Interim Management Is Having Its Moment
I recently had the pleasure of joining Elina Liehu, the founder of Ferovalo, the Finnish interim management platform, in a conversation with the Finnish Venture Capital Association (FVCA).
Ferovalo, a well-known platform, represents over 900 experienced leaders who work in a temporary capacity with both corporates and non-profits.
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Interim Management Is Having Its Moment
I enjoyed the chance to talk with Elina and her team, and bring FVCA members and their executive director Pia Santavirta up to date on the freelance revolution.
I had written a piece in Forbes on the interim industry over a year ago, and the FVCA talk reminded me of the importance of this corner of the freelancing revolution which is both old and new: old, because Roman publicans provided contract management in the construction of public buildings as early as the 3rd century B.C., and new because the emergence of freelance platforms offering interim management uniquely, or by combining the offering of interim management together with freelance independent management consulting by freelance platforms like ExpertPowerhouse in Germany, Talmix in the UK, and Catalant in the US.
Since I had written the earlier article, BTG, an early independent management consulting platform, was bought by Heidrick and Struggles and will expand their services in interim management.
It wouldn’t be far-fetched to assume that other acquisitions are likely as executive recruiting firms recognize the value of their main asset –relationships with clients and talent – and seek to broaden their offerings in areas like interim, leadership education, coaching, and expert networks.
Two recent surveys – one in Europe where interim management is well established, another in the US where interim is a newer offering – have been helpful in understanding where interim management stands currently, and where it seems to be headed.
The View From Europe
Let’s start with the most important facts: while interim management is growing in both Europe and the US, the markets are different.
The European market, surveyed by INIMA, the International Network of Interim Manager Associations found that most European interims are male boomers, in their mid 50’s, and typically full- or part-time interim executives for over seven years.
Ninety percent of European interims work for corporates. The average assignment in Europe is 11 months. Short assignments seem popular in the UK, France, and Poland while longer assignments (often part-time) are ascendant in Italy. Fees ranged from €300 to well above €2000 per day.
The main sales channel in Europe was and continues to be personal networks: 48% of assignments were arranged through established relationships.
Providers – executive recruiters, interim management shops, and freelance platforms – were responsible for 24% of assignments. Management consultants added another 10%.
Although typical interims had 7 years of experience in the craft, the range was quite a bit broader. Almost 20% of interims were new to their role in 2020, while two-thirds had more than 5 years of experience.
Only 14% of European interim managers were women.
Hiring company size varied significantly. Five percent of interims joined organizations – typically startups – with fewer than 10 employees, while 8% were placed in organizations larger than 10,000 people.
The primary functional specialties of European interim managers were general management, including board membership (32%), operations (9%), human resources (9%), and finance (8%), By level, 6% of interims held board roles, 21% were temporary CEOs or equivalent, 29% held other C-suite responsibilities, and 26% were either department or project leads. Overall, more than half the interim manager gigs were in C-level roles.
The largest corporates relying on European interims were equipment manufacturing (11%) and auto (10%).
And, the principal European business challenges leading to interim assignments were changed management (14%), operational transformation (8%), and project management including business development (7%).
Average utilization among interim executives was greatest in Germany (73%) and Switzerland (65%), and least in the UK (45%) and Spain (46%).
Overall, among survey participants, 33% were engaged full-time, 22% were part-time, and 37% were now seeking their next assignment.
Finally, the European market outlook: two-thirds of interim executives anticipate a continuation of current growth trends or stronger growth.
The US Perspective
What does interim management look like in the US? The trends are generally in the same direction. As Cerius pointed out recently, the war for talent has added the interim management space for help on both sides of the ledger: For employers, while pre-recession thinking said, “I must own my employees,” post-recession thinking says, “I just need to rent the expertise I need when I need it.” And, on the talent side, “Year after year, Cerius conducts a survey of independent executives, and the top reason they indicate for choosing their career path is always the desire for more flexibility.”
How is the US different from Europe in interim management? The data aren’t as plentiful, but a recent survey by zippia.com was helpful:
It isn’t much different by age between Europe and US interims. The average employee age for interim executive directors is 52 years.
But gender was a surprising area of difference. Whereas a small minority of European interims are female, in the US more than 50% are women.
The US is also different from Europe in the types of organizations that depend on interims. 60% were corporate vs 90% in Europe.
Also notable is the prominence of the healthcare industry in the US, representing 25% of interim assignments. Other key industries: the non-profit sector (20%) and education (10%). Tech only accounted for 5% of interim engagements.
Four Key Themes are Evident
Adding it all up, four themes seem relevant. The first is the growth of interest in interim leaders, best demonstrated by the high-demand statistics mentioned in this article.
Paul Smith, who leads the interim leadership practice in the US for global talent leader Odgers Berndtson put it this way, “Having worked in the interim executive space in the UK and Europe for 10 years and now the US for the past 2 years, it’s evident that strong, experienced, interim leadership ‘on demand’ is an area of real continuing global growth.”
Second is the rise of the interim executive career; a majority of interim leaders in Europe and in the States say they prefer to remain interims rather than seek a full-time leadership role.
For these leaders, as for successful freelancers in other domains, flexibility and choice are critical values. These are sought-after talents; top interim leaders are by no means “second string.”
A third theme is a broad and widening range of industries and institutions served and professional specialties that are sought on an interim basis.
Fourth, of course, is the increasing number of supply points for engaging interim leaders. Formerly available primarily through networks and executive associations, a growing number of categories offer interim expertise.
Freelance management consulting platforms are increasing their interest in supplying interim leaders and experts for expert networks. So too are executive recruiters who, as I mentioned at the outset, see an important opportunity to provide more services to their clients, and create more sources of opportunity to the talent they represent on both sides of the two-sided marketplace.
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Article Source: Forbes.com