Interim management: cost or investment?

There is no denying that we find ourselves in increasingly challenging times and according to various sources, with no obvious let up in the economy any time soon.  This begs a question as to why some businesses are still reluctant to engage with Interim Executives to help them drive their businesses forward.  After all, it remains more than ever, a flexible resourcing solution and one that represents excellent value when measured against the positive impact the Executive Interim will have on the organisation.

There are two mindsets for those that need to engage the help of an interim executive for driving change, turnaround, restructuring, project/programme management or for a shortfall in the leadership team.  Firstly they recognise they have a problem, meet some interims and are frightened off by the "cost" as they are trying to compare this to a permanent equivalent salary.   The second view is of those that recognise they will see a significant return of 10-20% on their investment, that it provides a no strings flexible solution and is seen as a service offered by a business rather than a soon to be employee.

Pre-recession when given a client mandate price was very rarely talked about.  There was a problem and they did not possess the internal capability to resolve themselves and therefore understood they needed to engage an external resource in the guise of an interim executive to help them.  The difference now though is that I am constantly hearing stories of assignments not going ahead with cost as the barrier because comparisons are being made with equivalent permanent salaries.  This is like comparing apples to oranges.  You can’t.

Any businesses when making a decision on a purchase whether it is for capital equipment or services needs to examine the ROI.  Calculations will be made on risk vs. reward and generally a decision made on whether there is a benefit to the business from making the investment.  This decision making process is no different to that of engaging (not hiring) an Executive Interim.  It is an investment for the business that will produce a return. 

The financial benefits of engaging an executive interim can be extraordinarily high.  Accountancy Age carried out a study of 400 Business Change and Improvement assignments.  The study found that on average each executive interim delivered a return on investment of 1400%.  When this is analysed with the relatively low cost in interim management fees the savings / benefits to the business are really quite staggering.

Everybody moans that the economy is in poor shape, opportunities are thin on the ground, business is tight, customers won’t spend etc.  Surely it is time for us all to start driving programmes that will improve businesses that might just go some way to kick starting the economy and therefore get back to the days where we can all benefit from the cycle that ensues when businesses invest in their future.

By Steven Wynne

Growth in new assignments shows continuing demand for interim managers

The latest Ipsos MORI survey conducted by The Interim Management Association’s (IMA) of the UK’s leading interim management providers has shown a clear rise in the number of new assignments started  in quarter 3 2011, compared to the previous three months. The survey covering July to September 2011 reveals a 22% increase in new assignments, despite the challenging economic conditions.

The survey indicates that the private sector now accounts for 65% of all completed interim management assignments, up from 61% in Q2.  This share of private sector assignments completed by IMA members is at its highest level since Q4 2007 and appears to have returned to pre-recession figures.   

The number of enquiries received also grew in Q3, continuing an upward trend which sees enquiries rising by 68% from a low which occurred in the fourth quarter of 2010.  This is clearly encouraging news and confirms that activity levels have been increasing.

27% of requested assignment functions are from Special Projects (down from 29% in Q1 2011) followed by Finance (20%) for which the proportion is constant from the previous quarter. C-suite executives represent 8% of the IMA business in this survey.

The most common reason for an assignment is Programme/Project Management, with 36% of all interim executives hired for this purpose (up three percentage points from the previous quarter of 33%). Perhaps because this is a convenient label to give it?

Business Improvement and Change or Transition Management represents 15% and 14% of completed assignments respectively. These levels are relatively unchanged from the previous quarter, with the former unchanged and Change or Transition Management decreasing by one percentage point.  These figures are notably higher than the next most cited reasons. Interestingly Turnaround is surprisingly low but this has been a busy area for us with many assignments needing Turnaround expertise.

By Steven Wynne

Do people listen? Do we recognise talent when we see it?

A man sat at a metro station in Washington DC and started to play the violin;
It was a cold January morning.
He played six Bach pieces for about 45 minutes.
During that time, since it was rush hour, it was recorded that over a thousand people went through the station, most of them on their way to work.  Three minutes went by and a middle aged man noticed there was a musician playing.  He slowed his pace and stopped for a few seconds and then hurried up to meet his schedule.

A minute later, the violinist received his first dollar tip: a woman threw the money down and without stopping continued to walk.

A few minutes later, a man leaned against the wall to listen to him, but then looked at his watch and started to walk again. Clearly he was late for work.
The one who paid the most attention was a 3 year old boy.
His mother tagged him along, hurried but the child stopped to look at the violinist.
Finally the mother pushed hard and the child continued to walk turning his head all the time.
This action was repeated by several other children.  All the parents, without exception, forced them to move on.

