Change Agents not Agency Workers

How is the perception of interim managers changing, and why?

How many of you remember being joined at the palm to your Blackberry? In 2010 Blackberry Limited (formerly known as Research in Motion) was being touted as a technology leader, and it held 43% of the US smartphone market. But by 2013 the company had just laid off 4,500 staff and acquisition rumors swirled.

Enter John S. Chen, who joined on an interim basis in November 2013. When the appointment was first announced, shareholders were up in arms. Yet, over time, Chen changed Blackberry’s core business from products to services, and demonstrated the agility needed to post a 35% surge in share price during 2014, and stabilize that growth in 2015.

With the speed at which Blackberry Limited was falling prior to the appointment of Chen, would they have had time for what would have undoubtedly been a challenging CEO search? Chen’s appointment is one of many interim success stories and demonstrates how, in some countries, executive-level interim managers are now being considered as change agents, rather than agency workers.

“Leaving a legacy”

The UK is broadly considered to be one of the world’s leading markets for interim management, due to a shift away from the notion that it is a gap-filling service that can be used to cover HR-related issues such as maternity and sickness leave. Grant Speed, Managing Director of Odgers Interim UK, explains: “Where interims are used now – and where the narrative has changed over the past few years – is for transformation, change management and project management work. A small percentage of interims may still be used to steady the ship while you look for a permanent hire, but what we focus on now is leaving a legacy. The interim manager is passing on their skills to the organization to leave an upskilled staff.”

A small percentage of interims may still be used to steady the ship while you look for a permanent hire, but what we focus on now is leaving a legacy.

But what has driven the increase demand and shift in perception? A recent report from the UK-based Interim Management Association (IMA) shows that interest peaked significantly in 2008 and 2009, and has since stabilized. “You see an increase in flexible staffing’s popularity after every recession,” Speed explains. “Organizations understand it more during downturns because they lack the appetite for a permanent hire.” During the Financial Crisis, the UK’s interim managers demonstrated to their clients that they could be used in a more strategic way – to manage change assignments, to manage mergers and acquisitions, and to assess the effectiveness of specific teams.

One of the reasons for interim managers demonstrating that they can manage change is because of a change in the where they are coming from, as Simon Gough, Managing Partner of Boyden’s Interim Management Practice in London, explains. “We find that a lot of management consultants are now interested in pursuing interim assignments. They have been used to advising on strategy for their career, and now want to be involved in the implementation of that strategy.”

Graham Willis, Managing Partner at Watermark Search, offers both executive search and interim management services to his clients in Australia. In Australia, a relatively immature market for interim services, Willis explains that half of the challenge is around educating clients about how best to use interim managers. “Once clients see the quality of the interims, they are repeat buyers,” he says. “They understand the value and are attuned to the benefits more.”

Dale Reeson is an experienced interim HR executive, who has also hired many interim managers and retained executive search firms. “When you say interim managers, people think you’re talking about Baby Boomers who don’t know when to quit,” she says. “But we’re seeing more people who are stepping out after doing magnificent work in organizations and saying that the thrill is gone for them. They no longer want to do maintenance - they want to fix things and then move on.”

What is driving interim demand?

So if the Financial Crisis proved to be a catalyst for interim managers to prove their strategic value in the UK, what are the trends that could drive increased demand elsewhere in the world?

Perhaps the biggest driver of the interim business in the coming years will be the demographic shifts in the workforce. Much has been written about the potential for significant talent shortages as Generation X succeeds the Baby Boomers into boardrooms and executive ranks. Jason Peetsma, Managing Director at Odgers Berndtson Canada, says: “There is a demographic tsunami about to hit. The mother of invention is necessity. In interim managers, we have people who have experience of growing and managing businesses – they have been there and done it – and they are available for a short time to come in, effect change, upskill the staff around them, and then leave.”

While an executive skills shortage could create demand for interim managers, Willis explains that a similar macro trend is leading to greater interest in interim careers from executives themselves. “Every government in every major economy wants people to work longer because they can’t afford the cost of pensions,” he says. “People’s retirement funds have taken a hit and there is an ageing population without the means that they thought they had. Interim management is a great way to retain their skills, and allow them to stay in the workforce for a few more years, without causing a blockage in the talent pipeline for the next generation.

Relationship with executive search

With interim, we’re solving business problems with the strategic use of human capital. With executive search you are selling a service; with interim management you are selling a product.

So while there is a growing market for interim managers in many countries, does it make sense for executive search firms to provide this service? After all, executive search firms specialize in scanning an industry to find the best available talent for their client, and taking 3-6 months on average to do so.

“I spent many years in executive search before I went over to interim,” says Peetsma. “As a trusted advisor, you have to think in terms of what is in the best interest of the client. With interim, we’re solving business problems with the strategic use of human capital. With executive search you are selling a service; with interim management you are selling a product.”

By offering both services, firms are able to respond to their client quickly with an interim solution during a time of crisis, and then speak more thoughtfully about finding a long-term solution to the problem their client is trying to solve. While there are many countries where there isn’t yet a defined high level executive interim market, either due to employment law configurations, lack of talent, or lack of client demand, this is an area to watch for future diversification opportunities.

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