Interim Management in practice

1. Introduction

Interim management is one of the management tools that an increasing number of Danish companies are making use of. As this management tool is becoming more widely utilized, many questions regarding its use have naturally arisen in companies. This article sets out a practical and use-oriented approach to interim management with a point of departure in the typical considerations and questions that a business leader – board director/-member, CEO, manager – typically will have when deciding whether a temporary need for management should be filled by employing an interim manager.

We deal with three main themes: 

This site treats interim management in practice. Therefore we have chosen a structure whereby an overview of interim management is combined both with actual cases and with answers to the most frequent questions business leaders pose on the subject.

2. A Flexible Management Resource in a Flexible Business

The only constant is change! This fact places concrete demands on business’ management and employees: the demand for up-to-the-minute knowledge of the surrounding business environment; for continuous development of businesses; for the ability of rapid change-over and flexibility. This applies in all areas but not least in the human resources – in the broadest sense.

Forward-looking business leaders make sure that their HR strategies promote both the building up of competence and of flexibility. In the area of recruiting, this means that one builds up a staff of core employees that are deployed on successive assignments according to need, along with a broad array of internal and external HR resources, which can be brought in on short notice for shorter or longer periods.

In this context, interim management plays a growing role in both private and public companies. The concept has been known outside Denmark for many years and, as a result of the rise of globalization and the increased need to quickly and uncomplicatedly be able to attract precisely the management competencies a business requires, it is making inroads in Denmark as well. Here a steadily growing number of business leaders have begun to consider the advantages of contracting freelance managers to perform clearly defined and time-limited assignments in their efforts to sharpen the focus within the core business while simultaneously reducing recurring internal expenses.

3. Interim Management is also an Issue for the Board of Directors

To the degree that HRM has assumed a larger place on the agenda of executive committees, interim management has become an issue relevant to board members. This holds especially true when a business must temporarily fill a management post while searching for a permanent general manager. But this also applies for other key posts having the executive committee’s attention.

One of the board chairmen having experience with interim management is Ib Paaskesen. After a career spanning many years of first developing, then selling a family business, followed by a half dozen years owning two McDonalds restaurants, the 55 year old decided to devote the remainder of his active professional life as a professional board member. Today, he is chairman or board member with 16 Scandinavian companies, having among others the post of Chairman in Nordic Medical Supply Holding A/S and its associated firms.

In 2007, NMS was in the process of searching for a new director of finance. The process dragged out, as is often the case. But Ib Paaskesen and NMS’s group director wanted enough time to find the right candidate and give him the opportunity to wind up his existing assignments in a proper way. At the same time, they had to take into account that the carrying out of financial duties functioned normally. Therefore it was decided to hire an interim manager for 4 months, of which the last would be devoted to bring the new finance director up to speed in the assignments. Ib Paaskesen says: “It is the executive board’s responsibility to ensure that the business at all times has competent management and that management duties get completed. Whether this exclusively happens with permanently employed managers or periodically also with interim managers is not the decisive issue. All solutions have advantages and disadvantages – the decisive is that the solutions are found and that they work.”

4. An Interim Manager Carries Out Important Assignments

4.1. Problem-solver and Mentor

Unsatisfactory financial results, a large arbitration case, outsourcing part of production to the Baltics, along with the relocation and integration of another company – these were the formidable challenges that the management of family business Senrusta ApS in Køge struggled with in 2005. Faced with these great challenges, Senrusta’s management admitted there was a need for rapid and qualified help.

Senrusta has, during more than 50 years, produced hardware and other equipment for doors and bathrooms. Their products lay, in terms of both design and quality, at the high end of the scale and their price reflects this. Senrusta has a half-hundred employed as well as a number of sub-suppliers of which several had formerly been employed by the company. Many customers had done business with Senrusta for years, but the business finds itself in a very competitive market, in which cheaper producers, both domestic and foreign, constantly seek to corner the market.

In that situation, it was decided at Senrusta to contact Nextt Management firm and, after a comprehensive conversation with a specialist, it was decided to employ an interim manager that, during the course of one year, would serve as Jørgen Henriksen’s partner in Senrusta’s daily management. One week later, the interim management specialist presented the owner with three candidates, and the choice fell to Laurits Zangenberg. “We had no doubt at all. Although the other two were also fully qualified, Laurits’ personality made the choice easy,” says Director Jørgen Henriksen, “he exuded energy, pragmatism, stated things in a simple and direct way and already seemed enthusiastic about the assignment. The chemistry was fine from the start.”