In the 45 minutes the musician played, only 6 people stopped and stayed for a while.
About 20 gave him money but continued to walk at their normal pace.  He collected $32.
When he finished playing and silence took over, no one noticed it.  No one applauded, nor was there any recognition of any kind.

No one knew this but the violinist was Joshua Bell, one of the best musicians in the world.
He played one of the most intricate pieces ever written with a violin worth $3.5m.
Two days before his playing in the subway, Joshua Bell sold out at a theatre in Boston and the seats averaged $100.

Joshua Bell playing incognito in the metro station was organized by the Washington Post as part of a social experiment about perception and priorities of people.
The outlines were: in a commonplace environment at an inappropriate hour:  Do we perceive beauty? Do we stop to appreciate it? Do we recognize the talent in an unexpected context?
If we do not have a moment to stop and listen to one of the best musicians in the world playing the best music ever written, how many other things are we missing?

Food for thought...

By Steven Wynne

Rise in the use of interim managers

The latest results from the IMA (Interim Management Association) Ipsos MORI market audit (compiled by all IMA members) for Q2 of 2011 has found the number of Interims engaged by businesses has increased marginally by 2% from Q1 2011. However, the number of executives actually engaged on assignment has decreased by 12% from Q1 as has the number of new assignments started in the quarter but only by 3%.

This is not so surprising as the month of April was challenging given the amount of people taking advantage of the extended holidays.   The length of assignment has remained much the same as Q1 and remains 28% higher than Q1 and Q2 of 2010.  The number of female executive interims currently on assignment has increased 2% from Q1.

The private sector remains active with 61% of completed assignments in Q2 2011 which is up from 57% in Q1.  The increase in the private sector is encouraging as figures have now returned back to those seen in Q3 2008 when the recession took effect and indicates the slight decrease in numbers is due to the decline in public sector assignments.  

Interestingly, the highest number of assignments is Programme / Project management but this could cover a multitude of sins.  ‘Gap management’ also features quite highly and I suspect some ambiguous reasons given for the need of the executive interim in the first place and feel sure the underlying need was likely to be more business critical.

It will be interesting to see how these trends develop but from our prospective, we remain busy helping clients with Change programmes, Restructuring, Turnaround, Business improvement and Finance related assignments.

By Steven Wynne

AWR - does it affect you?

With the impending implementation of AWR (Agency Workers Regulations) next month, have you considered how this might affect you?

Although it became law in December 2010, it is effective from 1st October 2011. The Agency Workers Regulations (AWR) is intended to give fairer working terms and conditions for temporary workers. The regulations include Executive Interims and some consultants unless they can demonstrate that they are working through their own limited company and are in business on their own account. 
The main question is who the regulations will affect.  Essentially all temporary workers including interim managers but not if they are operating through a limited company and if the contract clearly states that the client-candidate relationship is that of a business hiring the services of another business.
It would seem clients are not planning to make any significant changes to the way they use contractors. 

Research shows that flexible resourcing through the utilisation of Executive Interims will continue and hopefully increase but organisations remain unsure or even unaware of AWR implementation.
According to the REC’s latest Jobs Outlook, a surprisingly high number of employers - 23% remain unaware of the new regulations. A further 44 % are still undecided about what changes they are planning to make to their workforces ahead of implementation on 1st October.

The survey also shows that 42% of employers are not planning to make any significant changes to the way they manage and use agency workers. This would seem to reflect the fact that on closer examination, the regulations will not have the significant impact that may have been feared.

The importance of contracts remains higher than ever.  It is crucial your contract is watertight to protect you and the client and that for anyone embarking on a career as an Executive interim, the need to operate through your own limited company is more important than ever.

By Steven Wynne

Interim Management Sector continues to grow

The results of the IMA Ipsos MORI survey for Q1 2012 has some interesting findings including;

• Data highlights number of enquiries for interim managers is on the increase
• Sector continues to thrive in spite of possible threats from government PAYE proposals
• Women accounting for an increasing number of assignments

The number of enquiries for interim managers increased by 18 per cent in the first quarter of 2012 and the number of new assignments jumped by 20 per cent in the same period, according to the latest Ipsos MORI survey, conducted on behalf of the Interim Management Association (IMA), the industry body representing the leading UK Interim Management Providers.

Some other survey highlights include:
The average length of assignment was 152 days, compared with 173 in the previous quarter.

