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Why choose BIE?
What's New?Interims V Consultants - what's the difference?
Back in the sixties, seventies and eighties, when an organisation needed external senior-level help to handle transition or change, the only option was to bring in experienced management consultants. The consultant’s role was to advise, guide, recommend or facilitate and, most importantly, persuade the client to accept their recommendations. Implementation of these recommendations was the responsibility of the client team.
Management consulting is now a £6bn industry in the UK. It is widely understood and accepted in all sectors as a powerful strategic option when a business is facing new opportunities or challenges. Consultants are usually engaged to help management decide between a number of strategic options – for example, acquire or divest; expand or consolidate; centralise or decentralise; outsource or vertically integrate. Consultants may be used when the client needs a fresh injection of new thinking, or perhaps to validate one of a number of alternative strategies.
Over the last ten years or so, board-level interim management has emerged. Interims, usually called “company doctors,” were used initially as turnaround managers, often in high-profile rescues. The recession of the early nineties opened up the market further, generating both opportunities and candidates. The use of interim executive managers thus tended to become thought of as a “distress purchase” associated with failing businesses or sudden departures. As a result, clients have often been reluctant to admit to using interims, and growth has been quite slow. The total UK interim management market is still well under £200m a year. During the nineties, a new breed of interim started to be recognised – the senior professional interim executive specialising in change and transition management. This group, numbering under 1,000 in the UK, is motivated by the challenge of change. Often financially independent, these individuals are not between jobs but move from assignment to assignment. Given the right opportunity and correctly selected, they can add value to a business very rapidly.
Applications for interims
Interim roles generallly fall into three categories.
Turnaround/crisis
The highest-profile use of interim executives has been in crisis management or turnaround situations. Here the interim executive offers an ideal solution – he or she is an objective outsider, available immediately, able to focus solely on the problem at hand, and is a heavy hitter specialising in turnarounds. Time is of the essence, as the business will inevitably be running out of cash and in danger of being put into receivership. There will be no time to review and reflect. Immediate action must be taken to save the business. The interim will review, plan and implement while at the same time achieving “quick wins” wherever possible. The approach will be essentially pragmatic, focused on short-term cash flow and day to- day survival while building a medium-term plan. A hands-on approach is required. Clearly, this is not a typical role for a management consultant.
Critical vacancy
The second area in which interim managers are the preferred choice over consultants is filling critical vacancies pending recruitment. Even in a slow market, recruitment of a senior executive can take six months or more, and often the client cannot afford to wait. The primary requirement in this instance is continuity of day-to-day line management to ensure business momentum is maintained. Candidates must be immediately available and suitably over-qualified to be credible and effective from day one.
The client may propose that the interim defer changes until the full-time recruit arrives so that the individual can stamp his or her own mark on the organisation. However, engaging an interim executive presents the client with a window of opportunity to obtain an outsider’s view of the business and to achieve some rapid deliverables. As the interim has no career aspirations with the client, they can think and act quite objectively and take unpopular decisions if necessary.
Planned change
There are many planned change situations – such as acquisitions, disposals, mergers or restructurings – in which the client recognises the need to import additional management skills and experience. Until recently, this has been the exclusive domain of the management consulting firms. Consultants offer an injection of intellectual horsepower, and clients have the added security of making decisions backed by “blue-chip” recommendations. The management consulting firms have tailored their offerings accordingly and now offer a very broad spectrum of services, from totally strategic to highly technical. They employ the brightest graduates and MBAs and generate much of the “thought leadership” behind new business methods. But few of their employees have line management experience, and the firms have been criticised that their clients are left with little more than a detailed report. Responsibility for making the changes recommended and acquiring the necessary skills rests with the client. As the pool of interim talent has increased in size and quality, a growing number of UK business leaders have realised that professional interim managers can be used for much more than just filling a critical vacancy. Clients have found that interims are an effective strategic weapon to gain competitive advantage, through rapid and lasting change. They bring a refreshing degree of objectivity and prove excellent at building and leading internal teams and managing external suppliers – including consultants. Interims work from within, leading the business team and achieving much greater “buy-in” to changes. Changes introduced in this way are far more resilient than those created and imposed by an outside agency. Importantly, management is not outsourced to a third party. Finally, interims are available at a fraction of the cost of management consultants. The 2001 BIE/MORI Captains of Industry survey found that users of interims felt that “interim executives are more suitable and cost-effective for implementing change or transition than management consultants,” by a ratio of 5.5:1 (up from 3.5:1 in 2000). This then is the third, new application area for interims. They are no longer viewed as a distress purchase of last resort but rather as a valuable new resourcing option for accelerating the rate of change. The interim executive is selected to champion the change process and to focus single-mindedly on delivery.
Relative features and benefits
The table overleaf compares the attributes of management consultancy and interim management. The services offered by interim executives differ greatly from those offered by management consultants, both in terms of style and content. If the client is looking only for analysis and ideas, then consultants will provide this.
If, on the other hand, the client is seeking a practitioner to “make it happen,” winning over the hearts and minds of the staff, then an interim could well be more appropriate. Often a combination of the two services provides the ideal solution, with the interim acting as the client’s representative to ensure total objectivity.
The comparatively small number of senior interim executives is not going to replace the vast numbers of management consultants, but there is no doubt that interims are displacing consultants in their key markets. Interim executives offer clients a “fast-track” method for achieving real and sustainable change based on hands-on experience. Results are achieved quickly at a fraction of the cost. Says Sean Egan, CEO of Bluecycle.com: “With an interim, you get what you pay for – with a consultant, you often buy from the expert and get the trainee doing the job.”
Conclusion
The future for interim management looks very exciting. There is a growing awareness that interims can be used for far more than just plugging a gap in an organisation while recruitment proceeds. Clients are beginning to realise that it is possible to hire a “dream candidate” for a few months on highly competitive terms in order to manage a programme of transition or to accelerate change.
Clients must select their interim provider very carefully. A specialist provider should hand-pick the right interim executive who can deliver more than the basic brief. The client should benefit from a significant reduction of risk coupled with great upside potential. There has never been a better pool of interim talent available in the UK. As Ian McKinnon, chief executive of Luxfer Group, says: We have just put an interim executive into one of our acquired businesses, which means we will have a heavyweight, hands-on manager on site. This is one of the advantages of interims. You get the benefit of an outsider with a lot of experience of handling change, at a cost which is roughly half that of a management consultant.”
“With an interim, you get what you pay for – with a consultant, you often buy from the expertand get the trainee doing the job”
To discuss your interim management requirements with BIE call +44(0)20 7222 1010