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Why choose BIE?
What's New?Interim executives in family-owned businesses
The nature of small businesses
Of course, all businesses change over time, but smaller businesses are much more volatile than bigger ones because their futures are more uncertain. Success can turn to bankruptcy with exceptional speed in the smaller business. An interim executive has to be able to react quickly. On the other hand, the interim executive, carrying no historical baggage, is well placed to be able to identify and prepare for the crisis on the horizon and then do something about it.
Businesses with ambition will hope to grow, and growth brings its own changes. A business with 500 employees is a fundamentally different management concern from a business with 200. What worked in the latter might well be a source of weakness in the former. Building a bigger business often involves breaking something that doesn’t yet seem broken. Again, an interim executive can use his or her experience of other businesses in different stages of development for the benefit of his client business. He can be a critical agent of change in helping the business grow from one stage of development to another.
Leadership vs management
New businesses are driven by spirit, enterprise, the calculated ability to take a risk and make it work, hard work and passion. It is increasingly common to encapsulate these characteristics as “leadership.” Leadership is defined by way of contrast with “management.” Management in this context is altogether a less exciting affair – dealing with control, process, discipline, reporting and measurement, for example. But as the business grows, the importance of a decent management infrastructure is critical.
In some senses, understanding the balance between leadership and management is one of the most critical insights that can be brought to the younger business. It helps explain the tension between founder-managers and second-generation managers. It helps explain why growing businesses run the risk of losing “character” and becoming over-managed and under-led. Interim managers can help with the balance – not least by recognising that they have less to offer under the “lead- ership” heading than they do under the “management” heading. But in helping with the latter, they enable the founders to focus on the former, thus ensuring that the business gets the right balance between the two. Such a balancing act is difficult to maintain, but an experienced interim manager will address it – in part by defining very carefully the role he has been brought in to address and how it complements the strengths of existing management.
The role of the founder
No role changes more than the founder’s as the business evolves. It is rare for a business leader to successfully direct the business he has founded through all its stages of development. No-one should be fooled into thinking that the likes of Richard Branson are anything but exceptions that prove this rule. Indeed, by the time the business becomes “well-managed,” many founders find themselves horrified at the prospect of having created just the sort of business they escaped from in the first place. An interim executive – or maybe a series of them – has an enormous role to play here in coaching the founder in the role changes necessary as the business evolves.
In moving from a business driven by leadership to one built on management, people often talk about “professionalising” management. Yet many people have no idea what this really means or how to go about it. Again, an interim manager has much to offer here in establishing management command and control systems.
Many founders view exit as a natural personal target for their own involvement in the business. But the value of many smaller businesses is often tied up as much in the person of the founder as it is in the entity of the business. An interim manager can help groom the business for sale and help develop management processes and systems robust enough to withstand the exit of the founder. Of course, “exits” come in all sorts of guises, many if not most of which are impossible to anticipate. Events such as death or illness can call for a decent interim executive. And a smaller company is usually much more at risk from events of this nature than bigger businesses.
Next: When blood is thicker than water >
To discuss your interim management requirements with BIE call +44(0)20 7222 1010