Interim CEO services are highly coveted in transitionary economies, such as those experienced during the 2008 housing crisis, the COVID-19 recession and the 2023 bank failures.
What works for a chief executive officer under normal circumstances doesn’t cut it when times are especially tough.
That’s why private equity firms, their portcos, and private and public companies often seek a talented temporary chief executive officer to help them overcome challenging situations and not only survive but become even stronger than they went in.
Meet Your Next Interim Executive
“Interim CEOs have had the ability and experience to quickly assess a crisis and determine a course of action quickly,” says Jake Adcock, BluWave’s Service Provider Coverage Manager. “They have been in several turnaround scenarios and understand the importance of speed and definitive action, while long-term CEOs have often grown up in a company and are less likely to assess and act as quickly.”
The Business Builders’ Network is full of individuals born and bred for this.
READ MORE: Benefits of Hiring an Interim CHRO
Interim CEO Definition
An interim CEO, also known as a temporary chief executive officer, is a highly experienced and skilled professional who temporarily assumes a leadership position, typically during times of crisis or transition within an organization. They are responsible for providing strategic guidance and making important decisions to help steer the company through challenging situations.
“The role is to turn strategy into execution. I have a playbook I use because,” says Caleb Morrison, an experienced executive from our interim network. “It’s a structure and a governance process.”
Interim CEO Job Description
The role of an interim CEO requires someone who’s intelligent, experienced, a quick learner, a reader of people, and who’s prepared to turn around what might be a disastrous situation. Responsibilities include:
- Provide senior-level guidance during unexpected vacancies
- Drive significant change during disruptive circumstances
- Manage corporate restructuring, crises and severe cost reductions
- Implement transformation strategies and oversee digital transformation initiatives
- Turn strategic plans into actionable execution
- Lead the company through short window exits and performance drop-offs
- Quickly assimilate information and make decisions from day one
- Address profitability challenges and operational excellence
- Ensure liquidity and manage financial distress
Interim CEO Skills
Nearly every chief executive officer must have some important skills as the leader of an entire organization. Temporary CEOs are no exception; they often need to bring unique services and talents to the table that a long-term leader may not have.
READ MORE: Why Hire an Interim CEO?
Understand Financial Distress
As Adcock mentioned, most CEOs are not used to dealing with disruptive circumstances.
When a company is in financial distress, it needs to change its business model. Michael Pooles*, an interim CEO from the BluWave-grade network, says many companies are not accustomed to doing that.
“They’re used to keeping the dial between nine and 11. But when times are disruptive, where companies come under stress, you need a different kind of leader. Most CEOs don’t have that skill set to drive significant change,” Pooles says. “That’s why you bring in an interim who does.”
Knowing how to deal with supply chain and other commercial-related problems is especially important for a temporary chief executive in challenging economies.
Quickly Assimilate Information
The sooner new leaders can grasp the data available to them, the more quickly they can affect change. Making decisions from day one is paramount in a role that typically lasts less than a year.
“Successful interim CEOs come in with a trust-but-verify mindset. An inquisitiveness,” Morrison says. “If you walk into a CEO chair, you’re not going to get a pass on a lack of knowledge.”
Act with Speed and Certainty
If a portfolio company recently broke covenants with a bank, or if a private- or publicly owned company is going through a crisis, it doesn’t have months or even weeks to “figure things out.”
They need someone who understands their industry, has a deep knowledge of how to confront the organization’s specific challenges, and needs to be able to address them quickly.
The company could have found a long-term replacement if time weren’t of the essence. The CEO role, however, cannot be left open for any significant amount of time. That’s why interim CEOs are expected to act fast and with an assuredness that inspires the rest of the team to follow their turnaround plan.
CASE STUDY: On Short Notice, Interim CEO Turns Around Construction PortCo
Take Responsibility
If a portfolio company, private company, or public company needs an interim chief executive, it’s more often than not because things weren’t going well with the previous leader.
The last thing the organization needs is someone to come in, point fingers and make excuses.
An interim CEO should be mentally prepared to walk into a messy situation and do everything possible to clean it up. If things don’t work out at the end of the engagement, there’s only one person to blame.
“The buck stops with you,” Morrison says.
Evaluate Talent
“You need to be able to lead a varied group of people. Every situation you walk into, you don’t know what you’re getting into in terms of the talent,” Morrison says. “Being able to read people and understand what motivates them and change your approach accordingly is very important.”
What worked at one company, however, may not work at another. Interim leaders who take a cookie-cutter approach are unlikely to be successful.
“I don’t believe in a one size fits all,” he adds. “It’s very rare that every company is going to have the same culture.”
READ MORE: Interim CFO for a Financial Crisis
Problems Interim CEOs Solve
Within the context of these skills, an interim CEO might be asked to solve many specific problems.
Here are just a few of the more common issues we hear about when private equity firms and public and private companies contact us for a temporary executive leader:
Underperforming Business
PE firms want to accelerate their portco’s growth during their hold period. When things aren’t going as well as planned, they sometimes seek a change in leadership to turn things around.
An interim CEO can be the perfect solution to solve the more specific issues that follow.
Leaking Cash
“Leaking cash” means more money is going out than coming in. This could be due to lack of revenue from its products and services, and/or because too much is being spent on things like marketing, salaries and overhead.
At a high level, this can be resolved by reducing costs and increasing revenue. But it’s not as simple as it sounds.
That’s why an interim chief executive officer can be an invaluable resource in this situation.
CASE STUDY: Interim CEO for Manufacturing Company Seeking Permanent Replacement
Leaking Inventory
A leaky supply chain can also be a major downfall for a company. This can happen during packing, shipping as well as in-store handling, depending on the nature of the business.
An experienced temporary executive will know how to root out and address the cause of the shrinkage problem.
Margin Compression
“Margin compression is when input costs rise faster than the sale price of the product,” according to the University of Minnesota. “As a result, margins decline over time. Margin compression commonly occurs in most industries.”
This can happen due to increased competition or decreased demand – both of which drive down prices. It can also occur when the cost of parts and labor increases, thus lessening the organization’s margin on its product or service.
An interim CEO could address this in several ways, including reducing costs, increasing prices or improving operational efficiency.
Crisis or PR Disaster
These situations get a company in the news for all the wrong reasons: product recalls, employee misconduct, fraudulent or illegal activities, natural or environmental disasters and more.
The key is to restore trust and confidence in the company by communicating effectively with employees, customers, and the public. The right leader will also implement specific tactics to prevent similar disasters from reoccurring.
Finding interim executive talent who truly knows how to do the job well can be a time-consuming and expensive process.
When you tap into the invite-only, PE-grade network of exact-fit interim CEOs, you leave all the guesswork behind.
Adcock is in contact with the temporary chief executive officers we provide on a daily basis. That’s why we already know the leader you need before you even contact us.
READ MORE: Private-Equity Grade Interim CFOs
Set up a scoping call with our research and operations team and we’ll provide a short list of perfect-match candidates for you to interview in less than a single business day.
When you need an interim CEO to fill that vacancy “yesterday,” BluWave is ready to help fill the void the the best of the best for your specific industry and situation.
*Privacy is important to us. While the source and company name have been changed, these are real quotations from a real service provider in the BluWave Business Builders’ Network.
