INTERIM MANAGEMENT EBOOK

2015 INTERIM MANAGEMENT EBOOK BY READING THIS EBOOK YOU LEARN: 1. What is interim management? 2. What can be achieved with interim managers? 3. How d...
Author: Sabina Bradley
3 downloads 2 Views 735KB Size
2015

INTERIM MANAGEMENT EBOOK BY READING THIS EBOOK YOU LEARN: 1. What is interim management? 2. What can be achieved with interim managers? 3. How do I find an interim manager? 4. What does it cost to hire one? 5. How to utilise interim managers?

NOTE: This ebook includes practical case examples of interim management and simple cost evaluation tool.

CONTENTS F ore w ords 3 1 . I nteri m m anage m ent in brief

4

2 . T y p es of interi m m anage m ent 

5

Interim management used for resourcing

5

Project-based interim management

5

Transformational interim management

5

3 . O rganisational m andate and interi m m anager

6

3.1 Interim managers in Nordics

6

4 . C onsultant , coach or an interi m m anager ? 

7

4.1 Differences in hiring a management consultant and an interim manager

7

4.2 Business coach or interim managers

7

5 . Price range of interi m m anagers

8

Example case 1. 9 months temporary management need

9

Example case 2. Seasonal management need

10

Example case 3. Combination of seasonal and project-based management need

11

7 . H o w to find a good interi m m anager ? 

12

8 . H o w to hire an interi m m anager ? 

12

Preparing for the project

12

Finding the right one

12

Choosing the right one

12

9 . C ase e x a m p les

13

Tomi Grönfors – Case Unmonday speaker

13

Olli E. Juvonen - Healthcare product company

14

sources 1 5

2 INTERIM MANAGEMENT EBOOK

Forewords The concept of interim management was first introduced to the world in mid to late 1970´s in the Netherlands. At that time, permanent employees were protected by extensive notice periods, which created high costs for the employers. By using temporary employment contracts companies were able to make use of a more cost-effective, flexible work force.

Today interim managers solve complex business cases with temporary assignments ranging from few months to a couple of years. At K2 Search, we’ve been actively promoting the growth of the interim management market in Nordics, providing our clients with top interim executives for a wide variety cases. These cases have provided us with a deep understanding of the market and the possibilities interim management can and will offer in the future. It ’s also the reason why we’ve decided to share our insights in the form of this eBook.

Within it we’ll examine what kind of resourcing tool interim management really is. What interim managers can deliver and what you should do to prepare yourself for a project. One thing is clear, interim management offers a great tool for difficult resourcing situations. These include turnarounds, difficult projects, export marketing and other projects that without special expertise would be hard to implement.

28.08.2015 Stockholm,

Johan Segergren CEO K2 Search Ab

3 INTERIM MANAGEMENT EBOOK

1. Interim management in brief An Interim manager is a person who’s specialised in temporary management positions. He or she works in management positions and reports to the top management, board or owners depending on the task at hand. It comes as no surprise that he or she is only on a short visit and is building no permanent position. When the work is done its time to leave.

When looking for a suitable team member for a winning team we look for passionate people. Passion creates motivation that is the most important factor when it comes to delivering results. Psychologists know [1][2] that top performers are primarily motivated by the desire for results. Interim

“A Finnish interim management study in 2014 showed that 87,6% (24% in 2013) of C-level people knew about interim management”

managers are people who crave just that. They thrive on challenges. Think of them as members of Special Forces. They get comfortable being uncomfortable. They know that who dares wins.

Interim managers deliver results and for that they invoice a daily fee. You can depend on them to deliver results accordingly. They work from your office and lead your team. Being part of your team interim managers differs from consultants. Interim managers are experienced business leaders who deliver results. They are happy to take on a challenging project with a short notice.

Globally interim management is already stable niche market. Countries like Great Britain have an already organised structure and a market with significant volatility plus specialised interim experts available. There are already executive search companies offering specialised resources like for example HR Directors for interim positions. The daily rates vary in price, from around £500 - £2000/day. Consequently, the UK market already has a good variety of skills and can support companies with different needs.

Interim management in Nordics is still a niche business. But it ’s growing fast. A Finnish interim management study conducted in 2014 reported that 87,6% (24% in 2013) of C-level people knew about interim management. In fact 17,3% of them had used interim managers.

