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The New Interim Report

Research and Analysis on the UK Market for Interim Management
and Other Fast-Track Executive Re...
Introduction                                 1

Research objectives and methodology          2

D e fining interi...


The pressure on business to deliver results, and to
simultaneously operate at ever-in...

Research objectives and methodology

Objectives                     ...

Defining interim management

For the purposes of this report we define interim     ...
THE INTERIM MANAGER               4

The interim manager
In this section we estimate how many interim             inter...

Interim management practitioners are taking this                 The above average of 151 ...
THE INTERIM MANAGER              6

Average length of assignments                                    own personal conta...

supporting their daily rates in client engagements and        Management to a high of £868 f...

The benefits of interim management

In our September 2007 online r...

The answers fall out into eight broad categories            The difference i...

Business exposure
A sudden gap in the management team and slow                   major p...

Applying this contribution multiplier to candidates at
this level, the financial cost of s...

Interim management and project management
As we saw earlier ...

Interim managers as agents of change

Organisations which need to transf...
INTERIM MANAGERS AS AGENTS OF CHANGE                         14

The perceived poor track record of UK companies at    ...

Women and Interim Management
In our September 2007 online candidate survey, 46  ...

choice and priorities – not liking the uncertainty,
preferring not t...

Paradoxically, part-time work is also a possibility.
Classically, interim manageme...

Interims in Permanent Recruitment
From time to time, we at Execut...

In this report we have sought to uncover the latest
trends in the fast-growing interim m...
     Winchester (HQ)                     North England (North East)          East of England
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Interim Report


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The aim of our research was to seek answers to a number of questions, among them:

-Which business sectors are most likely to use interim management?
-What are the key factors driving the market?
-What daily rates apply in this sector and how do they vary between job functions?
-What do clients (and practitioners) think are the benefits of interim management?
-What roles leave organisations the most
vulnerable if they are left vacant?
-What types of business exposure are created by gaps in a management team?
-To what extent is interim management an
effective alternative to consultancy?
-Can interims be leveraged as an alterative source of candidates for permanent roles?
-What prevents more women from pursuing
interim careers, and is this possible to change?
-What role do interims play in change management?