Jørgen Henriksen had beforehand given much thought to the coming collaboration with an interim co-director and was prepared to step somewhat to one side in order to make room for his new colleague. He says, “Laurits made the pairing easy for me. He quickly established an overview of the situation and thereafter got down to tackling the tasks together with me. The collaboration went even better than I had expected. Laurits involved me in everything he did and after one year we had brought Senrusta safely through both fusion, outsourcing, arbitration, and the financials were on the right track. And in the bargain I got an engaged and helpful professional and personal mentor that I still meet with in my personal life.” When posed with the question whether Jørgen Henriksen, if the need arose again, would hire an interim manager, he answers, “absolutely – without hesitation”.

In 2007 the owners accepted an offer from the Carl F concern, a loyal customer of many years, to buy the business. Jørgen Henriksen continues as director in Senrusta ApS.

4.2. When Do Businesses Use Interim Management?

The above case illustrates two of the assignments that interim managers resolve: Assignments where the manager is hired to ‘put out fires’ in the business while, at the same time, contribute certain competencies in partnership with the daily management. Other examples are: 

The examples are many, but the common denominator is that there has been a need for a qualified and engaged temporary manager in a hurry – a manager that adroitly can enter into a team, that takes responsibility to accomplish the concrete assignment, while simultaneously being aware from day one that the assignment also entails finding a more permanent solution. A board chairman in a fusioned furniture concern put it this way: “One of the advantages with interim management is that the provider, in a very short time, can make people available that burn for here-and-now assignments, and that don’t necessarily want a long-term job”.

In smaller businesses, it can be a great advantage to draw upon professional and leadership expertise in periods where a temporary need has arisen. A small company perhaps doesn’t have the finances to employ an IT manager permanently, a finance manager, or a personnel manager, etc., but nevertheless wants to have these assignments carried out with a high level of professionalism. If the company hires a traditional consultant, it rarely has the opportunity to have the person integrated into the organisation, just as the consultant normally will not assume management responsibility. Some companies, therefore, choose instead an interim manager that fits the actual needs while, at the same time, being accustomed to ‘raising his antennae’ to sense the culture in the successive organisations that he or she works in.

Some businesses also make use of an interim manager to help resolve serious conflicts. This might be the abolishment of jobs, difficult dismissal cases, protracted personnel conflicts or the merging of two competing companies. In these cases it can be helpful that a person comes in from outside the company and sees the problems with fresh eyes. And, because the interim manager is not a part of the organisations power structure and will depart the company again, he or she can contribute positively to making and executing the unpleasant decisions.

4.3. Overqualified Assistance Paid Dividends

In the spring of 2007, Vice President Jan Nørgaard from Vestas Control Systems took what was, for him, an unusual decision – namely to hire an interim manager. At that time, Jan Nørgaard was the factory manager for the production unit that produces control panels with a staff of 150 employees. At the same time there was a huge pressure to deliver on the current orders, the factory was undergoing a drastic change in that it was to be transformed from a operations factory to a development factory. This placed great demands on everyone concerned, not least on the production-technical department (PTD) that has responsibility for the all-important technical support.

As the situation progressed and deadlines bore down, Jan Nørgaard acknowledged that the task exceeded the PTD’s knowhow and management resources and that a speedy solution was required to prevent the project from failing. “There wasn’t time to search for and permanently hire a highly qualified PTD manager since they definitely don’t grow on trees,” says Jan Nørgaard. Thus he got the idea to try out using an interim manager, but neither he nor the people in his network knew very much about interim management. “I discussed the matter with our HR director, who put me in touch with Nextt Management. Shortly thereafter I was able to hire Svend Erik Christensen, who started the job as interim PTD manager on the 1st of May, 2007 og had the job for a half year until I found a permanent replacement. Afterwards he helped an additional few months with various other projects.”

Jan Nørgaard had made careful considerations before employing an interim manager. He emphasizes the following: “I thought a lot about the employees that, during the course of a half year, would be working under two bosses, first the interim manager and thereafter the continuing boss. I next thought about the demands there would be for good empathic skills and ongoing communication from the two bosses as well as from me.” He continues, “I also had the hope that our interim manager could do something more than just the specific job. He should be capable of and want to enter into our management team with fresh eyes and new inspiration. Vestas is, as you know, undergoing a huge development in every area.”