Interim managers are a resource that can be used for “got to succeed” –projects. When a company does not have the right resources available interim management offers a handy tool and a solution [7]. The project might be a turnaround, streamlining or starting export business. The interim managers job is to secure the successful completion of such a project. They are men and women who are known for their high motivation and have a history of successfully completing projects.

4 INTERIM MANAGEMENT EBOOK

2. Types of interim management Interim management can be divided into three different categories [3][4]:

1. Resourcing based 2. Project-based 3. Transformational

I n terim man a gement use d for re sourc i n g Interim management is typically used when a company suddenly needs a substitute for a manager or a director. The need emerges quickly and the company is left unprepared. In such a case an experienced interim manager can join onboard even within a few days notice. In resourcing, it is important that the interim manager is overqualified to a given task so that he or she can take over a position in no time enabling the business to continue normally.

P roj e ct -b ased i n teri m m an age m e n t Project-based interim management positions are used to secure a critical project, process or a stage in company´s life. Objectives are clear and thus the needed profile for the project manager is as well.

“There is an ever-increasing amount of interim managers in Nordics.“

In most cases a special skill set is needed. The knowledge and skills will play a major role in the success of a project. Opening an export market, highly complex construction site restructuring or taking the company to stock market. When the project is done the interim manager moves on to their next assignment.

T ran sfo rmat i o nal i n te ri m m a n age m e n t Transformational interim management is used to restructure a company. Companies that are in need of a new strategy, knowledge, ideas or cultural change can benefit highly from having an interim manager on board. This can be the case when changing the organisational culture. This might include changing the sales organisation and approach, or adapting the way a company does business, for example, from a brick and mortar business to a digitalised ecommerce business. When the painful transformation phase is over the interim manager makes sure people know how to continue on the new path.

Interim management is a great management tool to solve acute business issues with highly motivated, skilful and effective executives. They find their place in organisations in no time and know when to leave. Their objective is to create something new, finish a critical project or prepare the company for the future.

5 INTERIM MANAGEMENT EBOOK

Advantages of interim management 1. Interim management is a cost ef fective tool for temporar y management needs 2. Interim managers are available in no time and for the time required 3. A special skillset can be hired even with one objective in mind 4. Interim managers help the organisation to learn new skills and attitudes 5. Given task and objectives can be ver y demanding

3. Organisational mandate and interim manager To run a business an interim manager needs a mandate from the top management or owners. Sure they have to have excellent social and networking skills to get people on board, but they also need a mandate. It is of utmost importance that they have the support of the top management. Otherwise you can only expect failure while unsupportive or back stabbing managers become the Achilles heel in your project.

As part of your management team interims have their responsibilities and rights. They work like any other manager or director. The difference is they work on a daily rate through their own company. The only exception is a CEO position for which they cannot be fully appointed. This is due to local legislation in countries like Finland and Sweden where only a natural person can be appointed as a CEO [5]. In these cases the interim manager needs to be employed and paid a salary. This can be achieved with a temporary management agreement.

Interim managers have jurisdictional power to lead as given by their superior. The mandate is given when employed. It is a good business governance to have it in writing as well. A good assignment is short, simple and clearly documented. Pay attention to details as it will pay dividends in the long. Detailed documentation is how you ensure interim managers deliver results.

3 . 1 Interim man agers i n Nordi c s There is an ever-increasing amount of interim managers in Nordics. At K2, we know them well. While our customers still prefer permanent recruitment in most cases we do support them in interim issues more and more often. We keep close relations to the best in the field to understand when they might be available for future projects. The Nordic countries have less interim managers than say the UK, but the available people are top-notch professionals.

5 most important qualities of an interim manager 1.

Highly motivated and experienced business professionals

2.

Operational role with goal-oriented mind-set

3.

They have mental toughness and expertise in a given field

4.

They concentrate only on the given task and objectives

5.

They start now and leave when ready

6 INTERIM MANAGEMENT EBOOK

4. Consultant, coach or an interim manager?

4 . 1 Di fferences i n h i ri n g a m a n age m e n t c on sultant and an inte r im manage r Management consultants and interim managers have a lot in common. The main difference is responsibility [6]. Whereas you might buy top management consultants to analyse your business strategy you expect interim manager to offer their views and then implement them. By using interim managers you get to know what is good and what needs to be changed in your organisation. The analyses might not be as detailed as McKinsey might offer you, but the speed, quality and cost of implementation is.

