvey-Jones opened a seminar on the subject saying he'd never heard of interim management before and really didn't know what it was all about.

Putting him straight didn't take long. Interim management is a simple concept confused only by excessive nomenclature. Flexi, portfolio, leased or 'throwaway' executives; locum, interim or freelance managers; 'head renting' or 'executive leasing' are all terms used to describe this 'alternative resourcing option'. Martin Wood, head of PA Consulting Group's Interim Management Service (introduced into Continental Europe in 1987 and headquartered in London four years ago) describes it as a 'high-quality executive resource' useful in filling board-level and senior-management positions for temporary periods of change and crisis in private and public sectors. It involves providing experienced, full-time, professional executives to handle assignments at or near board level, for defined periods ranging from three months to a year or more. Originating in the Netherlands in the 1970s in response to restrictive employment legislation there, executive leasing percolated rapidly through the US, and has simmered gently in the UK ever since.

Companies commonly call on a throwaway executive to help out in a half dozen or so different situations. In the short term, specific skills or experience may be needed to turn round a division or business that is underperforming, to run a subsidiary or prepare one for sale, or to reorganise or establish a business. While the task of closing or selling off a company or joining a company close to bankruptcy may not appeal to an executive in search of a secure post - not so a manager for hire. Another common reason to recruit an interim is to bridge a gap resulting from a sudden departure of a senior manager through illness, dismissal or resignation when no clear successor is waiting in the boardroom wings. A company may also need temporary support if, for example, specialist skills cannot be justified full time but are required part time during a period of growth. Or an inexperienced member of staff may need a mentor to ease him or her into a new or more senior post.

Although interim management is still stumbling around at the foothills of corporate acceptance, this growing market is worth £70-£100 million a year. Cut back and downsized, many companies are now short of spare or appropriate talent, so a pool of temporary managers available to cover gaps in an organisation or deal with specific, high-level projects such as turnrounds is increasingly attractive. Interim managers filling that pool come in two sorts: the independents who track down their own work, and the rest who are attached to one or more of the interim executive agencies - 15 or so of which, according to an Exeter University survey, have 12% of the market.

However, estimates of the number of interim managers working in the UK vary wildly from 300 to 20,000 - a discrepancy explained by the gulf between purist and general thinking. At one end of the spectrum, PA's Wood views his temporary executives as a small, elite band of very senior, very professional, full-time interim managers who wouldn't get out of bed for less than a board-level position. Included in the larger estimates, he believes, are lowlier, self-employed corporate workers including consultants, computer programmers and other temporary corporate visitors. Charles Russam, of GMS Consultancy and secretary of the Association of Temporary and Interim Executive Services, (ATIES - a body formed in 1989 in order to improve understanding, promote good practice, increase ethical standards and liaise with government), defines the interim manager more broadly than Wood: 'Someone operating at board level or one level below on an independent basis.' He believes there are 10,000 'independent consultants' working at present.

Required to assume immediate and high-level responsibility at short notice, interim managers are typically experienced, successful and committed executives, usually aged 45 or older, with board or senior-management experience covering all business functions in industry, commerce or government. Ideally 'bigger than the role' that they are hired to fill, interim managers can make an immediate contribution to the post, which is usually in companies with turnover of £5 million-300 million.

Norrie Johnston is a new recruit to the profession. A chemical engineer by trade, he worked in a variety of traditional engineering businesses as sales manager, sales director, marketing director and managing director before deciding two years ago to embark on a less corporately restrained life. Now a full-time temporary executive, Johnston, who is 46 and married with two children, works 220 days a year for £70,000. He sees interim management as a means whereby companies can gain rapid, cost-effective solutions to their problems: rapid because someone can be brought in at days' rather than weeks' notice; cost effective because the rates charged exclude the usual overheads such as pensions, cars, national insurance or hiring and firing expenses. At present, when faced with a crisis, he says, most companies see their options as recruiting from outside (which is time-consuming), using a consultant (expensive and lacking on-line responsibility), or trying an internal transfer (may not be a workable option). 'What they don't often consider,' he says, 'is the interim manager, who sits between recruitment and consultancy.' Johnston's first sortie into high-level gap-filling was a nine-month post within a division of the Midlands-based multi-national, IMI. 'It had problems and having terminated the contract of the existing sales director, it wanted someone to plug the gap and solve those problems until it found a full-time replacement.' The problems, he says, were lack of sales, lack of results, lack of motivation, too many people and no structure in the sales department - a combination that needed rapid resolution by an experienced sales and marketing person with industrial expertise. Johnston arrived as sales director with full responsibility for a department of 40. He reviewed sales policy and strategy, sacked 15 staff, including a layer of management, and repositioned the sales team with more accountability and focus and helped in the hand-over to the new director - all of which, he says, demonstrates the difference between a consultant and himself. An interim manager not only develops recommendations and solutions, he is also wholly responsible for the implementation.

