Interim CEO
An interim CEO is a person who is appointed in a temporary capacity by the Board of Directors. The interim CEO needs to assume the role during a transition in time. This could happen due to circumstances such as sudden resignation of the CEO or illness of the current CEO that will last for a relatively long time such as two months. The interim CEO is not officially given the title of the full time CEO. This is because he needs to fill up the position till the current CEO returns back or a new, full time CEO is appointed by the company. The interim CEO is also called the “steady in ship” as he assists in a time of great turmoil.
Normally a company will appoint an interim CEO from within the organization as that person is well aware of the working of the company. This process does not take much time as the company knows him from before. Selecting an interim CEO from outside the company will take too much time. An employee from within the company is well aware of the day to day operations of business.
When the regular CEO will not be able to attend to his services for a month or so then the Board of Directors feel the pressure and to relive this pressure they appoint an interim CEO. The interim CEO may or may not be considered for a permanent position depending on the position of the company and the performance of the interim CEO. However this point should be made clear to the interim CEO at the time of appointment.
In case of choosing the interim CEO from outside the organization, then the appointment could be from several sources such as recruiters, open advertising or a contact of an employee in the organization. There has to be a special selection group in place consisting of the Board of the Directors and the immediate managers who will be working under the interim CEO. The group of managers can conduct the initial interviews and then shortlist the candidates to be again interviewed by the Board of Directors. There could be 3-4 to interviews till the interim CEO is finally selected. The selection process could be difficult or time consuming, especially when the interim CEO had to be selected from outside the organization.
The interim CEO should have more or less the same abilities as that of a regular CEO. In case, he is selected from outside then he should be a fast learner. He should quickly learn how the organization works and then assume the role seamlessly without any hassles. He should quickly team up with his subordinates and learn the day to day operations of the organization quickly. He should get well versed with the many challenges that lie ahead in area of marketing, finance, operations and human resources. In short, he should quickly get in the boots of the regular CEO and begin handling the operations right from the time he is appointed.
We normally observe that even the most established organizations can find themselves in a position where they will need an interim CEO. The immediate function of the interim CEO is to manage the cash flow closely. He should have a look at the company’s financial statements so that he can get an immediate idea about the actual position of the company. Even the day to day liquidity is an important aspect to be considered by the interim CEO. The interim CEO should have the right type of management skills that are required for dealing effectively with a crisis. The interim CEO might not have existing friendships but he must develop them soon within the organization. A good interim CEO will have a specialized crisis management experience so that he can devise solutions for all types of situations. In many situations, the interim CEO may renew the employee expectations to adapt to the new changes in the organization.
Once the organization makes a final decision of hiring an interim CEO, then it will look at the industry experience as the most important factor. Many companies will only consider experience in a similar industry. Most of the companies normally appoint an interim CEO from within the organization. There are directors, managers and officers who are capable of feeling up the temporary position. The interim CEO may bring a fresh perspective in the organization.
The interim CEO concentrates on turnaround efforts for fixing the operational problems such as organizational structure, product costs, budgets and production inefficiencies. In some situations the immediate concern is to maintain the operational and financial integrity of the organization. He may also have to do the negotiations with different parties such as stakeholders, unions, vendors and lenders.
The organization can also hire an interim CEO from a turnaround firm which has individuals dealing in different areas so that the strengths of all the professionals can be maximized. Since it is the business’s survival which is on line it is very important to appoint an interim CEO. It is best to appoint a guy who is a specialist in handling such emergency situations.
The organization should ensure that its interview process for an interim CEO is perfect to assess the qualifications and personal comfort of the candidate. Most importantly, he should able enough to handle successfully the operations of the organization that require attention. Once you have elected an interim CEO, do provide him your full support and don’t let egos clash as the stakes with the new person are too high.