Questions concerning Interim Management
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Interim management is defined as the temporary assumption of key strategic and operational management tasks due to shortage of resources or a need for specific skills or as a bridge for vacant positions. As external executives, interim managers take over responsibility in line functions or in programs and projects. Their mandates end upon the expiration of the contract or once their tasks have been successfully completed. Most interim managers work independently and are paid according to daily rates.
The strategically planned and needs-based mix of permanent and freelance management resources offers companies in all sectors significant benefits, including gains in flexibility, potential for innovation and improved efficiency. Companies employing interim management as a precise tool for flexible resource planning and company management frequently move a critical step ahead of their competitors. Interim managers compensate for workload spikes and shortages of resources and deliver measurable competitive advantages to their clients through greater flexibility and an influx of external expertise.
While permanent managers generally uphold control and support processes in line management, flexible management resources are primarily employed for projects, programs and additional assignments. These may be tasks in business development, post-merger integration or restructuring as well as change management, process optimization or cost reduction.
As a rule, interim managers are brought in for three reasons:
Workload spikes and additional tasks expand the need for management talent that can be only partially met by the overtime work of the company’s own managers or by consultants or other external service providers. This can lead to an overloading of permanent managers or to transfer losses in the cooperation with external personnel. Moreover, when key subtasks are left undone or control processes are insufficiently managed, companies run the riskthat areas of responsibility and management-to-employee ratios can become too large, possibly leading to leadership deficits or substantial loss of quality and efficiency. The increasing rate of fluctuation in the need for management resources is best addressed by professional interim management.
In a knowledge-based society, specialized knowledge and leadership skills are two of the most important and cost-intensive production factors. Even within highly profitable companies, it would be extremely inefficient to retain redundant management resources or keep specialized professionals at the ready to be brought in when needed. On the contrary, virtually all private businesses are clearly expected by their shareholders to maintain their personnel structure as lean as possible. Apart from this, results-oriented managers would scarcely allow themselves to be ‘parked’ in stand-by positions until a need arises. They would much rather be assigned operational responsibility where they can actively develop as professionals. Under these conditions, when additional talent is needed in the short to medium term, it is unlikely that new managers will be hired to meet these needs. This would require recruitment and selection processes that are made even more intensive in time and cost precisely because of the ongoing shortage of specialized and executive staff. In such situations, the ideal response is to bring in interim managers.
In light of increasingly lean personnel resources optimized for efficiency, company human resource departments are under great pressure to fill vacancies created by the unexpected absence of a manager or the creation of new positions in the shortest possible time. Because of the usually demanding requirements of the position to be filled, complex selection procedures and elaborate assessments are needed. Despite the best efforts of HR departments, hiring processes today can frequently last many months, especially due to the increasingly limited supply of well-qualified candidates for specialized and executive positions. These transitional phases can be efficiently bridged by interim managers. These professionals occupy the position in the short term, see that tasks are carried out without a long adjustment period and ideally support the company in selecting a permanent successor and ensuring a smooth transition process.
Experience and implementation expertise
The extensive experience and high level of practical competence possessed by professional interim managers constitute a significant added value that quickly creates a positive impression among the client company’s managers and employees and facilitates agreement on results to be attained.
Orientation toward goals and results
For professional interim managers, company politics, special interests and individual career expectations play little or no role in their performance. With commitments solely to the contracting client and to attainment of the agreed-upon objectives, they are able to concentrate entirely on the completion of their tasks.
With clear briefings, a precise assignment profile and professional contract management, a mandate can be filled in a very short time and the interim manager can immediately take up the tasks at hand. It takes from two to four weeks on average to commence an interim mandate. Information on our matching process.
Professional interim mandates are based on calculated business cases. Attainment of the agreed-upon target range and KPI increases the likelihood of a high amortization factor. If, in addition to hard targets, calculations include important intangible values such as knowledge transfer or leadership culture, it is clear that most interim mandates, especially those at the first and second executive levels as well as ambitious projects and placements, can be quickly written off.
High level of cost transparency
External management services can be calculated in a straightforward manner. Moreover, all ancillary hiring and salary costs, company car charges, pension contributions and even social security benefits, depending on the contract model, are eliminated.
