When do interim and part-time executives make sense?

February 15, 2010 by Anonymous

by Mike Travis

Interim and part-time executives are excellent solutions for companies that face specific management challenges. When does it make sense to use them? Following is an overview, along several real world examples.

Interim executives

Interim executives serve on a temporary basis. Sometimes they act as caretakers while a permanent person is recruited; other times they are hired to address specific issues, after which a permanent manager can take over.

Javier Jimenez is a partner at Tatum, the financial consulting and management firm. He recently completed an engagement during which he served as interim CFO at a Vermont not-for-profit with global operations. He kept financial operations running during the search for a new CFO and helped the new hire make a smooth transition.

“There are three main advantages to having an interim CFO” says Jimenez. “First is risk mitigation. A lot can go wrong if no one is in charge, so it’s useful to have an interim person looking after things like audit, loan covenants and cash flow. Second is providing day-to-day leadership, which keeps things moving and helps mid-level managers who might otherwise become overwhelmed. Running the group enables the interim CFO to make an objective assessment of the finance group for management. Third, an interim CFO can help smooth the path for the permanent CFO and ensure a successful transition.”

There is a need for interim CEOs, too. At established companies, interim CEOs can steer the ship after an unexpected departure. When Avid Technology (NSDQ:AVID) lost its CEO in 2005, a board member stepped in while the company recruited a replacement.

Start-ups have more varied reasons for using interim CEOs. Desmond Pieri has been interim CEO at many start-ups in industries ranging from medical devices to software. He writes on his experiences as an interim CEO at his blog, ChangeAgent.

Pieri says start-ups face four types of situations where interim CEOs make sense:

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