• Laurence Ponchaut

Accelerating change while limiting the risks: interim management could be the answer.

Cet article a été publié dans l'édition d'avril 2019 de l'Agefi Luxembourg.

Change is here to stay Long term prosperity and success of any organization (whether in the private, public or non profit sectors) is the main focus of any CEO.

Business environment is changing rapidly. Technological changes through digital transformation and the use of AI are transforming our ways of working. All industries and services will have to adapt to changing environmental regulations due to the increasing pressure by a more aware public. Global businesses will have to operate in a more protectionist world. How will the war for talent impact organisations ?

All these examples lead to the conclusion that business and other organisations will have to adapt and adapt rapidly to remain relevant in their sector because changes are not only here to stay but changes will accelerate let alone the occurrence of non linear developments and discontinuites like a major geopolitical or financial crisis.

Anticipating the change

CEOs have to perceive the need to adapt their organisations early enough but they also need to have the required resources and talents available to define and lead the necessary transformations.

Unfortunately, in the last couple of years, the pressure to go leaner has been extremely high --and rightly so -- , hence the “extra fat” is unlikely to be found in structures with good financial results and good G&A ratios.

Most of the time, the proactive CEO will turn to outside consultants to assist in defining the strategic reorientations or the necessary changes in the management or operational processes. In most cases, consultants (even the best ones) fall short when it comes to implementation.

At this point, the top management knows where to go, is convinced of the need to change and the rest of the organisation “just needs to do it “.

Unfortunately, things are not that simple. Relevant authors show that 70% of the change programs end up as a failure leaving these organisations with the worst of all worlds. Very often, the reasons to fail are the lack of competent resources to lead and support the change both on the hard and the soft sides.

Placing a “turbo” in the organisation : the use of interim or transition management

In the last couple of years, organisations have used more extensively and systematically a new flexibility tool : interim or transition management. This allows them to access the necessary management resources and talents (in particular if quite exceptional) unavailable internally to tackle urgently critical phases in their development resulting in drastic transformations: it could be the start up of a new activity or the management of a new project, it could be the adaptation of an industrial or management process or it could be the management of a crisis or a turnaround project.

Interim management gives flexibility to the user because it adds the necessary “turbo” to the organisation only when it is required and only for the period that it is required.

But interim management needs to be used and implemented carefully and professionnally to be at its best and provide the expected results.

The road to success for an interim management assignment

a. The initial condition for an interim management assignment to succeed is that the organisation must recognize the existence of a burning platform (the absolute and urgent need to move with the project at hand) and the fact that the necessary competences, talent and leadership to conduct this project are not available internally.

b. The organisation must then define clearly what the objectives of the assignment are. Success must be measurable ( quantitatively and objectively and/or even subjectively for a part).

c. Based on a clear and shared view of what is expected, the required interim manager profile could be defined. Is a specific sector knowledge required? What is the essence of the issue (industrial, commercial, financial, organisational, etc…) ? What is the nature of the assignment (development issue, cost reduction program, post merger integration, …)… ? The identification and choice of the interim manager must take into account the specific culture of the organisation the interim manager will join to ensure a perfect fit and subsequently a good integration of this “outsider-insider”.

d. The key in the selection process is the proven track record of the interim manager in the areas that are critical during the assignmnet to make sure that the learning curve will be as flat as possible because most of the time urgency is an issue. This is a key difference with consulting at large.

e. The next factor of success is a clear (and clearly communicated ) program to be carried out by the interim manager. It should be understood that any predefined plan will be like a living organism that will have to be adjusted and updated regularly to take the realities of the situation and of the people into account . Good program/project management capabilities are key to achieve the expected results. The split of responsibilities must be clearly defined between what could be handled by the internal teams and what needs to be handled by the interim manager.

f. Good attention should be paid to the induction process (introducing the interim manager, communicating responsabilites and program)

g. Last but not least when the objectives of the assignment have been reached, the hand over process is fundamental to make sure that the results achieved during the interim management assignment will be stable (when the interim manager leaves the organisation) and that the organisation takes ownership of the changes that have been implemented through the assignment.

Interim management service provider ?

When an organisation decides for an interim management approach, they could follow two different avenues to do so. They can either organize the interim management assignment by themselves (ie recruit the interim manager and follow up the project internally) or ask an Interim Management services provider to take full responsibility. The latter will probably be 25-30% more expensive but offers the following advantages :

a. The service provider has generally a wide data base of experienced interim managers, hence the likelyhood to identify a better and more suitable candidate than the organisation would have done is high. Moreover, the service provider will assess whether an « overdimensioning » of talents and experience compared to what would be strictly required for a specific assignment would be a plus.

b. The service provider has a methodology to follow up the project. It constantly evaluates if the progress is in line with the plan and with the expectations. It detects the weak signals to take early corrective measures.

c. The service provider has accumulated experience and knowledge through the management of numerous transformation projects in different sectors and in solving various types of issues. They can commit to bring this added value to their interim or transition manager and to their clients.

To sum up

Dealing with change is an intrinsic part of managing organisations today. It is very likely that the speed of change will increase and that top managers will have to deal with non linear developments and total discontinuities or disruptions.

To be responsive enough or even proactive in such changing business conditions, the necessary resources have to be set in place without having to adjust the structure permanently.

Interim management is one of the options available to improve both flexibility and proactivity. Using a specialised service provider increases the likelihood to select a better candidate, gives a quasi certainty to reach the expected targets through a systematic and professional process and program management .

In a nutshell, it allows to accelerate the change process while limiting the associated risks thanks to experience, proven methodology and solid but flexible process.

Joseph Sadis

Partner EXIM Luxemburg

Managing Director SADIS & Co