Friday, 30 March 2012

Interim Management - The Rate Debate

There are constant discussions about daily rates and having recently been involved in one such debate it got me thinking how the landscape of the interim market has changed.  We’re all well aware of the economic climate and the changes in clients’ behaviours – taking longer to make a selection, trying to source directly and an over supply of available interims to choose from but I’m not sure this is where the problem stems from.

Historically cost has always been part of the discussion but never the deciding factor as to who would be engaged.  The climate has certainly caused this to change but surely if an organisation has a business critical problem the best fit person to devise a solution in the shortest possible time is the most appropriate solution for the business?  Engaging a lesser qualified and ill equipped candidate based on price will only delay the result and potentially cost more or amplify the problem at additional cost to the business.

What is driving these behaviours?

The conclusion I have come to is that it’s not the clients but the candidates.   Clients are being led down the garden path because they are considering many ‘possible’ candidates all of whom are coming to the table with a very different view on their charging methodology.  Professional Executive Interim Managers will have a rate they typically achieve.  This will of course be modified depending on the complexity, duration and location of the assignment but should sit within a range set on their capabilities and include a bottom line as long as the challenge is right.  This is how the interim management model works.   However, as there are so many ‘in betweeners’ who are ultimately searching for a permanent position they are under selling themselves, pitching  at knock down rates and taking the view that it could be a way in for a longer term stay.

This is confusing the issue and with increasing levels of risk aversion and nervousness in making decisions the end result can be clients procrastinating and therefore elongating what should be a speedy process.  The selection process currently seems to be treated as a permanent appointment that will be ‘forever’.  Additionally, those clients that do require a permanent employee are now under pressure to appoint immediately which is fuelling the fire.

The whole point of engaging an Interim Manager is speed, flexibility, immediacy, value, results, delivery and the ability to disengage when the agreed objectives have been achieved.  The thinking should always be centered on return on investment because any good Interim Manager will pay for themselves x times over.

On successful conclusion the transformation, change, turnaround, restructuring, business improvement or project has been driven forward and the legacy is left.

By Steven Wynne

Monday, 19 March 2012

Continued growth for Interim Managers

The latest findings from the quarterly Ipsos MORI survey for Q4 2011 show continued growth of the industry, in spite of the recession. Enquiries for all member firms are at a 5 year high and the average length of assignments has also increased, from 108 days in 2006, to 166 days in 2011.

The results reveal that enquiries for interim managers were the highest they have been since 2011. This is a rise of 76 per cent on the same quarter in 2010, and 4 per cent on the third quarter (Q3) in 2011.

Companies within the private sector are increasingly turning to Executive Interim Managers to solve problems and help manage change within their businesses; this sector represents two thirds (66%) of all assignments, the highest percentage for four years.

Thirty per cent of requested assignment functions in this quarter were for Special Projects (up from 26% in Q3 2011) followed by Finance (17%) which saw a two point fall over the same period. C-suite executives represented 7% of the IMA business in the final quarter of 2011. The most common reason for an assignment is Programme/Project Management, with 40% in Q4, up from 36% the previous quarter.

The largest increase was seen for Change or Transition Management, which in Q4 accounted for 19% of the all assignment functions, up from 14% in Q3.

Business Improvement and Gap Management each represented 16% of completed assignments in the final wave of 2011. Whereas the former was relatively unchanged from the previous quarter (up 1 percentage point from 15%), the proportion of completed assignments attributed to Gap Management decreased by seven percentage points (from 23% in Q3). These figures are notably higher than the next most cited reasons such as but then this is dependent on how the individual providers have categorised the reason for the assignment.

Unsurprisingly, the public sector is running at its lowest level for four years with only 34% of interim management assignments accounting for this sector. Additionally, as in previous quarters, the majority of assignments in Q4 were predominantly based in the UK (94%). However, this quarter saw an increase in the number of international assignments (6%), particularly those based in Western Europe.
By Steven Wynne