Interim managers are experienced and thus capable of understanding complex analytical issues. But they are not paid to make you drool over presentations and scenarios. They analyse, come up with a solution and start implementing it. That ’s why interim managers are cost effective when compared to consultants. They are people that make things happen.

Consultants are often more distant from the organisation other than key project members. Interims have to win people on to their side to get them to do the work. Interims interact and teach people new things instead of giving them ready-made answers. Interim managers career is highly dependant on their success in individual

“Make sure you have the management group support for your interim manager.”

assignments. That is why they are very focused on results and implementation.

4 . 2 Bus i n es s co ach or i n te ri m m a n age rs To change a business culture you might need a management consultant ’s help. They provide their views and forward the problem to business coaches that coach the team in the right direction. In most cases it is not only reasonable, but the only way to do it. But there are exceptions. In some cases it might be wiser to hire an interim manager to take over the project. If the challenge is to get different organisational silos to work together or develop more open organisational communications the project might need a more prominent figure to lead it. In such a case interim managers offer a handy tool by being more hands on in a critical project and have the possibility to stay longer if needed.

7 INTERIM MANAGEMENT EBOOK

5. PRICE RANGE OF INTERIM MANAGERS Interim managers’ invoice a daily rate that will be agreed upon before developing an assignment. It is dependant on the expertise and experience of the person and the difficulty level of the project. Generally the daily rate can vary between 1000€ - 2000€ (9500 SEK - 19000 SEK / 7500 DKK - 15000 DKK). In our expertise the range in the Nordics, via a headhunting company is around 1300€ (12500 SEK / 9700 DKK) per day. This is also supported by a Pro Gradu made in Finland by Riikka Vahtervuo [7] that stated the price level being in Finland a bit over the 1000 € mark a day [7].

In most cases the price includes everything else but daily allowances if travelling is required. Interims have their own equipment (computers, phones etc.) if needed and insurances paid. They are ready tomorrow and if you are not satisfied they quit as quickly as they started. This is why interim managers are more cost-effective than permanent directors for shorter projects. They only invoice their working days and they concentrate only on the assignment. They do not spend their time in unnecessary conferences nor ask for sick day pay [7].

6. COST-EFFECTIVENESS OF INTERIM MANAGEMENT Interim managers are also cost effective when project costs are taken into account too. In this eBook we present three different scenarios for hiring an interim manager. We use effective cost structure as a basis of calculations. This means that the interim manager invoices daily rate and is responsible for his or hers salary, social security costs etc. We compare them to paid personnel to whom the salary is only a minor part of the effective costs.

NEED HELP? In 30 just seconds we are on your project. Click the link and ask for a quote.

START NOW

8 INTERIM MANAGEMENT EBOOK

E x amp l e case 1. 9 m on th s te m pora ry m an age m e nt ne ed A car wholesaler needs to fulfil a 9-month temporary management position. The company needs an expert to combine two companies and cultures after a merger. This is the type of project, which would be several times more expensive to do with a consulting company. The effective costs are compared so that there are no alternative costs and that the permanent director would be found and could start immediately. The variables are explained in the table.

COSTS

explanation of costs

total

PERMANENT Re c rui t me nt cost s

Co sts o f hea dh unt i ng

Salary

Ex per i en c ed C- level director salar y for a short term 6 m onths pay.

1 3 0 0 0 € / mont h

S o c i a l s e c uri t y cost s

Est i mates wi th 1,35 ti mes salar y. Includes all necessar y social security expenses.

1,35

B e nef i t s

Ca r lea se, hea lth in sura nce ja optional pension schem e and other benefits

1 500 €

S ta r t up cost s

Co mp uter, so f t wa re, ph o ne including cost of labour

3 000 €

H o li days

Ful l ho l i d ays fo r 5 weeks

5 wk

Re c rui t me nt cost s

Inter i m sea rc h co sts

5 000 €

I nte ri m ma na ge r i nvoic ing

D a il y rate 1000 €

1 0 0 0 € /day

Work i ng d ays

Ful l wo r k i ng d ays fo r 9 months

Full tim e

30 000 €

INTERIM

G ra p h 1 . 9 mont hs te mpo ra r y i nter im ca se mo nt hl y co st s

Graph 2 . 9 m onths tem porar y interim case cum ulative cost s

9 INTERIM MANAGEMENT EBOOK

E x amp l e case 2. Se ason al m a n age m e n t n e e d An industrial automation company needs a HR-manager for their resourcing and setting up the HR-function. The board had a plan for two different options:

Option 1. Setting up a HR-function with a HR-director and managers in different business units.