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Interim Report

  1. 1. The New Interim Report Research and Analysis on the UK Market for Interim Management and Other Fast-Track Executive Resourcing
  2. 2. CONTENTS Introduction 1 Research objectives and methodology 2 D e fining interim management 3 The interim manager 4 The benefits of interim management 8 Business exposure 10 Interim management and project management 12 Interim managers as agents of ch a n ge 13 Women and interim management 15 Interims in permanent recruitment 18 Conclusion 19
  3. 3. 1 INTRODUCTION Introduction The pressure on business to deliver results, and to simultaneously operate at ever-increasing efficiencies, has never been greater. Headcount reductions, hiring “ The interim management freezes, outsourcing and reorganisations are everyday sector has grown by orders occurrences, as are corporate ch a n ge programmes of magnitude over the past aimed at delivering strategic business transformation or even just short-term improvements to net profit. In eight years. ” this cost- and results-oriented business climate, the question of optimal resourcing is never far from the surface, and the debate doesn’t stop at numbers of production workers or front-line customer service staff Online, in conjunction with the Institute of Management – it extends straight up to a company’s most senior Cons ulta ncy, commissioned Sambrook Research executive roles. International to carry out an independent study of the interim management market in the UK. The Sambrook An effective resource in responding to these competing Re p o rt on UK Interim Management was published in 2000. pressures is being embraced by a growing number of In 2004 and 2006, Executives Online published In the companies in the UK: interim management. By this we Interim and the fi rst edition of The Int e rim Report. mean the strengthening of a company’s management team by the addition, on a fixed-term contract, of one Since then, things have moved on and in order to keep or more highly experienced senior executives. pace with this fast-moving sector we have once again conducted further market research, both among users Executives Online is an innovative recruitment company of interim management and interim managers with a 15-year history of interim management practice themselves. In this new re p o rt we present the results and recruitment. We have seen the interim managers of that research. registered with us grow from a few thousand in 2000 to over 15,000 UK interim managers today. Visitors to We believe the report will make interesting reading our web site, a veritable treasure-trove of helpful information on interim not just for companies that are already familiar with management and other fast-track executive resourcing, interim managers, and current and aspiring practitioners, have grown to number tens of thousands of visits per but also for companies or organisations for which month. Our own business and the interim management interim management represents an as-yet-untapped sector have grown by orders of magnitude over the resource. past eight years. We believe that as more and more companies come to recognise the benefits that interim management can offer, a continuing expansion of this sector is highly likely. However, the nature of the industry is such that reliable financial and measurement information is not Norrie Johnston easy to come by. Accordingly, in 2000, Executives Chairman, Executives Online
  4. 4. RESEARCH OBJECTIVES AND METHODOLOGY 2 Research objectives and methodology Objectives of candidates. Some had been placed by Executives Online into interim management roles, but most had The aim of our research was to seek answers to a not. (Their areas of functional expertise are shown in number of questions, among them: Table 1.)  Which business sectors are most likely to use interim management? TABLE 1  What are the key factors driving the market?  How many days a year on average do interim Functional Expertise of managers work? Interim Managers Surveyed Percent of total  What daily rates apply in this sector and how do Call Centre Management 3% they vary between job functions? Change Mgt 10%  What do clients (and practitioners) think are the Finance 9% benefits of interim management? HR 10%  What roles leave organisations the most IT 6% vulnerable if they are left vacant? Sales/Mktg 7%  What types of business exposure are created by MD/CEO 17% gaps in a management team? Supply Chain 4%  To what extent is interim management an effective alternative to consultancy? Operations 28%  Can interims be leveraged as an alterative source Mgt Consulting 7% of candidates for permanent roles?  What prevents more women from pursuing interim careers, and is this possible to change? The survey timings and numbers of  What role do interims play in ch a n ge management? respondents are as follows: Methodology  Online research among 189 interim and change managers – March 2002 In nine separate market research initiatives over 2002-  Telephone research among 100 managers and 2007 we obtained the views of a large number of directors of UK companies – March 2002 practising interim managers and the clients who employ  Online research among 519 interim managers – them, both by telephone and via online questionnaires. June 2003 In most cases the respondents submitted their answers  Telephone research among 102 interim managers anonymously and were not aware of the identity of – November 2003 the firm sponsoring the research .  Online research among 127 interim managers – To obtain the views of clients and potential clients for January 2004 interim management services, we conducted in-depth  Telephone research among 84 corporate users of telephone interviews (lasting between 20 and 30 interim management – February 2004 minutes) with 100 directors of UK companies in 2002  Online research among 170 interim managers – and, in February 2004, with 84 senior managers or May 2006 directors from companies which are established users  Online research among 200 customers and of interim management. In 2006 and 2007 we prospective customers of Executives Online’s updated these findings via online surveys with the interim recruitment services – July 2006 same audiences.  Online research among 102 interim management The interim managers approached for participation in customers and prospective customers, and among the research were all registered onto our Talent Bank 327 interim managers – September 2007
