Interim managers are the ‘special forces’ of interim management

Michael Novack is an interim management professional, specialising in the launch, growth and transformation of companies and corporate projects in Europe, the Americas and Asia. He has extensive experience as a CEO and COO in the technology, media and digital sectors, having worked with more than twenty companies.

Madrid, 15 September 2022

Given your extensive experience as an interim manager at an international level, you have a global perspective on the use of interim management in project delivery. What benefits would you highlight regarding this service, and what advice would you give to organisations that engage it so that they can make the most of it?

The main advantage of engaging the services of an interim management firm is that the interim manager assigned to the project will resolve issues that no one else in the organisation can. It is important to clarify that interim managers are not simply executives with a wealth of experience. They possess specialised expertise in specific types of business-critical challenges that require a swift diagnosis based on the identification of threats and opportunities; a clear plan outlining what is needed to resolve problems by making the most of, or transforming, available assets; and the immediate implementation of measures designed to deliver results and strategic impact. In other contexts, it is evident that a regular soldier with a long military career is not necessarily equipped to handle a situation requiring the intervention of special forces, or that an urban firefighter is not qualified to extinguish a fire on an oil tanker. Similarly, special situations within a company require specific capabilities which corporate executives, due to the extraordinary or critical nature of these circumstances, have not developed.

The role of the Interim Manager continues to be confused with that of an expert or specialist with extensive experience. A company may have excellent professionals on its staff and yet, despite this, lack knowledge on a particular subject at a specific time. That is what consultants are for. What sets Interim Managers apart is that we are seasoned in navigating chaos and corporate crises. We have built professional careers that have exposed us to a wide variety of situations, often across different sectors, giving us both perspective and agility. What defines us is not the breadth of our experience but the skills we have developed to manage crises or periods of change for which companies are unprepared. Interim Managers are the ‘special forces’ of management.

Herein lies the great added value of the interim manager: in the relevance of the skills we possess to tackle extraordinary situations. What defines the term ‘interim’ is not the duration of the contract, but the duration of the situation requiring intervention. The moment the interim manager resolves the issue, their role ends.

As for a recommendation to maximise the effectiveness of an interim management service, it is essential that organisations trust the firm providing the service and empower the selected individual, as the effectiveness of their contribution will be directly linked to the support they receive.

‘What defines interim management is not the extent of their experience, but the skills they have developed to manage crisis situations and changes for which companies are unprepared. Interim Managers are the “special forces” of management.’

What do you think are the main reasons why companies engage interim management services? Do these vary significantly from one country to another, or from one region to another?

The main reason why companies seek an interim manager is because they are facing an unusual situation which they cannot resolve using the resources within their existing structure. A large proportion of these situations are critical and relate to change management, because organisations, like people, require additional skills to deal with them – skills that are not necessary in the day-to-day running of their operations or in people’s everyday lives. Most traditional executives are trained in growth rather than change. Similarly, although change is becoming more frequent, it is not constant either, but sporadic; therefore, the need for an interim manager must, by its very nature, be temporary. Once Interim Managers have made their assessment and drawn up the relevant plan, they often assist the company with the implementation process as well, though this is not usually for periods longer than one or two years at most. Sometimes the interim manager is eventually hired on a permanent basis, but I would point out that, whilst an interim manager can perform the duties of a permanent manager, a permanent manager cannot necessarily perform those of an interim manager.

Another of the most common reasons why companies specialising in interim management are engaged is the urgent need to replace a key executive. Again, this is a critical situation, as the executive’s responsibilities must continue to be met whilst a permanent successor is being selected – a process that can usually take between six and twelve months. The contribution of the interim manager in this case is that, given our wide-ranging experience, we are able to adapt very quickly to any environment. We are used to ‘hitting the ground running’, and can prevent costly disruptions to a company’s operations.

‘You don’t need someone who knows your operation to explain where the fire is; you need someone to determine the causes, put it out and secure the structure – quickly.’