Option 2. HR-director on C-level and outsourced human resource service centres for different business units. For alternative option the board decided to calculate the costs of an interim HR-director for 6-7 days a month. The variables are explained in the table.

COSTS

explanation of costs

total

permanent Re c rui t me nt cost s

Co sts o f hea d hunt i ng

2 3 0 00 €

Salary

Ex per ien c ed C- level director salar y for a short term 6 m onths pay.

9 0 0 0 € / mont h

S o ci a l s e c uri t y cost s

Estimates wi th 1,35 ti mes salar y. Includes all necessar y social security expenses.

1,35

B e nef i t s

Ca r l ea se, hea lth in sura nce ja optional pension schem e and other benefits

1 500 €

S ta rt up cost s

Co mp uter, so f t wa re, ph one including cost of labour

3 000 €

Re cr ui t me nt cost s

Inter i m sea rc h co sts

5 000 €

I nte ri m ma na ge r i nvoi cing

D a il y rate 1000 €

1 0 0 0 € / day

Wo r k i ng d ays

Ag reed to u se 6- 7 wo r k ing days plus online support by phone or m ail on other tim e.

6 , 5 days / mont h

interim

G ra p h 3. Se a s on a l i nte rim ca se mo nt h ly co st s

Graph 1 . Seasonal interim case sum ulative costs

10 INTERIM MANAGEMENT EBOOK

E x amp l e case 3. Com bi n ati on of se ason a l an d proje ct- b ased manageme nt nee d A service company is about to launch a new service innovation and starting an expansion strategy later in the spring. The IT-department is working day and night to build right systems to support it. While the actual launch date is still unknown the management resource is needed in few months time. This person needs to launch the product in several markets and educate the permanent director to take over. The variables are explained in the table.

COSTS

explanation of costs

total

permanent Re c rui t me nt cost s

Co sts o f hea d hunt i ng

30 000 €

Salary

Ex per i en c ed C- level director salar y for a short term 6 m onths pay.

1 1 3 0 0 € /k k

S o c i a l s e c uri t y cost s

Est i mates wi th 1,35 ti mes salar y. Includes all necessar y social security expenses.

1,35

B e nef i t s

Ca r lea se, hea lth in sura nce ja optional pension schem e and other benefits

1 500 €

S ta r t up cost s

Co mp uter, so f t wa re, ph one including cost of labour

3 000 €

Re crui t me nt cost s

Inter i m sea rc h co sts

5 000 €

I nte ri m ma na ge r i nvoi ci ng

D a i l y rate 1000 €

6 000 € - 20 000 € /kk

Wo rk i ng d ays

Ag reed t hat less i n t he early phase and full capacity in the m iddle and the less

interim

Graph 6 .Com bination of seasonal and project-based interim cas e cum ulative costs

G ra p h 5 .C ombi nat i on of sea so na l a n d pro jec t- ba sed i nter im case m o nt hl y cost s

11 INTERIM MANAGEMENT EBOOK

7. How to find a good interim manager? Finding a good interim manager is crucial. Your project depends on it. You can start by using your network, LinkedIn and other mediums. Make a quick search on LinkedIn and there are thousands of interim managers in Nordics. But to find the right one you need two things:

1. A clear assignment and a candidate profile 2. A good partner to find the right talent.

At K2, we promise to find you the right candidate in 15 days. We know interim managers and we know who’d be suitable for your project. We also constantly keep in contact with them and can tell you when they’re available.

8. How to hire an interim manager? P re p ari n g fo r t h e proj e c t 1. Define clear objectives 2. Create a thorough project plan with KPI´s 3. Define the perfect candidate profile for the project 4. Create an A4 long brief for your interim managers and resourcing partners 5. Make sure the whole decision making unit is behind the project

Fi n d in g t h e ri g h t o ne 1. Contact your resourcing partner 2. Go through the specifics with them and ask for a quick longlist 3. Choose the four best ones and make sure you personally know their track records 4. Ask your resourcing partner to check references

C h oo si n g th e ri g h t on e 1. Go through the brief with all the candidates 2. Ask the interims to make a thorough explanation how they will achieve the results 3. Double check the references and let them meet the key personnel before making the choice 4. Make your choice and start quickly

12 INTERIM MANAGEMENT EBOOK

9. Case examples Tom i Grö n fo rs – Case Un m on day spe ake r B ackg ro u nd Unmonday speaker was in a product development phase and the company needed an experienced consumer goods expert to build a company for export markets.