  5. 5. 3 DEFINING INTERIM MANAGEMENT Defining interim management For the purposes of this report we define interim more interim managers preferred to classify management as being: themselves as one thing or the other, with fully 42% describing themselves purely as an interim manager. The provision of a mature, professional manager, well qualified by re l evant practical experience, either to fill When asked how much of their time was spent as an a gap in permanent staffing or to deliver a specific interim manager and how much as a consultant, 65% business result within a limited time period. said they spent more than half their time in an interim management role. Most of the remainder (28%) said It is important, however, to recognise that the more than half their time was spent as a consultant. boundaries between interim management, change management and consultancy are not always clear- The views of clients on the issue of interim cut. An individual who is temporarily on assignment management versus consultancy are also interesting. with a company may think of him or herself as an Although the market does not wholeheartedly see interim manager but be viewed by the employer as a interim managers as a natural alternative to consultant. Or vice versa. management consultants, a significant number of client companies do subscribe to this idea. In our In our most recent research , bridging a slow permanent telephone survey of the client sector, 43% of recruitment process was the #1 reason for the client respondents agreed that interim managers were an engaging the interim manager. We address the use of alternative to management consultants, while 52% interims as candidates for permanent executive roles disagreed. The reasons they gave are set out in Table in more detail later in this report. 2 below. This flexibility in job title is borne out by the TABLE 2 Base: 84 senior executives (Feb 2004) responses given by 327 interim managers in our online research September 2007: “Interim managers are a natural alternative to management consultants” CHART 1 Base: 327 interim managers (September 2007) Reasons for agreeing Mentioned by More cost-effective 39% Average percentage of time spent as: Get experience and skills 8% 5% 9%  An interim manager More results orientated 8% 31%  A consultant Focused 6%  A contractor  Other (project manager, Reasons for disagreeing 55% mentor, change agent) Consultants advise & bring ideas 2% Internal perceptions 2% Cost 2% Different agendas 2% Only 16% of respondents said they operated “I have interims’ skills” 2% exclusively (100%) as an interim manager, consultant Consultants aren’t in head-count 2% or other. This openness to new labels and positionings appears to be on the rise; in our May 2006 research,
  6. 6. THE INTERIM MANAGER 4 The interim manager In this section we estimate how many interim interim managers (67%) were working on assignment, managers are on assignment in the UK at any one most of them in a full-time capacity. The remaining time and report on how many days a year they work 33% were not working. (See Chart 2 below.) and where that work comes from. We also provide data on their daily rates. CHART 2 Base: 327 interim managers (Sept 2007) How many interim managers are on 11% How are you working at the moment? assignment in the UK?  full time This is not an easy question to answer but at the 16% 40%  not on asssignment time of our 2000 survey it was estimated that there  part time were some 2,400 interim managers active at any one 33%  a combination of several time in the UK. This was based on responses given by part-time assignments leading suppliers of interim management services and by interim managers themselves. Table 3 below records the percentage of interim Today, that figure is undoubtedly higher. Executives managers who reported that they were on assignment Online’s own candidate roster has grown by a factor at the time of our various surveys. The application of of 7 between 2000 and 2008, and we are seeing a interim management resource appears to be becoming constant stream of new interim managers who have more flexible, with more interim managers working completed at least one successful assignment. We part-time or structuring their work as a “portfolio” estimate today that there are more than 15,000 serving multiple clients each less than full-time. interim managers operating in the UK. Although the re p o rted utilisation of interim managers Work patterns of interim managers has dropped from May 2006 when fully 76% were on An analysis of responses to our latest online assignment, it has not reverted to the levels reported questionnaire reveals that at the time of the survey in 2004 and earlier when likelihood of being in work (September 2007) more than two-thirds of the stood at roughly 50/50. TABLE 3 March 2002 June 2003 Jan 2004 May 2006 Sept 2007 Full-time assignment 32% 38% 56% 40% Working in part-time assignment 51% 12% 13% 13% 16% Working in multiple part-time assignments 4% 5% 6% 11% Not on assignment 49% 51% 44% 24% 33%
  7. 7. 5 THE INTERIM MANAGER Interim management practitioners are taking this The above average of 151 days worked in the year increase in utilisation in stride. Despite the proportion preceding September 2007 compares with averages of candidates working on assignment at the time of of 165 in the year before May 2006, and 156 in the our survey increasing (to 67% in assignment from only year before September 2003. Most functions now show around 50% compared to 2004 and earlier), they lower utilisation, with days worked by operations report, on average, a similar workload versus the managers and change managers showing 25-30% previous year. In the September 2007 survey: fewer days worked in the year. This underscores the sense of a cooler market than in 2006, which was  45% reported that their work level was the same evident in the snapshot fi g u res (p revious page) on as in the previous year what percentage of interims were on assignment at  31% reported being less busy than in the the time of the survey. Nevertheless, some functional previous year areas show increases with IT and sales interims  24% reported being more busy than in the logging many more days in the past year – increases previous year of 50% or more – than previously. Days on assignment in last year TABLE 5 Base: 327 interim managers (Sept 2007) Turning to the actual number of days worked by the Years as an interim Days worked in last 12 interim managers in the 12 months prior to September manager months (to Sept 2007) 2007, the average was 151 days. However, as Table 4 Less than 1 year 109 below shows, there was considerable variation from 1 – 3 years 164 function to function, with those engaged as programme managers and project directors averaging 189 days a More than 3 years 172 year and those working in marketing reporting only 122 days on average. As Table 5 below shows, the length of time that the individual had been working as an interim manager TABLE 4 Base: 327 interim managers (Sept 2007) had a bearing on the number of days that he or she had worked in the previous 12 months, the least Days worked in last 12 Function months (to Sept 2007) experienced recording significantly fewer days. Call Centre Management 167 The relative strength in utilisation of the more- Change Management 141 experienced interims shows that the possible market Finance 137 cooling indicated by the drop in days billed and HR 154 likelihood of being in assignment is being borne much IT Director 180 more strongly by interim managers just entering the field. Marketing 122 MD/CEO 139 Operations 152 Project Manager/Project Director 189 Sales & Marketing 181 Supply Chain 145 Average 151
