Platt Perspective on Business and Technology

Transitioning into senior management – Part 8: interim CEOs

Posted in job search and career development by Timothy Platt on June 10, 2011

This is my eighth posting in s series on transitioning into the executive suite (see my Guide to Effective Job Search and Career Development for earlier installments) and my second on assuming chief executive officer responsibilities. In Part 7: Taking a CEO Position, Building a Foundation of Trust I wrote about first steps, and with long-term hires or promotions to the CEO position primarily in mind. With this posting, I turn to a very different situation where an interim CEO is brought in. An interim CEO appointment is usually made as an internal advancement within an organization, though outside consultants with specific pertinent experience are sometimes brought in short-term as interim leaders too. And I add that an externally sourced interim CEO can come in free of the office politics and entanglements that potential internal candidates might have to deal with. But regardless of where the interim CEO is found, one particular detail of context is almost certain:

• The board of directors faces real uncertainty or disagreement as to the types of experience, skills, corporate culture background or personality of the longer term CEO who they need to bring in.

That type of situation can develop for a lot of reasons and by way of example I cite two possibilities here. There can be genuine disagreements as to what to look for in a new CEO with the board divided into factions. Or a list of candidate requirements may be in place that is relatively firmed up and agreed to, but that is so particular that it would be difficult if not impossible to find anyone in the real world job market who could satisfy it, at least in a short enough time frame. Whatever the reason, businesses and organizations in general need continuity of leadership to function and sustain themselves, and sometimes an interim leader is needed while the search proceeds for a more permanent hire.

All of the points raised in Part 7 apply to the interim CEO and with special force as they approach their new job. Their holding an interim appointment, after all, limits their long term credibility and authority there so starting from a sound foundation of mutual understanding and support is essential.

• Any interim CEO needs explicit support from the board of directors that while they may be in that position for a more limited period of time, they have full authority as CEO while holding that role.

Agreement to this on the part of the board needs to be explicitly stated as part of the contract to hire the interim CEO, and with any areas of exception to this clarified up-front and spelled out.

And the uncertainties and conflicts that lead a board to take an interim CEO approach translate directly into the challenges that this interim CEO faces in their new job. Essentially as a matter of operational definition, an interim CEO should always approach their job as if a change management challenge.

• An effective interim CEO works with their colleagues in the executive suite, and with the organization as a whole in identifying and addressing high profile and high priority issues. Longer term has to be allowed for, but most of an interim appointment’s efforts will be in the here-and-now in addressing stop-gap and immediate concerns.
• An effective interim CEO also works with the board of directors in helping them to bring their longer term CEO requirements into clearer, more consistent, more widely acceptable focus. They help the board make the next full time and long term CEO position viable and achievable and in large part through their day to day work on solving real world here and now issues, and in how they explain what they are doing and why.

As a final thought here, interim CEO’s are sometimes kept on as the new long term, more formally hired CEO for that organization. I have seen that happen a number of times, though it should never be assumed as an outcome of effective interim-hire performance. Assume “interim” means interim here and approach it like a consulting assignment and not as a long term position.

I will add that much of what I write of here applies to interim non-CEO CXOs too, with the single most significant difference being in how an interim non-CEO CXO would in most cases report to the CEO or President – to the most senior executive officer in place. That has certainly been my hands-on experience. And as a organizational exception, for a wholly owned business substitute “owner(s)” for “board” as appropriate.

I am going to discuss some of the issues involved with reporting to boards of directors in my next series installment, and will then turn to the issues of reporting to owners and in working as an executive officer not of the owning family at a family-owned business.

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