InterimManagement
09 April 2009
Recession offers hidden opportunities for those with the corporate vision and flexibility to exploit them. And flexibility doesn’t come in any better form than Interim Management, as Deirdre O’Shaughnessy explains...
There is much about this downturn that is different from previous recessions, but available research indicates that the initial response – in HR terms at any rate – shows little change on the retrenchment of old. While there are few hard data available on the reaction from Irish employers, the UK experience is clearly highlighted in a survey by global HR group Randstad, which commissioned Ipsos MORI to canvass the view of HR professionals in 355 British organisations in January of this year.
This survey found that just over half of all respondents have either cut their workforce since last August, or plan to do so in the next six months. Clerical, administrative, and junior staff have borne the brunt of this ‘slash and burn’ strategy – a hardly surprising outcome. What is unexpected, however, is that managers are the second most ‘at risk’ category, with almost half of respondents saying they have either laid off management staff since August or plan to do so in the near future.
This might seem to suggest that recession is a handy medium for addressing human resources issues, but the Randstad survey reveals otherwise.
Nearly two thirds of respondents said their board believes the downturn will have only a moderate impact – if any – on resolving human resources issues; while 55% said they continue to experience skills shortages (despite the worsening jobs climate) and a third expect these to worsen in the next two years. Finally, the three areas of greatest talent shortage identified in the survey are Operations (36%), Managerial (32%), and IT (29%).
These findings clearly suggest that traditional responses to recession will not work this time around. The world has moved on: globalisation, technology, specialisation and the dominance of the services sector have helped create a world in which skill shortages will persist even as companies slash their workforces and unemployment surges. A new set of strategies and instruments will be necessary in order to survive the tough months and years ahead.
One proven solution is interim management. This is better established in the USA and Britain and has been gaining ground in Ireland over the past decade or so.
The conundrum for management, however, is how to square existing or future talent shortages with the very real need to cut costs, yet maintain competitiveness on other fronts. As a number of recent reports from McKinsey and others have shown, recession is no time for organisational stasis: innovation can – and must – continue through hard times in order to fend off immediate survival threats and position the organisation for eventual recovery. Also, M&A activity in a recession does not fall off dramatically; it simply changes emphasis and direction as stronger players use inclement trading conditions to pick off their weaker rivals.
One proven solution is interim management. This is better established in the USA and Britain and has been gaining ground in Ireland over the past decade or so. In essence, it is the leasing of highly skilled and experienced managers on fixed term assignments for specific projects or objectives.
The range of applications is as endless as the (growing) supply of high quality people available: project management in marketing, IT, manufacturing, logistics, and law (to name but a few); compliance and regulatory issues; M&A activity (drafting in specialist expertise to ‘bed down’ new acquisitions); or simply holding the fort during the enforced absence of a key managerial player.
Anyone unfamiliar with interim management might question why an outsider should be brought in at all, given that many roles can – apparently – be filled from internal company resources. But promoting a manager beyond the reach of their qualifications or experience, or assigning strategic projects to team members before they are truly ready for the task, does not mean a vacant role is adequately ‘filled’.
Placing square pegs in round holes is a waste of resources and opportunity and amounts to a false economy that will come back to haunt those responsible.
Another common argument against interim management is that parachuting an outsider into an established team or department is a recipe for friction. This does not take account, however, of the people skills of the average ‘interim’ whose profile is usually that of someone in the mid- to late thirties upwards, on top of their game, and accustomed to operating in unfamiliar environments. A good ‘interim’ is chosen as much for their ability to ‘fit in’ as their more objective attributes of qualifications and experience. The very fact that they work on fixed term placements is a huge plus, as they represent no long term threat to the career hopes of the full-timers, who can then use the ‘interim’s’ presence to learn and develop. (An oft-cited benefit of interim managers is that they leave behind a managerial legacy that will inform and guide their erstwhile colleagues long after the assignment is finished and they’ve moved on).
Finally, a truism of the recruiting industry is that the human response to recession is akin to that of any other emergency, i.e. fear and worry giving way to drastic action in the short term, followed by a gradual calming as the reality sinks in that the world hasn’t stopped turning, we are not all doomed, and that life goes on (albeit at a slightly slower pace than before). Recruiters, even this time around, are banking on an eventual easing of the purse strings and a sudden surge in business as organisations relent and allow the more important positions to be filled.
Those that want to keep their options open, while at the same time maximising the opportunities that even a recession can yield, have the option of interim management as a means to the best of both worlds: accessing scarce talent for innovation and development in the short to medium term, yet without the long term overhead of a permanent hire and its attendant obligations.
From MERC Partners Newsletter, 9 April 2009