  8. 8. THE INTERIM MANAGER 6 Average length of assignments own personal contacts and 38% came through agencies. There is significant variation in the duration of interim Personal recommendation is one fertile source of new management assignments but typically they last for work for interim managers. In our January 2004 several months (as opposed to lasting for weeks or research among 127 interim managers, we found that extending into years). Between 2006 and 2007, the on average they are asked to recommend another assignments worked by Executives Online candidates interim manager or agency 4.4 times a year. One- lasted between two and 24 months, the average fifth of them (21%) reported making seven or more assignment lasting 6 months. s u ch recommendations every year. (See Chart 3 below.) Sources of work Daily rates of interim managers In our May 2006 online survey we asked interim In all of our surveys we asked interim managers to managers what percentage of their work was self- indicate their daily rate on their last assignment. As generated and what came from agencies. We found Table 6 below shows, a very wide range of rates was that on average 60% of their work arose through their reported, reflecting the fact that certain areas of expertise are more highly valued in the marketplace CHART 3 Base: 127 interim managers (Feb 2004) than others. (These variations from sector to sector are examined in more detail in the next section.) If ever, and on average, how Some interim managers said they were earning less many times are you asked to 10% recommend either an interim than £300 a day, whereas at the top end of the market 10% management a gency or another others were able to command daily fees of more than 37% interim manager? £1,000. 11%  never  1 to 3 32% The reported average of £648 per day is well above  4 to 6  7 to 10 that reported in any prior year, an indication that,  11 or more despite a fall-off in utilisation, prices have not fallen, or at least not yet. The interim managers in work are TABLE 6 Mar 02 Jun 03 Nov 03 Jan 04 May 06 Sept 07 Respondents Respondents % Respondents Respondents % Respondents % Respondents % £200-299 34 7 2 2 3 2 7 2 £300-399 65 14 14 13 15 10 32 10 £400-499 92 20 22 21 26 17 55 17 £500-599 82 18 26 24 32 20 63 20 £600-699 66 14 17 16 36 23 66 20 £700-799 50 11 8 7 14 9 32 10 £800-899 20 4 5 5 15 10 21 7 £900-999 15 3 8 7 3 2 10 3 £1,000-1,099 15 3 4 3 4 3 18 6 £1,100-1,199 4 1 0 0 2 1 5 2 £1,200-1,299 4 1 1 1 2 1 8 2 £1,300+ 13 3 1 1 3 2 6 2 Total 189 460 100 102 108 100 155 100 323 100 Average £587 £590 £571 £604 £597 £648
  9. 9. 7 THE INTERIM MANAGER supporting their daily rates in client engagements and Management to a high of £868 for those acting as an in many cases increasing them. The data stating the MD or CEO. However the research also highlighted most experienced interims are the ones being utilised some extremes of earning capability within the interim align with this view, because generally, the more manager community. For instance, 12% re p o rted that experience, the higher the daily rate. their day rate was less than £400 while 12% said that it exceeded £1,000. On the basis of the average daily rates mentioned above, what can we say about the annual gross income Our September 2007 online survey of interim managers being earned by the average interim manager today? also found a difference between the average daily Taking a daily fee of £650 and applying it to the 151 rate earned by male and female interim managers – days a year that interim managers, on average, spend the men averaging £660 and the women £569, on assignment (see earlier section), we arrive at a against an overall average daily rate of £648. We total of £98,000 a year, which is virtually unchanged explore the subject of women in interim management from the income levels we found in 2006. in more detail later in this report, from page 15. Differences in daily rates between sectors Our research has revealed considerable variations between the average daily rates interim managers command, depending on the job functions they are engaged in. In the September 2007 survey (see Table 7 below) the average rates by job function ranged from a low of £472 for interim managers specialising in Call Centre TABLE 7 Base: 324 interim managers (September 2007) Function Average daily rate £s Call Centre Management 472 Change Management 773 Finance 669 HR 584 IT Directors 656 Marketing 574 MD/CEO 868 Operations 519 Programme management 756 Sales & Marketing 521 Supply Chain 662
  10. 10. THE BENEFITS OF INTERIM MANAGEMENT 8 The benefits of interim management In our September 2007 online research , we asked our quickly get people on side received many mentions 102 client respondents to tell us wh i ch up to three from both the interim managers and their clients. aspects they felt are the most important qualities in However, the clients are far more likely to rate the an interim manager. interim managers’ skills and experience for the p a rticular job at hand than the interim managers It is clear from their responses (see table 8) that users themselves, who prize their “wide range” of experience of interim management place a high value on the and distance from corporate politics relatively more task- and results-orientation interim managers bring, strongly. See Table 8 for details. as well as the fact that they can be recruited with highly specific skills, experience and tra ck record. Their This disparity may reflect the reality that, while objectivity – willingness to speak their mind, interim managers are often hired specifically for their independence and the fact that they manage to not tra ck record in a particular area, it can be frustrating as be side-tra cked by company politics – also received the practitioner to be “pigeonholed”, asked to deliver many mentions. the same sort of assignment over again. It is interesting to compare the responses given by By contrast, most of the clients who engage an interim management clients with the views expressed interim manager are doing so in order to reduce risk, by interim managers themselves. In the interim by