Here’s a familiar story of late: A company’s leader has to step down, for any number of reasons, and the board of directors appoints an interim CEO. Recent examples include United Airlines, Dupont, and Twitter—where interim CEO Jack Dorsey recently became CEO.
No, it’s not a typo: An interim CEO is not the same as a CEO, though there are many intersecting skills. An interim executive parachutes in, takes charge, assuages fears and restores confidence, troubleshoots immediate to systemic problems, takes action, and plots direction—fast. When the permanent CEO steps in, he or she will find a plan already in action and a direction set. Done well, it’s a nearly seamless handoff. I’ve done this many times. Often, I have to answer some basic questions about just what an interim CEO is there to do.
Here are four basic functions of an interim CEO. They apply whatever the company—small or large, global or local, whatever the field or product:
1. Hit the ground walking, no matter where. In his book, “In Search of Excellence,” Tom Peters coined the phrase “management by walking around.” Whatever company we join as an interim, we immediately start learning how it functions on all levels. No time to warm that nice office chair; we get out there and make our presence known. We walk around, learn the daily flow, meet employees, and listen to what they have to say. This type of fact-finding is critical to forming personal impressions, and can lead to successful problem solving. When I was looking at Styrotek’s manufacturing challenges, the solution came from spending time out on the floor. Robinson-Nugent’s shipping glitch was solved after joining the shipping team for a day.
2. Know how to solve problems, no matter what field or product. Interim CEOs are fixers, there to manage change. We may not have the specific domain experience, but our experience is applicable across the board. An interim CEO counts on the people making the toasters (or telephones) to know about successful toaster manufacturing; we’re there because we know how to make a company successful. That encompasses critical skills accumulated over years—financial savvy, manufacturing experience, etc. The domain of the interim CEO is focused on business growth, corporate improvement, restructuring, acquisition integration, dealing with Wall Street, ERP installations, and re-aligning strategies and objectives. Not toasters.
3. Make short-term decisions for long-term efficacy. Short term or not, the interim CEO is there to make the same (or more extreme) strategic decisions as a long-term leader. We’re there to take action, not write a nice report, and to leave things in far better shape than we found it. There’s nothing passive about being an interim CEO, and there’s no such thing as an interim action or decision. We’re solving problems that have already hit a critical stage, and everything we do has long-term consequences. Styrotek’s nonstop manufacturing schedule during grape season meant that any breaks for maintenance or repairs were devastating to the bottom line. Production couldn’t slow to train new hires either. I shifted to a 365-day schedule at a lower rate of production, with scheduled maintenance and training programs. Over the long term, the move increased productivity, improved quality, and reduced costs by 20 percent.
4. Always bring your A game. Is this really a function? I’d say yes. Interim CEOs are sharp, seasoned executives focused on speed and execution. There’s no sleeping on this job. We’re not just climbing out of a sales slump, we’re tackling issues of cash flow, payroll, and bank credit that can put a company out of business. At the Association of Interim Executives, applicants have three successful documented interim stints before joining; the industry standard is high. But members have accomplished major corporate turnarounds that save investors millions, spearheaded acquisitions in the billions, launched new divisions, and steered hemorrhaging operations back into black. These are anything but seat warmers. They’re more like superheroes.
These four functions are behaviors really, reflecting high standards of performance. They have to be. As an interim CEO, we’re making strategic, probably hard, decisions to bring profound and necessary change. We listen and learn, then establish assessments and baselines, as well as clear objectives. Then we get everyone on board. If they trust you and respect you, they’ll not only accept your authority, they’ll welcome it, and join the endeavor. Because we all want success.
Richard Lindenmuth has been an interim CEO in a number of industries, with business models ranging from high technology and services to heavy and basic industries. He has 30-plus years of general management experience in domestic and international operations, and is noted for his execution skills in both high-growth and distressed environments. Lindenmuth is chairman of the Association of Interim Executives and author of “The Outside the Box Executive.”