Finally, and in my own experience, one of the specific situations in which interim managers provide the greatest value is in rescuing and restructuring companies. The classic ‘turnaround’ is a discipline that addresses situations where executives within permanent structures have been unable to lead a company to success, or where critical scenarios have put its survival at risk. All over the world, when your business is on fire, you call a firefighter. You don’t need someone who knows your operation to explain where the fire is; you need someone to determine the causes, put it out and secure the building – quickly. It is no easy task to step into a company in crisis – often facing significant resistance – and, within a very short timeframe, identify the causes of the fire, who is responsible, and who can help put it out.

There are other situations, such as special project management, process optimisation, cost reduction, or mergers and acquisitions, for which interim managers are hired. However, in my view, these are not necessarily the areas where the greatest contribution is made or where the full benefits of this type of service are most evident. Unlike in the critical situations we have discussed, in these cases we do compete with the services provided by the ‘regular army’ of consultants, experts or ‘project managers’.

As for the reasons why interim management services are engaged, in general, they do not vary greatly between regions of the world, although there are cultural nuances. For example, in the US, change management is not such a high priority, as it is much more deeply ingrained in the corporate culture; or in Asia, where management teams are built up over many years and are based on very strong foundations of trust, it is less common to temporarily replace key executives. But in all the countries I am familiar with, the main reason is to tackle a critical situation for which the company lacks adequate in-house resources.

Undoubtedly, we are facing a paradigm shift in the way we tackle organisational transformation processes. Is interim management the best way for a company to manage the execution of specific projects? Why not address these situations with permanent management structures?

Companies have recently been facing great uncertainty caused by the acceleration of social, political, economic and technological change. Rules vary from quarter to quarter, making it very difficult to chart a stable course over long periods. It is like trying to keep the helm steady during a storm. Although storms are becoming more frequent, and executives in any field need to develop the ability to adapt and manage chaos, the main advantage of relying on the professional services of an interim manager during such critical periods is that these services are provided by an expert trained in dealing with these kinds of special situations.

Traditionally, companies have defined their resources and designed their operations to function in accordance with strategic premises and specific plans projected over three or five years. The changing environment is exposing rigid structures, testing organisations’ capacity for transformation and agility when it comes to identifying the need for change and, above all, implementing it. This is where the relevant experience of an interim manager can make a significant difference, by catalysing and accelerating both processes.

It is not that Interim Managers know more or are smarter than managers in permanent roles; the distinction is that we possess different knowledge. We have been exposed to a wide range of situations on many occasions and have faced a variety of circumstances that provide us with a perspective directly applicable to these types of contexts. It is obvious that permanent managers know their organisation better, but the interim manager is the perfect tool to help them prepare to navigate the organisation through certain complex environments and tackle critical challenges that are out of the ordinary.

How does the situation in Spain compare with that in other countries where interim management services have been used frequently for decades, such as the UK, the USA, the Netherlands, France and Germany?

In Spain, interim management is not yet fully understood. It is still viewed as a temporary employment service, and the direct translation of ‘interim management’ itself leads to even greater confusion. I believe there are two fundamental obstacles to the development of this discipline in Spain. Firstly, there is a lack of understanding of the value proposition of interim management; and secondly, there is resistance to the cost associated with its contribution.

Interim management is a business function, not a recruitment formula. In Spain, interim managers are still perceived as temporary resources brought in to ‘fill a gap’, such as covering maternity leave. Confusing interim management services with those of a temporary employment agency highlights a lack of understanding of the nature of the service and the significant added value it brings.

This value takes the form of a direct and positive impact on a business’s strategy, operations and results during a critical situation that would otherwise have a negative effect. Consequently, the contribution is twofold: not only does it improve results, but it also prevents significant losses or even bankruptcy. The interim manager is not a ‘human resource’ but a management tool. And as such, they should not even be selected by the HR director but by the CEO or COO, just as they would an investment in machinery or software that will directly impact the bottom line.