employing someone who’s “done it before”, and manager version of the September 2007 online survey, are not so interested in transferable skills. we asked them too to nominate up to three aspects they felt were their most important qualities. How and why interim managers are deployed Our September 2007 online research asked the The client and practitioner views are very mu ch in interim management clients to describe the nature of alignment, with some interesting exceptions. By and the last situation where they used an interim manager, large, attributes such as the ability to think strategically and the interims themselves to indicate the two main but also implement, results focus, and the ability to reasons for their clients' engaging them. TABLE 8 102 clients and prospects, and 327 interim managers, September 2007 Main benefits of interim managers Interim Mentions Client Mentions Ability to mentor 84 7% 9 3% Quickly get people on side 145 11% 34 12% Strategic but also implement 224 18% 55 19% Independence 37 3% 13 5% Not side-tracked by politics 141 11% 18 6% Resilience 55 4% 11 4% Results focused 196 15% 50 18% Skills/experience for job 73 6% 54 19% Wide range of experience 203 16% 22 8% Speak mind where req'd 110 9% 19 7% Total mentions 1,268 285
  11. 11. 9 THE BENEFITS OF INTERIM MANAGEMENT The answers fall out into eight broad categories The difference in perspective may be representative summarised in table 9. While both the interim of an issue we have explored in prior years’ editions managers and clients say that access to skills is a very of this report, namely, whether clients view interim important reason they engage, their answers management as a strategic resource. The last time we elsewhere – and the fact that they don’t agree – tell asked the question, the clients were mixed on an interesting story. See table 13 for more detail. whether interims were looked upon as a strategic resource, with 56% saying not, and 42% yes. It In contrast with our earlier question about the most appears from the answers given about the most important qualities of an interim manager, where the important reasons for engaging interim managers – interim managers mentioned the breadth of their to fill a gap, to bridge a slow permanent search – that skills over the “focus” which the clients held in higher many clients’ motivations are still quite tactical. esteem, here the strongest reason for the last engagement is acknowledged to be access to specific Noting the motivations for engaging an interim skills. Not surprisingly, the clients rate this strongly manager as tactical, however, should not be read as too. Elsewhere however, the answers diverge. The trivialising them. The cost of an unfilled executive role clients were far more likely to mention a sudden gap exceeds £100,000 even for just a few months' gap at in the management team and – interestingly – a middle management level, and into the £millions for permanent vacancy they couldn’t fill fast enough as a chief executive in a major enterprise. See next page reasons they engaged an interim. This compares to for a further discussion of business exposure caused the interim managers themselves who more by key executive vacancies. frequently mentioned change management and the implementation of a major initiative as the stimuli for their last assignment. TABLE 9 102 clients and prospects, and 327 interim managers, September 2007 Reasons for most recent interim engagement Client Mentions Interim Mentions Business turnaround 6 6% 40 7% Implementing a major initiative 7 7% 83 14% Strengthening a project team 9 9% 22 4% Sudden gap 16 16% 42 7% Needed skills 16 16% 183 32% Change management 9 9% 127 22% Mgt capacity / bandwidth 10 10% 30 5% Couldn't hire permanently fast enough 22 22% 47 8% No answer 7 7% Total mentions 102 574
  12. 12. BUSINESS EXPOSURE 10 Business exposure A sudden gap in the management team and slow major problems they encounter when a senior team permanent recruitment rank strongly among reasons member leaves unexpectedly. clients engage an interim manager. How exposed do these vacant executive roles leave companies? In our TABLE 10 Base: 102 clients and prospects September 2007 research, we explored this question with both our interim managers and corporate hiring managers. Impact of sudden departure - company view Instability within the team 66% Despite experiencing unexpected senior team departures, Loss of organisational momentum 63% companies appear to be generally unprepared for this Knowledge lost 61% risk. Just one in four companies surveyed said their Projects get stalled 47% company had plans in place to cover the sudden Decisions delayed 45% departure of a member of the senior team: Senior team distracted 35% Uncertainty among customers 29% CHART 4 Base: 102 clients and prospects September 2007 Poaching of staff 25% Competitors take advantage 14% Plans in place to cover sudden 13% departure of senior team member  no 24%  yes 63% A critical determinant of this form of business exposure  dont know is the difficulty in filling a senior role. The businesses and executives surveyed report that MDs and CEOs are the toughest roles to fill at short notice, with these roles receiving the most votes from companies Those one in four companies who say they have a and 42% of votes from the interim managers. (see plan in place outline a mix of procedures. Some Table 11.) describe quite robust systems involving succession plans, interim management, consultants or other There is also a financial implication of an unexpected methods. There is a small minority whose idea of a recruitment gap which those who do not contingency plan is to simply work within the departing plan are failing to recognise, particularly when it’s the executive’s notice period, but this ignores the senior MD or CEO in question. managers who leave because of illness or other reasons necessitating an immediate departure. A director or senior manager is on average worth at least three times their annual salary in terms of their Furthermore, even if a senior manager hands in their contribution to a company. If it takes four months to notice in the usual way, traditional recruitment find the right person, the recruitment gap is costing typically takes around four months to find the the business an equivalent of a full year’s salary in replacement, with additional months to settle them lost contribution to the organisation. This isn’t in and make sure they are right for the job, whereas a allowing for the two months it takes to get the senior typical notice period may be only three months. manager fully contributing in the role. According to the Directors’ Pay Report 2007 from IDS, the pay and This general lack of contingency planning and risk benefits consultancy, during the last twelve months, management is surprising given the wide scale impact the average FTSE 100 chief executive earned £3.17m a sudden departure can have on a company. per year, with FTSE mid-250 chief executives earning Companies, and our interim managers, cite a host of an average of £1.43m.