After the interim period, Jan Nørgaard could be content that the ‘experiment’ went well. He summarizes: “Svend Erik brought with him a huge ballast, both when it comes to management experience and professional competencies. He contributed a breath of fresh air with his modern, industrial way of thinking, which fit our needs very well. Svend Erik quickly established an overview and a good connection to the employees in our PTD department, which he further strengthened via several hirings that we still benefit from.”

On the basis of that positive experience, several months after Svend Erik Christensen started in Vestas, Jan Nørgaard decided to hire another interim manager, this time as team leader in production.

5. The Interim Competence-base

5.1. The Travelling General Manager

“I colour red numbers black,” says Laurits Zangenberg whenever he has to briefly describe what he does as an interim director. Up till now, this is what he has done 14 times in the last 18 years, summoned by owners, executive boards, or banks with money at risk in businesses that are doing poorly. The 60 year old interim manager sits forward on the edge of his chair as he tells about his career as an interim manager specializing in restoring problem-stricken businesses.

Having an education as an engineer and a Bachelor of Commerce in accounting and finance, Laurits Zangenberg has been employed in a number of Danish businesses, among others Danfoss and a business in South Africa. His first jobs dealt with sales and technical support; later he was given responsibility as director for the daily running of several small and medium-sized firms. However, 20 years ago he decided to only do that which he was the very best at and which he enjoyed the most, namely helping businesses in need as an interim director. He presents the example of a business situated 100 km north of Oslo. After a quick analysis, the core of the business’ problems revealed itself to originate from poor control over production. “What on the surface appeared ok, showed itself to be lacking a proper foundation,” says Laurits Zangenberg, “they were trying to operate a production business according to wholesaler premises, that is to say with entirely too small production runs and an entirely too short order horizon. That’s why they weren’t getting nearly as much out of the production apparatus as it was capable of delivering, and at the same time the entire organisation was being stressed by the daily changeovers and interruptions.” After three-quarters of a year’s struggle to overcome resistance to changes and a total transformation of production philosophy and tools, the reward came in the form of a doubling of production, remarkably with exactly the same resources.

Asked whether he, in all of his 14 interim jobs, had managed to turn a deficit into a profit, Laurits Zangenberg answers: “Yes, one very important prerequisite for success in my job is the ability to analyse and get an overview of the situation in almost no time. Only when I feel certain that I can carry out a turnaround do I say yes to the job. It’s also important that you know yourself well, your strengths and weaknesses, and to dare to trust your gut instinct, and to be yourself in dealing with the business’ management and employees. If you do, you’ll very quickly win their trust.”

When Laurits Zangenberg looks back on his 14 interim jobs, he emphasizes both the positive and less positive sides, “I am never bored and I enjoy the adrenalin rush I get every time I start a new assignment. To have one short week to analyse the problems and afterwards to immediately have to act… My job is to breath new life and can-do spirit into the organisation so that the people can carry on running the business after my work is done. This is in my awareness from the very first day. There’s a huge satisfaction in being able to make a difference,” he continues, “and, as a new person, I encounter a rare openness and trust from the vast majority. I’m perceived as someone who is there to help and to whom you afterwards will say goodbye and thanks. I am not a threat to anyone in the business.” In 12 of the 14 jobs as interim manager, Laurits Zangenberg has been offered the job of general manager permanently, but he has declined every time, “I would eventually get bored if I stayed too long in one job – better to give 110% for one year and then move on to a new challenge – even though it’s a vagabond existence with many superficial acquaintances and sacrifice with regards to family and permanent friends. I create victories for others. If you want all the pats on the shoulder for yourself, you shouldn’t be an interim manager,” concludes Laurits Zangenberg.

5.2 How is an Interim Competence-base Built Up?

To the degree that demand for interim management resources grows, an increasing number of managers choose a career as an independent interim manager. Some do this on a permanent basis, while still others choose to take on interim work in periods between permanent employment. Interim managers are of course very different from one and other, but common to them all is that they thrive under new challenges and the completion of a concrete assignment in a limited timeframe. They want to make their contribution to getting results while simultaneously developing their own competencies on an ongoing basis. The majority of them choose this career path not out of need but out of desire. It is a proactive choice.

