By Jason Atkinson, Managing Director, Russam GMS
Morrisons, the fourth largest grocery retailer in the UK is facing a tricky trading time. Christmas sales were down 3.1% – worse than Tesco and Sainsbury. Its CEO of five years, Dalton Philips is also stepping down so from March the company needs a new CEO to lead the company and turnaround its fortunes.
Despite most people, including Morrison’s new chairman, Andy Higginson thinking that former CEO Dalton Philips was on the right track with his strategy of cutting prices, unfortunately, it came too late. Higginson now says they now need a new CEO – “without L-plates”.
One sensible option for the struggling retailer is to employ an experienced CEO interim manager who can hit the ground running.
Benefits of recruiting an interim CEO
Interim Managers don’t come with L plates – far from it. They are highly skilled and experienced practitioners who can provide a flexible and strategic, high level resource that is cost effective and low risk for businesses. They are also accustomed to being parachuted into companies at a time of change or crisis.
Across industry sectors, the financial services sector is one of the largest employers of interim managers.
Our latest industry snap survey[i] of 12,000 interims showed that finance was the number one sector for interim assignments, representing over 10 per cent of all assignments.
We are also finding that businesses are increasingly hiring interims to provide specialist skills that are absent at senior level or to fill a stop-gap position if someone has departed.
Using an interim as a stop gap measure was a successful strategy recently taken by Thomas Cook who employed Sam Weihagen as interim CEO following the departure of Manny Fontenla-Novoa in 2011. Weihagen ensured he maintained the status quo and it was business as usual whilst the company recruited someone full-time.
In the same way it would make sense for Morrison to hire someone quickly who could continue implementing the strategy that Dalton Philips put in place and assess what is needed in the immediate and longer term too. Highly skilled at assessing situations, an interim will know what is needed and get it done – a strategy which could benefit Morrisons right now.
Interims can be in place very quickly which is vital for companies in competitive markets like retail and financial services.
They also don’t expect ‘golden hellos and goodbyes’; they are focused on getting the job done and delivering results. Often over qualified for the role, they also have their eyes firmly on handover and finishing projects. They are not hired to make friends, but to provide a fresh and impartial perspective, understand quickly what is needed and implement plans that enable companies to develop.
Whilst organisations can expect to pay a premium rate (upwards of £700 a day for an interim CEO), they can be a very cost effective resource, particularly in times of need. With interims, there are no costly pay offs once they have left and no other overheads such as holiday pay, pensions or bonuses to be paid either.
Our snapshot research also highlights that the number one discipline for interims is change and transformation (20%), followed by general management (18%) and finance specialists (18%).
Sometimes interims are also recruited into a permanent role if the board feels they are the right person for the job, making a seamless transition for the company and offering a ‘try-before you buy’ option that can help avoid costly mistakes.
We’ve seeing huge demand for highly skilled senior level interims across the board, especially at senior level due to a skills shortage and interims offer a truly unique and much valued service to organisations, representing the very top of the temporary management food chain.
They are highly skilled with vast amounts of experience and can be hired flexibly for specific periods of time. Most are usually only there for a short period of time and come in, do their job and leave, If Morrisons wants to turn around their fortunes in time for next Christmas an interim CEO could be exactly what they need.
Considerations when recruiting an interim CEO
When deciding to employ an interim CEO, companies need a robust recruitment process. Although interims are seen as a low risk, short term and flexible option, they should still apply the same rigorous recruitment procedures as they would when hiring any senior executive.
Hiring an interim CEO could be a good solution for Morrisons to help get them back on track, but the process needs to be well managed to ensure the assignment is a success for both parties.
The following tips will ensure companies hire the very best:
TOP 10 TIPS ON HIRING AN INTERIM CEO
- Check if you really need an interim manager or whether the skills and knowledge you require already exists within your organisation.
- Have an ideal candidate in mind to ensure you pick the right person for the job.
- Always use a reputable interim provider that can find managers with the right balance of management skills, technical know-how and market knowledge. The IMA (www.interimmanagement.uk.com) is the industry body which sets out the ethical standards for the interim management industry, and its members adhere to a strict code of practice.
- Don’t waste time as the best interim CEOs can get snapped up quickly.
- Remember that interim CEOs can speak openly about changes such as job losses because they don’t have emotional attachments to companies.
- Agree the aims and timescales of the assignment at the outset, so that both parties know their objectives, and then review them as the assignment progresses.
- Ensure the interim CEO understands your needs from the start; once a contract is signed; an interim has five working days to understand the role and requirements.
- Clarify the role of the interim CEO for permanent staff so that they understand the person is being taken on for a defined period of time until they handover the role to someone permanent.
- Don’t make pay comparisons to permanent staff; it is misleading because the interim CEO is chargeable at an inclusive rate and does not enjoy benefits such as pensions or holidays.
- Interim CEOs can work for any size company and may be suitable for an SME that lacks skill in certain areas but is not able to justify employing someone full time.