Crisis Managing Interim Managers Today – Managerial Key Competency Tomorrow

Our interim managers were used as project or gap managers 10-15 years ago. As the economic processes are globally changing at an accelerating pace, our interims have been asked to manage and eliminate the ongoing regional crisis for the past 3-4 years.
Often, several interim managers work together to manage crises successfully, said HR Portal, Györgyi Kristóf, interim management specialist and Hungarian Managing Director of Hammel & Hochreiter.

The time has passed when only a deputy or support was needed at top management level. Substantial changes must be implemented with an ongoing reconsideration, redesign of processes through operational management. We have come to the point where production and service companies are also asking for help to meet their need for security in the Maslow sense. In other words, to maintain their continuous sales. An enterprise also needs to belong somewhere: to its investors, its clients and its employees at the same time. Moreover, it can only bind them if it gains and maintains their trust. These needs, which are just above the level of subsistence, are now mostly coming from manufacturing companies. They are lacking dedicated and talented manual and intellectual professionals and are at the same time in need to adapt to market changes. For most of the production companies, the processes are out of date and it limits creative work. If an enterprise is unable to innovate, apply a new approach, its hard-working employees will leave because they want to find a solution to their own recognition and self-realization needs. Interim managers, among other things, help to solve such complex situations – Györgyi Kristóf outlines the current challenges.  If you are interested in how the interim service has evolved over the past 15 years, we recommend the following 3 paragraphs. For those, who are only interested in the challenges and offers of the present, we suggest continuing with the article below.

Interim Manager: A manager for a single task for a definite period of time.

Interim Management: Availability of an experienced senior manager with sufficient professional knowledge for a definite period of time to counter a planned or sudden deficiency in a permanent job or achieve a specific business result within a defined period of time.

Over the past fifteen years, at least four major trends were influencing interim management service in Hungary. The initial period between 2003 and 2008 coincides with the rise of North American companies, mainly using interim managers in the vehicle and pharmaceutical industries. Whether it was a globally recognized brand, a stock exchange or a non-listed company, the basic requirement was always to have a CFO, as a good financial leader in everything. At that time, companies were looking for experts who understood the world of finance, taxation and reporting / controlling and were able to negotiate not only in Hungarian but also in one or two foreign languages. Mostly young leaders could fulfill these expectations, who then worked and performed on an exceptionally high level for 1-3 years.

At that time managers’ IQ was a very high importance to find answers to problems. The demand for companies with well-established brands and the supply of economic interim leaders on the top of Maslow’s hierarchy of needs was so ideally linked to each other as the two sides of a zipper.

The era of the global financial crisis and the recovery period brought a new phase in interim management between 2008 and 2011. Although crisis was followed by crisis that had to be dealt with on a day-to-day basis, many redundancies did not spare the dedicated, experienced staff. The need for self-actualization – in the case of companies and some individuals too – was replaced by the maintenance of subsistence and security. They were looking for new roads, made a U-turn, and their reserves were reducing. In retrospect, one might think that this was a real possibility for interims; but no, the expansion did not happen. First of all, the interims had to be good in decline management and survive in a tight economic space. Many high-level professionals and managers ended up on the streets and as a result the labor market situation also changed. There was an over-supply of managers. Demand for interim services has also been restructured. Newly emerging Austrian, German and Swiss companies as potential clients have brought a different company culture compared to the Americans, and they were looking for quality and crisis managers mainly for their manufacturing companies. They thought there were many managers they could select from, even though the available number of German-speaking, quality-oriented assurance managers was also not very high at the time.

Between 2011 and 2014, many executives left their executive position at mid- and senior level. The reasons were wide ranging from burnout due to the tensed performance constraint of previous years to the desire to change lifestyle. By that time, the managers got to the level where they had a relative existential security, and they had the need to belong to somewhere. However, there was a slight shift: The need to strengthen relations in their private lives overtook the desire to belong to the company. They wanted a different kind of challenge, a different quality of recognition.

In addition to the psychological, cognitive needs were also at the forefront and turned to self-actualization. Many people wanted to try their skills in other professional areas, learning additional or new things. They are the ones who have become really good candidates for interim positions in the coming years.

Györgyi Kristóf

When the boundaries of old framework must be stretched

Since 2014, growth has been steady and strong. However, we can say that there is still a lack of capacity in many ways. Interim service needs come primarily from European-owned companies today. As far as Hungarian companies, the lucky ones are those, which receive interim management as part of their financial institution financing portfolio. We have already mentioned before that current needs are primarily at the operational level. Companies mostly require production, logistics, maintenance, quality interim managers in many fields, and instead of leading financial managers, they rather need controlling or planning professionals. They are the ones who can recreate the processes from a fresh perspective and as active part of the organization together with their team will produce the expected results. This is especially important for a sudden start-up organization, where complexity is rapidly increasing, and stretching the boundaries of the old framework. Therefore, at an operational level, companies need such talented staff and managers who do not let the routines of old processes paralyze them.