Interim managers receive their assignments in several ways: from businesses they themselves have contacted, via the business’ bank, lawyer or accountant, and to an increasing degree by means of specialised interim management firms that are both a knowledge centre and provider of interim management to both private and public clients. Interim candidates are admitted to interim networks after a thorough procedure.

Figure 2. Candidate Procedure - click for enlargement
Source: original design

Via a process of pre-qualifying, the interim specialist ensures that the candidates meet certain salient conditions to be able to occupy an interim job successfully:

To put it in brief and somewhat popular terms, successful interim managers are often positively overqualified for the job.

5.3. Marketing Expert in Media and Television

When the supplier for content and entertainment to fibernet provider Smile Content A/S in Århus, right in the middle of a hectic build-up phase, found itself without a marketing manager that could begin and do so effectively on short notice, the administrating director chose an interim solution.

Smile Content delivers entertainment and broadband service in the form of TV, and entertainment packs, internet and telephone service to private Danish customers connected to fibernet. The business is the result of a fusion in 2007 between two content firms owned by the energy companies MidtVest and EnergiMidt. The group of owners has since grown to include additional fibernet firms.

Smile Content produces services that are both sold wholesale to several of the energy companies that establish and own the fibernet, and directly to the end-consumers in other energy companies’ grids.

Smile Content has ambitions of building up a position as a very significant player on the Danish market. The potential is big – theoretically all the connected energy companies’ customers – but the competition from the established providers of TV programming, internet connection and telephone service is correspondingly intense.

This was the situation Michael Kjær found himself in the middle of when he, the 1st April 2008, started the job as interim marketing manager in Smile Content A/S. Heading up a handful of employees, he was to develop a strategy plan for the business’ sales and marketing efforts and a corresponding organisation-plan for the marketing department alongside the normal operational work to realize the sales goals for 2008. Inherent in the assignment was handing the department over in good condition to a newly hired marketing manager at the end of the year.

39 year old Michael Kjær was well-equipped for the task. After 15 years’ employment as a manager for, among others, TDC and Søndagsavisen, where he had worked with sales, marketing and change-over management, he had decided the year before to become an independent business consultant and interim manager. He had also founded his own company that delivers internet-related services. His first interim-assignment as the director of a little, newly started mobile application firma was just completed when Nextt Management approached him about the assignment with Smile Content.

“I was immediately excited about the assignment. It was a very appropriate continuation of what I have done earlier and therefore there was also a good possibility that, in a short time, I could make a difference – that’s important to me,” says Michael Kjær, “I have definitely not regretted that I accepted the job. The work days are long and often hectic, but there is a good chemistry between me and the other managers and employees, and I feel completely at home on the team.”

To the question of what he most enjoys about the interim job, Michael Kjær answers: “I become really motivated by the challenge inherent in completing a specific task with clearly defined success criteria in a limited time. It’s also great to be able to pick and choose among interim assignments depending on what I think I’m best at. Overall, I get better insight into myself, both professionally and personally. But the job also comes with a few costs,” he continues, “you don’t spare yourself or your family. And, even though from the beginning of my current job I had prepared myself mentally that I was working on borrowed time, it is a bit sad to say goodbye to good colleagues and the many ships I helped launch to sea. When the clock strikes 12 New Year’s Eve, I won’t be part of Smile Content any longer. I shall have to get used to that.”

6. Rapid Access to Interim Management

Private and public businesses have for years used interim management resources to complete specific assignments for shorter or longer periods. They have located these managers through personal connections, their accountant, lawyer or bank, etc. But, in the last few years interim management has become a professional business-service in Denmark, whereby Nextt Management, in a short time, help businesses to choose and employ interim managers from among a number of qualified candidates.

Interim management provision has become a business endeavour because the concept unites rapidity, flexibility, and many varied management resources.

The typical course of an interim assignment appears in figure 3.