  13. 13. 11 BUSINESS EXPOSURE Applying this contribution multiplier to candidates at this level, the financial cost of such a gap runs to £4 million – £10 million. Even if this multiplier is applied to a senior manager or director role outside the FTSE 350, it is clear that the four months delay while the business finds the right person, has a huge bottom line impact on UK businesses. TABLE 11 Base: 102 clients and prospects September 2007 Toughest to replace - company’s view Rank MD/CEO 1 FD 2 Chairman 3 Sales Director 4 Marketing Director 5 Production/Operations Director 6 IT Director 7 HR Director 8 Procurement Head 9 Toughest to replace – interim’s view MD/CEO 42% Production/Operations Director 17% Sales Director 10% FD 6% Marketing Director 6% Chairman 5% IT Director 5% HR Director 2% Procurement Head 2% Not stated 3%
  14. 14. INTERIM MANAGEMENT AND PROJECT MANAGEMENT 12 Interim management and project management As we saw earlier in this report, one area which Second, many projects are “one-offs”, demanding one- appears to be driving much of the growth in the off skills and knowledge that quite possibly do not market for interim management is the demand for exist within the company but are alre a dy possessed by project management skills and experience. Interim a specialist interim manager. managers with specialist project and programme management skills are being deployed by more and Interim managers are also becoming an important more companies in order to drive through or support resourcing option. One in five of the 84 companies major initiatives. (See Table 9 on page 9 for the we spoke to in our February 2004 survey specifically reasons given by clients for using interim managers.) said that they needed to keep their permanent headcount to an absolute minimum; also they said At Executives Online, over 10% of our client they needed to stay in a maximum state of readiness instructions are specifically for project managers or to handle new projects. programme directors, and project management enquiries have more than doubled in the past year. Against this back d rop, the demand for project manage- ment skills deep in the organisation is growing. Our Reflecting this increased demand for the short-term March 2002 study of 100 companies found that 34% injection of skills and experience, Executives Online’s of corporate change projects were managed at board candidate roster today includes more than 4,000 level, with a further 22% being directed by the MD. In project managers and programme directors. July 2006, customers surveyed reported a lower pro p o rtion directed from above (only 10% led by MD), There are a number of reasons why interim manage- with project or functional heads (31%) and other ment is gaining such a foothold in the management managers (29%) leading the drive. In the intervening and delivery of projects. Firstly, all projects, whether 4 years, organisations appear to have “internalised” large or small, high-tech or heavy industry, have a the project and change management skills required, beginning, a middle and an end. running projects from within rather than top-down. Request Executives Online’s Challenge of Change This makes them ideal assignments for an interim report for a deeper discussion of how major corporate manager, who can be brought in to see the project transformation projects are resourced. through to completion but whose services can then easily and painlessly be concluded.
  15. 15. 13 INTERIM MANAGERS AS AGENTS OF CHANGE Interim managers as agents of change Organisations which need to transform themselves in We further asked our interim managers how well they some way are logical candidates for the temporary thought UK companies managed change. Fully two- addition of additional senior management talent. thirds of respondents felt that UK organisations cope Whether the challenge at hand is the integration of with change “very poorly” or “quite poorly”, with a an acquisition, a plant closure or relocation, a cultural further 28% feeling they are just “average” at it. Only transformation to produce a more service-oriented 5% believe UK companies and organisations manage ethos, de-layering and streamlining of the change “quite well”, and, tellingly, none believed organisational structure, or the reorganisation of roles change is managed “very well”: to align with a new business process or IT system, an experienced change management professional can TABLE 13 Source: Interim and change managers surveyed often be of great help. (May 2006) Indeed, we find that a huge proportion of interim How well is Number of % of change managed? respondents respondents assignments conducted via Executives Online and its candidates have some element of change management Very Poorly 40 24% about them. More than 3,000 of Executives Online’s Quite poorly 71 43% registered candidates are independent change Average 47 28% managers. When we asked our candidates what Quite Well 9 5% proportion of their work as interim managers has Very Well 0 0% been part of a larger corporate change program, the average answer was a resounding majority at 64%. The whole set of results are in table 12. The clients’ view is slightly more rosy, but still only 10% feel change is managed “quite well”: TABLE 12 Source: Interim and change managers surveyed (May 2006) TABLE 14 Base: 200 customers and prospects (July 2006) % of work as part of No of respondents change programme How well do UK companies % of respondents 10% 4 manage change? 15% 2 Average 51% 20% 8 Quite well 10% 25% 8 Poorly* 39% 30% 3 * breaks down as 35% quite poorly, 3% very poorly and 1% poorly 40% 5 50% 28 60% 8 70% 6 75% 10 80% 13 85% 4 90% 8 95% 1 100% 43 64% Average