Implementation, for the interim manager, is often synonymous with unpleasantness. Ken Lucas, a 65-year-old based in Worcestershire, has been temping since 1982. Sacking employees remains for him the very worst part of the job - unless, of course, it's the managing director himself. 'That's easier. I can look him in the eye and say, "you've made a balls of it".' He accepts that strong-arm tactics may make him unpopular initially but not when people see the results. 'Below the ossified brains in the boards of some companies are usually some very competent and frustrated people.' All they are waiting for is some direction and a chance to prove themselves, he says.

Over the past 12 years, Lucas has completed 24 separate assignments averaging six months. His longest short-term post lasted 17 months; the shortest just 12 weeks. A farmer's son from Shropshire, he entered the merchant navy in 1945, then spent 12 years in the Royal Navy. Later, he joined Handley Page as a PA to the technical director and learned about computers and project management. Then came stints as data processing manager with a Midlands-based, gas-cooker company, general manager at Fisher Bendix in Liverpool, followed by general works manager at Dunlop's wheel-and-rim division. In 1975 he set up a furniture factory for Hygena in Worcester and later he set up another furniture factory, running it for seven years before it was taken over by a larger group. He was then, aged 52, 'surplus to requirements' and joined 3i as a locum manager. 'By 1982 I had collected a lot of experience in a lot of different industries and functions. I was also pretty well up-to-date with my management techniques. So interim management was just the job.' Seven years later he signed up with PA.

Lucas has experienced the whole gamut of temporary tasks, from turnarounds to closures. The majority of his placements are as managing director or chief executive and carry sufficient clout to do whatever is necessary. Most recently, he did a five-month bridging job in a textile company until a new MD arrived. Prior to that he was in Milton Keynes getting a company into a saleable condition - 'We chopped it back to its core, reduced the staff from 300 to 170.' Previously, he spent 15 months closing down an old chemical company that did not fit the portfolio of its owners, a leisure group. That was tricky: one wrong step could have left half of South Wales awash with dangerous chemicals.

In return for working 12 hours a day, living in hotels and seeing his wife Margaret only at weekends, Lucas earns in the region of £90,000, which PA, rather than the client, pays directly to him. The life of the temp suits Lucas perfectly, he says: 'I like continual change and challenge. Most people don't like change but I do.' The key to managing that change is 'good all-round appreciation of what makes people tick'; also, patience, the ability to motivate, speed in assessing people's capabilities, strengths and weaknesses, a good understanding of how a company's cash flow works and the ability to converse with banks and investors. Least important is knowledge of a product or industry. That can be picked up quickly. But getting results is paramount. 'There's a lot riding on me. I'm very conscious of how much these companies are paying for me, and my reputation is crucial. It's all I've got to sell.' Committed, cost-effective, capable, bigger than the job, and easily disposable. Why then are these buck-stopping, managerial mavericks still used so rarely? Johnston believes that awareness is key: 'We need a higher profile. The majority of board members are not aware of interim managers as a worthwhile option.' Too right, agrees Lucas. Overstretched directors often don't realise they have problems that could be solved by an injection of extra expertise. Also, who likes admitting that they may have made a mistake or could do with help? Not all companies, thinks Wood. Particularly not those whose culture has traditionally required cradle-to-grave attendance and to whom the notion that any outsider could come in at short notice and shake things up is anathema.

PA's recent survey showed that 100% of companies that have tried interim management would use it again. But it's an unregulated market and the big boys are concerned that a few incompetent independents might queer the pitch for them all. Interim managers want to be seen as a serious option. 'Too many people,' says Russam ruefully, 'still see us as merely recycling clapped-out ex-ecutives.' And that's one gap which corporate life's most experienced gap-fillers are finding hard to bridge.

The essential interim manager.

Age: 45-plus. Sex: Male or female.

Experience: Probably five to 10 years at senior, board level in companies with minimum of £5 million turnover. Preferably experienced in a variety of companies and industries. Good consultant skills and the ability to listen to people at all levels of the organisation. Previous consultancy experience is extremely relevant. Suitably over-qualified for the position in order to 'hit the ground running' on arrival.

Attributes: Adaptable and flexible. Ability to adapt rapidly to different culture, sector or organisation. Able to prioritise. A 'doer', rapid decision-maker, results-orientated and high achiever. Capable of producing work of very high quality. People-orientated with ability to motivate and handle a new team of people quickly. Exceptional in terms of interpersonal skills, energy and ability to implement decisions effectively. Self-confident and non-status conscious.

Targets: Usually financially secure - self-made, early retired or have successfully run their own limited company. Looking for a second career offering variety and new challenges Mobility: Must be highly mobile. Assignments generally require living away from home during the week or longer. Working hours: Long - possibly 10-12 per day. Assignments typically last from three months to one year.

Terms and conditions: Self-employed but with opportunity to work 220 days a year. Can work either independently or for an agency. Agencies usually take 25-33% of daily fee. Fee ranges between £300-600 per day but can rise to £1,000.

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