Figure 3. New Manager in 10 Days - click for enlargement
Source: original design

When Nextt Management receives an assignment from a client, it screens the interim experts among all the candidates in their candidate network. Those immediately appearing qualified are sent a mail with a short description of the assignment and a prompting to put their name into consideration if they have time and desire to take on the assignment. Some decline because they are otherwise engaged, others for reasons pertaining to geography, the nature of the assignment or company, or the salary-level. After three to seven days, the interim specialist often has a selection of 10-20 candidates. Against this background, a number are chosen for interviews and a look at their references and the 2 to 3 most qualified are then introduced to the client. If the client chooses one of the recommended candidates, an agreement is entered into between the client, Nextt Management and the interim manager. The agreement is entered into for a fixed time period, but may also contain an option for extension to an additional period in order to give the client flexibility should he need it.

After the completion of an assignment, an interim manager can immediately submit himself for consideration for new assignments, but the majority choose to take a little break before they are ready again.

Nextt Management acts both as a advising consultant and the provider between a business and an interim manager. Credibility and reliability are therefore absolutely necessary requirements for professional interim experts.

Nextt Management and recruiting firms supplement each other on the job market and seldom compete directly. Partner Ivan Henriques from the headhunter firm Human Capital Group has many years’ experience in recruiting managers for permanent positions. He says: “The majority of our clients are larger businesses that are aware it can take a long time before a new manager is in place. But there are occasionally situations where one considers an interim solution. In fact, just last week I had a conversation with a business owner who feared that both managers would leave at the same time. In such a case it would be obvious to put in an interim manager.”

7. Worth Remembering

In the preceding sections, we’ve covered three main aspects of interim management: namely, the needs, sourcing and provision aspects – all seen from a business leader’s perspective.

To conclude, we will summarize and supplement by addressing the most frequently posed questions concerning interim management and giving our responses.

This is what business leaders are asking us:

Who uses interim managers?
Both public and private businesses – large and small – but often with international connections by which they have become acquainted with the interim management concept.

When is interim management used?
For example, in situations of acute void of management, strategic leadership, project leadership, the need for rapid improvement of returns, changeover leadership and turnaround, or the realization of unexploited business potential.

At which level is interim management used?
At all levels of management – from general managers to operations managers to middle- and project managers.

Is an interim solution more expensive than a permanent hiring?
The honorarium for an interim manager covers all expenses including payment to Nextt Management, aside from agreed-upon travel expenses and the like incurred during the carrying-out of the job. Compared to the total gross expenses for a permanently employed manager, the honorarium for an interim manager will typically be around 25% higher. There are, however, no expenses for recruiting and possible outplacement.

What is the difference between a business consultant and an interim manager?
Whereas a consultant is most often analysing, writing reports and advising, an interim manager is predominantly problem-solving and carrying out solutions.

Is an interim manager threatening for my organization?
The manager is only, as a point of departure, hired for a specific assignment for a limited period of time and not as a recruitment ‘via the backdoor’ (try-and-hire). Moreover, he or she is neither emotionally involved nor a part of the business’ political environment.

What if, after the contract has expired, both the interim manager and I desire a permanent hiring?
In this case, the interim manager is released upon the payment of a nominal sum.

Can I extend an interim contract?
Yes – in some cases it is agreed from the beginning to have the option of several months’ extension, which the business/client freely can activate one month before the expiration of the contract. If an option-agreement hasn’t been made, but the interim manager both can and will continue a few months, then the interim management firm is normally also positive with regards to a supplementary contract.

Does the start-up of an interim manager take a long time and many resources?
No – professional interim managers are flexible and have experience from various different assignment and business types. They are moreover selected on the basis of their qualifications for the concrete assignment.

Has the interim manager ended up in an ‘interim-existence’ for lack of better alternatives?
No – the vast majority have made a proactive choice to have an independent interim career – for some interspersed with permanent employments – because they thrive by themselves having a say in accepting or declining the challenges and the personal/professional development the job affords them.

Does Nextt Management follow up on the employment?
Yes – the interim specialist is in regular contact with both the client and the interim manager to ensure that the assignment is being completed satisfactorily and intervenes if the need arises.

What happens if the interim manager, despite all expectations, doesn’t live up to expectations?
The interim specialist will, on the basis of discussions with the client, develop a specification of requirements in the form of a job and person profile the client approves. The client is moreover him/her self active in the selection of the candidate. It is therefore very seldom that a time-limited interim hiring is interrupted prematurely by the client. If this should nevertheless occur for objective reasons, Nextt Management obligates itself to find a new, qualified candidate as quickly as possible, without extra expenses incurred by the client.