Has your company grown to need additional leadership, yet you’re not sure about, or ready to hire another?

Leadership development and coaching relationships can evolve into additional ways in which we work with a client. Sometimes, it’s an interim executive engagement.

An interim executive temporarily takes a management position in an organization to help the existing leadership solve problems and set the future, permanent leader up for success.

Knowing whether an interim executive is right for your organization depends on your current needs and your assumptions about the future.

We particularly enjoy our interim executive work and thought we’d share more about it. Here’s what you need to know about what an interim executive does and how they might help your company.

Why hire an interim executive?

There are dozens of reasons an organization might choose to hire an interim executive. Here are a few of the most common:

Your cash flow isn’t strong enough to hire a permanent executive. Your profitability isn’t growing as fast as your revenues. Maybe they’re both flat. You can’t afford a full-time, permanent executive right now.
You don’t need a full-time, permanent executive yet. You’re still relatively small. You may need some additional strength or support in an area — just not ready for a permanent or full-time hire.
You want to test out the concept first. You might be ready for a permanent executive. Or maybe not? You want to try growing your leadership team or increase the depth of a certain expertise before you commit.
You need deep experience now, temporarily. You’re in a hole right now that you need to get out of. Or you have a particular goal — like seeking investment — that you need to achieve. That need probably won’t last long-term though.
There’s too much uncertainty to hire someone permanently. You’ve looked at the scenarios and assessed the risks. You’re still too uncertain about your assumptions to feel comfortable making a long-term hire.
You want to focus on other things right now. Maybe you’re ready to hire an exec, but there are bigger ROIs for reinvestment of your time and capital into the business. You want to move quickly, and use the funding for other positions, projects or initiatives.

What kind of interim executive do you need?

Interim executives come with varied skill sets. Some have experience in a wide range of roles. Others are limited to a more specific area of expertise.

You may not know exactly what role you need an interim executive to fill. I’ve seen that frequently with clients. For instance, I’ve had a client tell me that their investors said they needed a “mini me.”

So we had to dive into what that means because the organization only needs one of you. What do your investors think is missing?

Sometimes a client doesn’t know, and we have to start peeling back the layers to see what the investors are concerned about. Are they concerned about a successor? Are they concerned about someone to delegate to? Are they concerned that you have a great vision but aren’t good at operations or integration?

If you’re searching for a less well-defined role (say, just someone to help with higher-level decision making and management), you may not have identified exactly what’s missing. You need an interim executive with leadership and coaching skills to help you figure that out so you can be more intentional about filling the gap.

Of course, there are also times when a leader knows exactly what they need. They’ve been feeling the pain in the same area over and over again. If you’ve identified the gap in your organization that will be filled by a Chief Product Officer or a Chief People Officer, for example, you’re already a step closer to hiring the right interim executive for your needs.

What’s the difference between an interim executive and a fractional executive?

If you’ve been watching the hiring practices of other organizations around you and talking with peers, you may be wondering whether you should be looking for an interim executive or a fractional one?

As the name implies, interim executives generally work with a company for a defined, temporary period of time. They may provide full or part-time services for the length of the arrangement.

In general, an interim executive embeds themself within your organization. They interact with leadership as part of the leadership team, and perhaps might lead part of the company. They have goals and do some of the work hands-on. They also do a lot of advising and coaching. An interim executive conforms to your organization in an effort to get your organization to reach specific goals.

On the other hand, a fractional executive (like a fractional CFO or CTO) is offering you a percentage of their time, perhaps for as long as you want it. They’re building their own business to serve the needs of their clients longer term. They often come with their own systems and structures, their own processes, and perhaps their own team — ones that allow them to work most cost effectively and profitably.

A fractional executive could be working from the inside-out, but most often is what you’d consider “outsourced.” They may not be as integrated as an interim executive, who’s really conforming to be a part of your team.

What happens after you hire an interim executive?

One of the most important steps in ensuring that you have a positive experience with an interim executive is integrating them into your team just like you would a traditional executive. They interact with your organization to the full extent of the role they’re embodying.

If your organization sets goals, the interim executive sets goals. They have accountability to the team. An interim executive can only be successful when the rest of the team treats them like an executive, not like an agent for the CEO.

I was once hired as an interim Chief Strategy Officer. The CEO didn’t do a great job communicating my role within the organization. What did everyone think?

Oh, the consultant is here. Here’s who helps the CEO decide who stays and who doesn’t cut it. People are going to lose their jobs.

The challenge for an interim executive is to earn the trust of the organization. The CEO needs to help with that trust-building process by sending the right message, offering a lot of transparency, and putting in the time to create confidence.

How long does an interim executive stay?

Interim executives often stay a set period of time (the “interim”), though you and the executive can figure out what works best for you and for them. It’s often okay to have an arrangement to play it by ear, as long as you know the desired outcome.

For instance, say you have a six-month contract for an interim COO. At the end of the six-month period, you’ll look at whether the interim executive met their goals. You’ll look at what results the organization experienced. You’ll evaluate how the organization has changed and whether you want to continue with the same level of investment.

You may decide that you’re ready to hire a permanent, full-time person for that role. You may decide that it’s time to go with a long-term, fractional contract. Perhaps you learned that you don’t actually need a COO. Instead, you need a chief people officer and a business development manager.

A good interim executive will help you understand your needs and then help you fill those roles.

The end of an interim executive contract can sometimes be tricky, particularly when the relationship was very successful. You may not want them to leave. Perhaps you’d like them to join your team permanently. That does happen occasionally, though most interim executives move on to other clients.

Easing that transition from an interim executive you love to a new hire depends on being clear up front. You have to go into the arrangement knowing it will end and discussing what the succession plan will be. A good interim executive sets the next person up for success, and maybe even becomes their coach.

Final thoughts

Often, an interim executive joins you at a time when there’s a serious need gap, difficult decisions must be made, and the organization must learn to behave in a different way. A candidate for a traditional new hire position may look at your organization and think, Nope. That’s a mess I don’t want to get involved in.

The interim executive can be the one that fixes up the house, if you will — makes it more attractive to their successor so you can get greater engagement from the kinds of candidates you think you’d like to have on your team long term. And opens up the possibility of hiring a candidate less senior than the interim executive.

If your organization isn’t quite ready for a permanent executive but needs support to make it to that next level, an interim executive may be right for you. At Trajectify, we help companies get their companies to their next level of growth.