This leads to the second obstacle, which reflects how underdeveloped the implementation of interim management services is in Spain: price sensitivity. When a company purchases machinery or software to improve efficiency and performance, the expenditure is regarded as an investment that can be written off over a certain period. No one is surprised that it costs more than the CEO’s salary, because it is a direct investment in the bottom line and the company’s results, not a staff cost. The high value placed on interim managers in other countries for their specific expertise applicable to a crisis situation at a time of urgency is not easily accepted in Spain. This culture is portrayed very well in a classic Spanish film from the 1950s, *The Girls of the Red Cross*, in which a mechanic resolves a serious problem in a very simple way. He repairs a broken-down car in a minute and charges a fee that the owner finds outrageous for ‘tightening a screw’. The great Spanish actor, Toni Leblanc, replies that tightening the screw was free. The charge was for knowing which screw to tighten and getting the car running again so that the client could continue his journey. Another classic Spanish writer, Quevedo, once said – and the poet Machado reminded us of this wise saying: ‘Only a fool confuses value and price.’ And the truth is that determining the price of interim management services is always tricky. The standard practice of charging by the day or by the hour is, in fact, at odds with the value proposition itself, since the cost should be directly proportional to the impact on the company’s bottom line. How much is it worth to fix a failing company? Or to put out a fire that could destroy it? These are questions I always answer with a brilliant advertising campaign slogan: ‘What do clouds smell like?’ However, to simplify the terms of service, interim management is charged at hourly or ‘daily’ rates, which accordingly place it within the scope of professional consultancy fees and are subject to what the company is willing to pay.

“The interim manager is not a ‘human resource’ but a management tool. And as such, they should not even be selected by the head of human resources but by the CEO or COO, just as they would an investment in machinery or software that will directly impact the bottom line.”

In the countries you mention – where this proposal and the value it brings are well understood, such as the US, the UK, France, Germany and the Netherlands – daily rates of $2,000 are common, whilst in Spain, even half this fee is often considered scandalous and even offensive. The common response of “But then you’ll be earning more than the CEO!” sums up this disparity between the perception of value and price in Spain. Add to this the cultural nuances I mentioned earlier. In my experience, I have found that the Spanish job market is driven, to a large extent, by trust and loyalty, which are often valued even more highly than results. The arrival of a highly experienced and well-trained professional, who steps in to resolve a situation that permanent managers have been unable to resolve – and who also earns more than them – is usually perceived as a threat or an affront. Instead of welcoming temporary assistance that will benefit everyone, staff managers frequently interpret the trust and delegated authority placed in the interim manager as a lack of confidence in them. This often becomes a major obstacle that the interim manager must navigate tactfully, as the success of the assignment is almost always very difficult to achieve without the involvement and support of the entire team.

On the positive side, it is true that, despite the lack of awareness and resistance mentioned, there has been more discussion about interim management in Spain recently, thanks to the information that organisations such as the Business Institute of Interim Management and AIME have been disseminating for years. The flexibility it offers and the wide range of managerial talent available, both locally and globally, is significantly increasing the number of services being commissioned. I am confident that the results we deliver will allay any doubts regarding the value provided by Interim Managers and the companies offering this service, which is gradually growing in Spain.

We know that in other countries public bodies engage interim management services. However, it seems that in Spain this is not the case. Can you tell us what the reasons are?

It is true that outside Spain, particularly in northern Europe and the US, it is common for public bodies and government administrations to engage interim management and consultancy services. However, in Spain this practice has not yet been widely adopted. In my view, I believe this is fundamentally due to the bureaucratic complexity of the administration and to political sensitivities. The procedures for contracting services, legal tenders and the appointment of advisers are intertwined with the role of ‘interim’ advisers who, quite often, tend to become permanent civil servants, and I don’t even want to imagine the headlines reading ‘the Industry Minister’s adviser earns twice the minimum monthly wage of a Spanish worker in a single day…’

Once again, the main obstacle is cultural, given that in the US, for example, it is perfectly understood that a qualified professional, or a prestigious consultancy firm, can charge government administrations or public bodies hundreds of thousands of dollars for providing specialist knowledge that they lack and require. The irony is profound, since politicians and public administrators should be the quintessential interim managers—the best qualified and the best paid—as their impact would be reflected in the balance sheets of the most important organisations: our States.