  16. 16. INTERIM MANAGERS AS AGENTS OF CHANGE 14 The perceived poor track record of UK companies at Internal resourcing tops the chart, with more than half managing change is somewhat frightening, given the of respondents using internal ch a n ge teams, and finding large amount of change businesses intend to them effective. But there is a minority who use external accomplish: resources, although there are significant variations in how effective clients rated them. The disparity between usage and satisfaction when it comes to consultancies TABLE 15 Base: 200 customers and prospects (July 2006) (whether boutique or global) and interim or contract Change initiatives planned in the next 12 months % workers is striking. Consultancies (boutique and global) were mentioned by 20% of respondents, even more Business restructure 19 than those mentioning dedicated internal teams, but Introduce a major business improvement initiative 18 very few rated them the most effective way to deliver Major cost reduction 14 change. By contrast, although they only comprise only Introduce new technology 13 9% of the mentions, independent change managers Merger or acquisition 13 engaged to lead and support a company through change are rated the most effective resource by fully Downsize workforce 12 22% of respondents. Move into a major new market 6 Relocate any operations overseas 4 We conclude from this that although the concept of Divestment 1 independent change managers is not well-understood by the market – there being low awareness and adoption of them – they deliver excellent value and Given that a majority of respondents in all our ch a n ge results for the few organisations who employ them. management research felt that UK businesses in fact Given contract workers fared more poorly in clients’ manage change rather poorly, yet lots of change will ratings, it appears the independent change managers’ be required, it’s surely a priority to develop ways of effectiveness is a result of their focused expertise and doing it better. We asked our interim managers and ability, rather than simply due to their “separateness” clients about their participation in corporate change from the organisation. It appears there is a substantial programs, and how corporate change programs are o p p o rtunity for UK businesses and organisations wh i ch most successfully resourced: need to successfully transform themselves to enhance their success by engaging independent change managers. TABLE 16 Base: 200 customers and prospects (July 2006) What management structures and resources has your company employed to deliver a change programme? % used % who rank it most effective Internal team: change programme added to usual responsibilities 36 27 Internal team: members 100% applied to the change programme 18 35 Contract workers brought in to deliver aspects of change programme 15 2 External boutique or niche change management consultancy 12 5 Independent change managers engaged to lead and support company through change 9 22 External global consultancy e.g. McKinsey, Accenture etc 8 3
  17. 17. 15 WOMEN AND INTERIM MANAGEMENT Women and Interim Management In our September 2007 online candidate survey, 46 Survey respondents were in agreement about the fact women and 279 men responded and indicated their that women inherently possess many of the skills gender when asked. The fact that there are so many that make excellent interim managers. When we more men than women came as no surprise. Among asked respondents to give reasons why women in Executives Online’s talent bank at large, we have long particular would make good interims, 13% of their observed that interim management is quite a male- answers named being good communicators, 15% said dominated profession. There are certainly women women are sensitive to the nuances of different interims, and like their male peers they achieve great corporate cultures, 14% said because they are good things for our clients, but they are rather small in relationship builders and 12% because of being good number compared to the men. networkers. Additional reasons cited included flexibility, multi-tasking and adaptability in adversity. Are there enough female interims? Last year, we asked our candidates, two-thirds of whom thought not. If the potential for their success is evident, why do so few women choose interim management as a career Could or should there be more women interims? option? Surely the reason it’s attractive to so many talented executives apply to women too: the freedom from corporate politics, the opportunity to deliver CHART 5 Source: Interim and change managers surveyed (May 2006) results fast, the variety in task and environment, the attractive day rates and favourable tax treatment of limited-company earnings, and the flexibility it Are there enough affords to balance a professional career with other 33.5% female interims? interests and obligations.  yes 66.5%  no Taken as a whole, the respondents’ answers indicate they believe that few women choose interim manage- ment for reasons having more to do with personal TABLE 17 Source: Interim and change managers surveyed (May 2006) Reasons Women Good Interims Number of mentions Percent Determined 28 6 Good communicators 64 13 Good networkers 61 12 Good relationship builders 70 14 Other 13 3 Persuasive 31 6 Quickly fit in 43 9 Resourceful 42 9 Ruthless 9 2 Sensitive to the nuances of different corporate cultures' 74 15 Very organised 52 11 Total Mentions 487
  18. 18. WOMEN AND INTERIM MANAGEMENT 16 choice and priorities – not liking the uncertainty, preferring not to compromise on “quality of life”, simply preferring being part of an organisation – and “ Perhaps interim management by the traditional structure of many women’s and offers women a way to break men’s careers and family roles. Comparatively fewer through the glass ceiling, which respondents thought that women weren’t choosing interim because of personal attributes or behaviours still has women under- which would make them unsuccessful as interims – reasons like not being good networkers, or not being represented in UK Boards ” competitive or tough were only mentioned by a tiny handful of respondents. The lifestyle benefits to an interim career should not be underestimated. Interim management can offer a certain level of flexibility to people seeking to balance professional and personal lives, although that flexibility comes at a price. An interim career typically shows a work pattern ch a racterised by periods of full-on, highly paid work interspersed with downtime. (Witness the fact that 33% of the candidates we surveyed were not in assignment at the time of our survey.) Deliver one significant interim assignment in a year, and an interim perhaps need not do another the rest of the year, leaving full months at a stretch for personal endeavours and responsibilities. TABLE 18 Source: Interim and change managers surveyed (May 2006) Reasons Women Don’t Become Interims Number of Mentions Percent Don't get the executive experience necessary to launch an interim career 18 7 Don't like the uncertainty of an interim career 44 17 Don't value themselves highly enough 15 6 Lack of awareness of it as an option 46 18 Lack of confidence 25 10 Lack the flexibility in their domestic lives 35 14 Not competitive enough 2 1 Not good networkers 3 1 Not so prepared to compromise on quality of life 23 9 Not tough enough 3 1 Other 13 5 Prefers being a permanent part of an organisation 26 10 Total mentions 253