Interim managers introduce external sectoral, specialized and management-related knowledge into the company organization, enriching it with valuable outside perspectives. Conversely, serious providers prevent from the very outset the divulging of company knowledge by inserting appropriate contractual clauses on confidentiality and data protection.
The areas where interim management can be applied are not restricted to matters of renovation, restructuring and staff reduction. Indeed, crisis management and downsizing have now evolved into a specialty area within the broad range of services. Depending on the economic cycle, most mandates are predominantly centered on establishing, optimizing or bridging.
Above all, interim management is in demand for bridging vacancies, opening new markets, developing or converting business lines and managing complex projects. This can extend to tasks involving company development, digitization of business processes, post-merger integration or restructuring efforts as well as change management, process optimization or cost reduction programs. In addition, companies use interim managers to obtain specific external expertise and access to best practices.
The rapid growth in the share of project business is primarily associated with the demand for experienced project managers - and above all, for program managers. The urgency brought about by digitization and sustainability issues is increasingly responsible for adding projects involving transformation, innovation and turnaround to the agenda.
Interim managers are contracted by midrange companies of all sizes as well as international corporate groups. Contracting companies come from all economic sectors and industries but above all from manufacturing, especially the automotive industry, machinery and plant construction and the electrical industry. Significant growth in demand has been seen in recent years from major utilities, certain trade areas, consumer goods and foodstuffs and from a variety of service industries.
Depending on the breadth and depth of the assignment, interim mandates generally last between nine and sixteen months. In very extensive projects, however, managers may be contracted for over two years. On the other hand, mandates shorter than six months are quite rare. In the C-Level area, mandates extend for at least one year and often for two years to ensure sufficient continuity and a coordinated transition.
Interim management can only be effective where it is actually wanted, provided with a correspondingly clear mandate and supported by the company structure. If interim managers are to be successful in their actions, especially when drastic measures are called for, they must be properly positioned by the client company and its most important decision makers. Clear and timely communication regarding the goals of the assignment as well as the manager’s role and authority are therefore indispensable requirements.
The daily rate depends greatly on the interim manager’s experience and skills and the importance of the tasks assigned to the manager. A key indicator is the executive level. Another relevant aspect is the business area. Likewise, particular experience with the sector or topic results in higher rates. Examples would include experience in the introduction of SAP systems into complex organizations or the implementation of innovative production techniques.
Precision fit and speed are key success factors in finding the right manager for the client’s individual requirements. For this reason, we at taskforce maintain an ongoing investment in the quality of our data and processes. But in making the correct match, it is crucial that we know each of our interim executives personally. There is simply no better basis for the optimal filling of interim mandates.
For their part, inquiring companies can contribute to finding the right match quickly by creating precise profiles of requirements with realistic objectives.
Information on our matching process.
In the first place, interim managers have experienced completely normal managerial careers. This is a must, since many years of management experience are indispensable for this profession. This extensive experiential background and the related sense of having the right pedigree allows other managers to recognize an interim manager as one of their own and is an essential requirement for success. The actual practical skills of managing a business are not studied at universities, business schools or technical colleges and cannot be put to the test virtually.
In addition, this manager type seeks professional independence, motivated by a high degree of commitment, curiosity and ambition as well as a pronounced need for freedom to make decisions. The attraction of entrepreneurial independence is displayed early on in a readiness and flexibility to change positions, locations and companies. It is also shown in the capacity to find one’s way more readily than others amid changing and often conflict-ridden surroundings.
As a leading line and project management company, we rely exclusively on experienced interim executives, selecting them through an intensive multi-stage process .
Book: Das Prinzip Interim
The compendium of professional interim management
In June 2020, the revised new edition of DAS PRINZIP INTERIM – Managementressourcen für die flexible Unternehmensführung was released. Jens Christophers, Kristin Gölkel and Lennart Koch have fully updated the original 2013 volume for inquiring companies as well as interim manager candidates and newcomers to the market. What is professional interim management like today? What is the importance of the interim management specialization in the practice of mandates? How do companies find the right manager for their challenging assignments? What skills and personal qualities do interim managers need to achieve lasting success? How has the market developed and what viewpoints have emerged? Based on their practical knowledge accumulated over many years as interim managers, industry representatives and agents, the authors provide fascinating insights into market development as well as many valuable suggestions for professional practice.READ FURTHER (GERMAN)