O bj e cti ves 1. Turn the product development phase into a real company 2. Launch the product 3. Open up first export markets and secure first clients

I m plemen tat i o n The interim management position was a project based one. It was done in 2013. Tomi Grönfors worked as a Development Manager being responsible of setting up the business and launching the product. In total, the team was around 15 people. The objective was mainly to get the product ready and launched and also to get the company up and running. The project included setting up a supply chain, production, creating marketing and sales concepts, launching the product and starting exports sales. The work was done in a tight co-operation with the chairman of the board and with a mandate from all owners.

Res ul t s Unmonday was brought to market in just 10 months. A global supply chain was secured for all parts, processes created, systems implemented and first people recruited. First export markets opened and Unmonday was accepted into Apple Stores in EMEA region.

S um mary Interim management is very well suited for projects that have a clear timeline, objectives and demanding nature. As for Unmonday interim management offered a quick option to get the needed expertise in the house. Experienced managers have ability to get things done and make sure the focus stays on a given task.

13 INTERIM MANAGEMENT EBOOK

Olli E. Juvo nen - He alth c are produc t c om pa ny B ackg ro u nd A healthcare company had gone into crisis and needed a quick turnaround.

O bj e cti ves

1. Examine if and how the company could sur vive 2. Turn the cash flow positive 3. Turn the business positive

I m plemen tat i o n As an experienced turnaround expert Olli Juvonen immediately took control over the operative business. First he got to know the culture, key personnel and their perception of the company’s business. Then he examined their ability to perform and reasons why the products weren’t selling.

As an outsider to the company culture he was able to draw a turnaround plan after two weeks. As an experienced and known turnaround interim he got financiers, tax authority and major suppliers to believe in the turnaround plan. This was crucial to win trust for future reforms. All reforms were implemented quickly. The organisation started to believe in itself and its chances of survival. The company’s clients also quickly noticed changes they’d been expecting and the company’s financiers also began to trust it again.

Res ul t s When the reason for losses were pinpointed and acknowledged the company was able to do something about the problems. After the company cash flow turned positive, the first positive month was quickly accomplished. The company was in significantly better shape and ready to recruit a permanent director to run the business.

S um mary The interim manager swiftly secured the company’s future and its business while looking for a permanent director. It is very important that the interim manager is accustomed to create plans and present them in a manner that regains the confidence of both board members and financiers.

14 INTERIM MANAGEMENT EBOOK

sources

[1] Deci, Edward L. & Ryan, Richard M.: The “What ” and “Why” of Goal Pursuits: Human Needs and the

Self-Determination of Behavior. Psychological Inquiry, 2000, nro Vol. 11, No. 4, s. 227–268. Lawrence



Erlbaum Associates, Inc

[2]

Psychology of human strengths : fundamental questions and future directions for a positive psychology / edited



by Lisa G. Aspinwall and Ursula M. Staudinger. 2nd pr. 2003

[3] http://dralfoldman.com/2011/02/22/what-are-the-three-types-of-interim-management-assignment/

[4] http://www.lcm.cz/en/interim-management-general/interim-management-types

[5] http://www.kho.fi/fi/index/paatoksia/vuosikirjapaatokset/vuosikirjapaatos/1360309158958.html

[6] http://www.yrittajat.fi/File/8b173e7f-7d28-411c-828a-c2c7ce946a95/yritys_ja_kosulttiopas.pdf

[7] Johtaja vuokralle? Näkökulmia vuokrajohtajatoimeksiantoon. Pro Gradu, Riikka Vahtervuo, 14.4.2014 Turun Kauppakorkeakoulu

[8]

Interim-Management-Deployments in an innovation -centext. Doctoral Thesis, Jürgen Bruns,



Tallinn University of Technology, 2006



Interim Management Association UK, http://www.interimmanagement.uk.com/

15 INTERIM MANAGEMENT EBOOK

Suggest Documents