  19. 19. 17 WOMEN AND INTERIM MANAGEMENT Paradoxically, part-time work is also a possibility. Classically, interim management is difficult to do on a part-time basis, as the reasons companies bring in interims are often so urgent that full-time attention is required (and then some!). Still, 27% of interims surveyed are working in part-time assignments. Assuming Executives Online’s registered interim candidates are a representative sample of the profession, it appears that although there are fewer women than men, there are nonetheless a slightly higher proportion of women than there are in permanent executive roles. Nearly 14% of our res- pondents were female, yet the Female FTSE Report 2005 shows that in 2005 women held only 10.5% of directorships in FTSE100 companies, whilst the Profess- ional Women’s Network detailed that women occupied just 11.4% of boardroom roles in the UK in 2005. Perhaps interim management offers women a way to break through the glass ceiling, which still has women under-represented in UK boards.
  20. 20. INTERIMS IN PERMANENT RECRUITMENT 18 Interims in Permanent Recruitment From time to time, we at Executives Online ask our to the internal team. What’s more, an interim can be interim management candidates whether, if a very hired into a permanent role far more quickly than suitable permanent job came along, they could be headhunting an executive for the same role, often in interested. The answers were always quite similar. weeks or even days versus the months that executive About one-third of practicing interim managers said search can take. (See Executives Online’s Executive they would return to permanent employment for the Talent re p o rt for a thorough discussion of these issues.) right job, and the remaining two-thirds staunchly said they were entirely committed to interim and would Executives Online has been accomplishing an increasing never go back to a permanent role. The actual ratio number of permanent placements from our talent would vary slightly from year to year, seemingly bank of interim executives. Although we’re still correlating to the economic environment, with more primarily an interim business, permanent executive interims open to a permanent role when the economy recruitment is now a faster-growing part of our was difficult. business than interim and may soon rival it in scale. In September 2007 we asked this question again, and It seems that not only are interim managers great in the answers were resoundingly different. The ratios in interim situations, but that a growing number of fact were nearly reversed, with 57% of our practicing companies and organisations are turning to this rich interim managers saying that if a suitable permanent resource of talent when what they really need is job came along, they could be interested, and the rest speed and effectiveness in hiring: to find someone claiming to be 100% committed to interim, never with extremely relevant experience, who can be hired returning to employment. in weeks rather than months, and who begins making a big difference to the organisation right away. With the UK economy chugging along more-or-less positively, what has motivated this about-face? We CHART 6 chalk it up to the notion, explored elsewhere in this report, that the world is no longer so black and white 2004 Base: 127 interim managers (January 2004) when it comes to executive resourcing. There may no  Open to the right longer be such clear distinctions between so-called permanent role “career interim managers” and “ideal corporate 33%  Strongly intends to remain interim employees” as there were in the past – there are 67% merely great people, with outstanding track records wh i ch can be leveraged in all sorts of dynamic contexts, whom organisations are engaging to deliver great results. With slowness of permanent recruitment 2007 Base: 327 interim managers (September 2007) ranking the #1 reason companies engage an interim manager, surely permanent recruitment and interim  Open to the right management are closely related. permanent role 43%  Strongly intends to 57% remain interim Indeed, the very same characteristics that make interims so valuable are useful in permanent employees too: objectivity, the focus on delivery of results, being over-qualified for the task at hand, and skill transfer
  21. 21. 19 CONCLUSION Conclusion In this report we have sought to uncover the latest trends in the fast-growing interim management business. At Executives Online we know that business “ Those who have already well – which means of course that this independent experienced the benefits of research has not yielded major surprises for us. Rather, interim management will need it has served to confirm us in our conviction that the little persuading when the time potential for further growth in this sector is considerable. next comes to engage high- quality but short-term professional support Driving this growth has been the need for companies to respond rapidly and flexibly to the increasing pace ” of change without adding to their long-term overheads – something interim management is ideally placed to do. Contributing too has been the downward pressure most companies have been trying to exert on their Those who have already experienced the benefits of permanent staff numbers, coupled with rising pro- interim management will need little persuading when fessional standards within the interim management the time next comes to engage high-quality but sector itself and a better understanding in industry of short-term professional support. For those who have the benefits the sector can offer. not yet tried using this modern management tool, we at Executives Online would be delighted to tell you The most recent survey data in this report tell a new more about how it might help solve your particular story about flexibility - not just the general flexibility problems. that interim managers have always provided their clients, in keeping headcount down and getting skills Likewise, if you are an interim manager on assignment in quickly, but also an increasing flexibility in the and your client needs additional resources, call us to ways interims are being deployed. The data say that discuss the benefits of recommending Executives interim managers are now engaged in more part-time Online. assignments, often work for more than one client at a time, and can be willing and suitable candidates for permanent executive roles. We predict a paradigm shift from the traditional view of interim management, with its full-time contracts having fixed start and end dates, to a model in which talented executives with specific experience and track records are engaged quickly to deliver a result, via whatever structures their clients prefer. We call this Fast-Track Executive Resourcing.
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