The stock slump means interim executives could become a fixture in the C-suite
These are convulsive times for business. Labor and supply shortages mean work isn’t getting done. The Great Resignation has left companies light on senior talent. And as market gyrations fan worries about the economy, everyone is afraid of making the wrong C-suite hire, especially at fast-growth firms.
In response, companies are increasingly turning to interim executives. Be they CEOs, chief technology officers, or heads of marketing, experienced leaders are being tapped to tackle projects that can’t wait for better times or permanent hires. A temporary CEO might handle an acquisition. A CTO may oversee a major systems implementation. A CMO could put together a new marketing strategy. Think of it as an injection of top-flight talent. Interim executives address your most pressing needs and then step away once the project is up and running. Even better: With no long-term commitment, there’s less long-term risk.
Growth can’t wait
Consider an unpopular tech upgrade that’s been needed for some time. Anyone who takes it on knows that the expense and ruffling of organizational feathers can make it precarious for their career. Yet if you merely appoint someone, they might not have the skills to do it. Top permanent talent may be out of your price range: The average CTO salary can cost a business a minimum of $250,000 annually.
Yet over the course of a few months, an interim CTO can build a strategic tech plan and determine which systems to employ. Once the heavy lifting is done, the person can move on, and you can hire a more affordable manager to run the day-to-day operation.
Surprisingly, finding such talent isn’t as hard as it would seem, thanks to the Great Resignation. While there’s no hard data on the number of available interim C-suite executives or how many companies are hiring them now, I’m seeing a surge in demand for these roles and the people who will fill them.
For quality-of-life reasons, many executives with 20 to 30 years of success prefer to work just six months a year. Recent retirees still want to contribute. Executives who are in between opportunities are willing to take a temporary contract to prove themselves. Search firms have already vetted candidates and just need to determine if they’re the right fit for your organization.
Experienced interim executives are used to being on the spot and meeting deadlines. They’re unencumbered by office politics and focus solely on getting the job done. They can keep the business running during maternity leaves, or they can tackle specific tasks that a small company isn’t yet equipped to handle.
Young companies that can’t afford a CFO can hire an interim person to oversee fundraising, a proper set of books, and the financial modeling investors require. When the work is done, this person gives way to a VP of finance more appropriate for the company’s size. Other firms may want to launch in a different part of the world. An interim can chart the way in an unfamiliar market until they’re up to speed.
If a new vertical has been debated for the past year, an interim hire can be given three months to prove it will work. That individual can also be used to handle unpleasantries, such as shedding an underperforming division.
A temporary hire indicates to investors that senior leadership has creative hiring solutions and that it’s financially shrewd since the position doesn’t add to the headcount. It also assures investors that young leaders are willing to learn from more experienced coaches.
Sometimes the part-time solution can even become a permanent fix: I know of a large insurer that let its CEO go on short notice. Regulators demanded a replacement within weeks. A former insurance executive jumped in. He ended up staying for five years.
Despite the obvious benefits, many companies balk at the thought of hiring an interim executive. At first glance, it appears expensive: Premium talent comes with premium prices, and hiring a contractor generally costs about one-third more than in-house talent. Yet these expenses are short-term—and often cheaper than lost opportunity costs or a permanent hire who doesn’t deliver.
This isn’t to say it’s a cure-all. Interim executives usually can’t help a company that’s run through three CEOs in the last five years. Such firms are better suited for a traditional search process, where the board and senior management figure out what’s going wrong, then decide what they need. But for most other companies, an interim C-suite hire can address a variety of needs, especially now.
Inflation, supply troubles, and the talent shortage aren’t going away anytime soon. Reducing risk across the organization should be top of mind for every board and current executive. Attacking important initiatives with smart, driven, temporary, and often overqualified hires will cut expenses, get projects completed, reduce interpersonal friction, and ease investors’ minds.
David Kinley is CEO of Bluenose & Company.