• Programme/project management was the most common reason for hiring interim executives, accounting for 36% of all assignments.
• Over half (53 percent) of private sector assignments were in banking and finance.
• Public sector business is dominated by local government - accounting for almost half (48 percent) of all public sector assignments.
• These findings confirm  continued growth for the Interim management sector and that it remains a practical, economic and speedy solution to organisations needing help with Change, Restructuring, Turnaround, special projects or to bolster their senior leadership capability.

However, we can’t ignore the threats that face the sector such as the possible changes to tax laws, which could require interim managers to go on to the payroll of companies that engage them, rather than operating  through a Limited company as a specialist in their area.  Whilst the Government plans to tighten the rules of ‘off payroll’ appointments at what remains a challenging time, it could threaten the value proposition of Interim Executives and the flexible resourcing solution that organisations can utilise to gain immediate results.

The survey also revealed female executives account for almost one third (31 per cent) of all the assignments, up from 24 per cent in the previous quarter.

Interestingly, given the recent press surrounding the small number of female executives represented at Board level following the Lord Davies review it is positive to see an increasing number of female interim executives being engaged on assignment and it seems to be a serious career choice for an increasing number of female executives.

By Steven Wynne

Demand for Interim Managers on the increase

Although still in difficult trading conditions and much uncertainly still prevalent in many sectors, the demand for Executive Interim Managers has seen an increase in Q1 2011.

The latest results from the IMA (Interim Management Association) Ipsos MORI market audit (compiled by all IMA members) has found the number of Interims engaged by businesses has increased. 
The needs have been for reasons cited such as special projects or for change programmes to facilitate businesses that are going through change or transformation.

The report highlights a 29% increase in the number of interims utilised for special projects, 20% increase in finance assignments, 32% increase in programme /project management and 21% increase for Business Improvement. 

The number of new assignments saw an increase of 13% which is the highest recorded level since Q2 of 2010. Private sector usage is higher than public sector as you would expect during 2010 compared to an almost even split historically.

Businesses are turning to Executive Interim Managers to help drive change, projects and operational efficiencies.  They can bring in an experienced Executive to quickly deliver the agreed objectives and to drive change programmes without the distractions of ‘business as usual’ thus providing a good return on investment.

By Steven Wynne

Companies turn to interim managers in an upturn

As business emerges from the recession demand for interim executives is continuing to grow according to Macallam Interim.

A recent report by the Interim Management Association (IMA) shows that more businesses are seeking interim managers as a "valuable resource" for companies looking to hire skilled employees to aid their recovery during the much-vaunted upturn.

During the past 12 months many companies have been panicked into letting key staff go as they move to clamp down on costs. Now they are seeking new talent to lead them into growth.

The skills required to manage a business in a down turn are very different from those required in an upturn. Managing a business out of recession and setting in place the structure to ensure future continued growth requires a certain set of skills.
According to the IMA, which represents the UK’s interim management providers, turnaround specialists have been in particular demand since the financial crisis, with businesses calling on such experts to help salvage key projects left in disarray by the downturn.

Good interim managers normally have a few grey hairs and battle scars. They are very experienced and have been through the economic cycle a few times and, as a result, they are able to hit the ground running when they join an organisation and will often deliver tangible results within a very short time.

The latest findings from an Ipsos MORI survey conducted for IMA shows that the use of interim managers increased by nine per cent over the first two quarters of 2010. Covering the period between April to June this year, it also reveals that the proportion of private sector interim assignments has increased to more than half.

By Steven Wynne

Launch of Macallam Interim

Macallam Interim is a new interim management recruitment consultancy which has been launched by Steven Wynne alongside sister company - the long-established Harrogate executive recruitment and career consultancy Macallam.

Macallam Interim will specialise in the identifying interim executives for clients with an immediate problem who require a short-term solution with long-lasting results.

Steven, who has many years experience of successfully placing interim executives in a wide range of sectors and disciplines, said: “In the current challenging economic climate client companies across the UK are increasingly seek an interim solution to some of the problems they are facing.

"Interim managers usually have many years experience in a particular sector or discipline and can quickly add value to the companies they work for whether that be on a six month project or something longer term.”
With a six-strong team of consultants Macallam Interim also maintains an in-house research function so when faced with a particularly challenging assignment it can explore beyond its database to ensure it can quickly deliver the very best solution.

Steven, whose career began in the pharmaceutical in operations and logistics, has been involved in executive search and selection since 1998 and has focused on interim executive recruitment since 2004 and helped clients with a short-term need for a business critical problem.

Macallam Managing Director Duncan Carter said: “Macallam Interim brings a fresh dimension to our company as Steven and his team give us access to a new source of talented executives at a time when many clients are looking for an interim solution to specific problems with their organisation.”

By Steven Wynne