Traps that should be avoided

Györgyi Kristóf draws attention to two extremes. One interesting issue is that American companies are not so much after leaders, but specialists or generalists. In contrast, Hungarian companies are looking for executive interims alongside the active owner. Typically, the latter are companies that have grown from family businesses, where the change of generation is not smooth or not even concluded. They are characterized by crisis management everywhere. These companies are experiencing an ongoing crisis as a result of an increase in orders and a lack of capacity. Enormous investments are taking place all over the country because financial capital is now abundant. However, managing human capital does not receive the required attention, even though committed, powerful, talented, creative human capital is currently the scarcest resource. Production, mainly due to incomplete or poor human resource management, cannot follow the growth of orders fast enough.

In our practice, it has been the case several times that the foundation stone of a plant has hardly been laid down, the company had to deliver at the same time – says the managing director of the interim service company. Thus, if growth continues, the demand for interim managers will increase, which in turn will lead to dilution of the system. Nowadays, even those managers call themselves interim manager who have no real experience in this field. Nobody will become interim manager just because he left a job and have free capacity. It might be that someone took on an assignment, which he/she would have managed to do as an employee. However, as a new interim manager outside of the corporate hierarchy, he/she might not overcome the task successfully.

The trap situation for the interim manager himself and for the company that entrusts him with the task is that he must work as an interim to serve the interests of the whole company, it is not enough to make his own organizational unit successful.

Let’s turn our point of view! According to the interim management specialist, there are also cases when companies require only one person to solve complex tasks, although the work to be done is at least for four people. Moreover, it requires several specialties at once. Another common trap situation is when a successful production company’s well-performing production manager is appointed as the No. 1 leader of a greenfield investment. Promotion – although it meets the need for status and recognition for a specialist – puts a double burden on the individual, and in fact the need for self-realization can be damaged if he doesn’t get the proper help from the parent company. The specialist who is likely to be excellent in his field but does not have any experience in running a production project or as a senior manager, is in fact not suitable for running a green field project without a project start-up support team that can come from the parent company or from an external company as well. It is very difficult to recognize this both from the perspective of the individual and also from the perspective of the company. Such a situation can easily lead to a crisis, and the need for market recognition by the company can also be damaged by the fact that it also suffers severe financial losses due to the lower volume of production.

Györgyi Kristóf said that as an interim service provider, they discover these traps for their clients, fortunately, most of them can look at their own situation from a fresh perspective and boost their cooperation with the interim and with their own organization. A company’s actual values are shown by who gets rewarded, promoted, or let go. The three main components of human capital are time, talent, and energy – we can also call it enthusiasm or commitment – we need these to perform our tasks. Interim managers can change their perspective and, if necessary, use their practical knowledge of former situation. They can eliminate unnecessary processes within the company. They’re a bit like doctors in emergency. They have seen enough cases to know what works and what does not.

The competences of present interim managers are the core competences of future managers

Regardless of the shortage of workforce, it is rarely the case that our client asks us to deal with the HR area first. One of the rarest demands is the need of an interim HR manager with a sufficient number of well-trained HR staff. HR, or in other words the human capital area, is still not in focus in many places, but everyone is wondering why fluctuation is increasing, why people are missing, why the jobs are not trendy enough. However, according to Györgyi Kristóf’s experience: Even though there is no doubt about the lack of people in certain jobs, in reality there are problems with work organization and the actual use of working time in many companies. One very good example is the case of a calendar fully packed with meetings. In many companies HR works badly or there is no training, selection is done wrong or outdated. According to Maslow’s hierarchy of needs for companies, a high proportion of fluctuation may mean that these companies are performing poorly at the level of belongingness needs, which may also be due to one or more weak middle or top managers in the organization.

All of these are the core causes of staff shortages that could easily be managed by proper management competencies. Györgyi Kristóf said that, in their projects, they always try to support HR, and to strengthen the competencies of existing leaders, in order that these managers have empty spots on their calendars, to have time to just sit and think or talk to their own subordinates. We also direct managers’ attention onto the fact that it is not enough to attract workforce, but it is the common task of strategy, HR and marketing to recruit the right workforce. In addition to that it is the common task of every department to keep this workforce in the long run by creating an inspiring, balanced workplace atmosphere. Of course, no employer can be expected today to employ someone in the same job until retirement.

However, it is feasible for a company to keep the talented and important staff if from time to time we entrust them with other, but professionally ambitious tasks. In other words, we offer them a job tour. Thus, business needs and the individual expectation can meet again and fit into each other as a zipper’s teeth.

“Today, the competence of the interim managers should be the core competence of the future manager, similarly to smartphones. First it was the privilege of top managers, while today it is almost a necessity for everyone, an integral part of our lives. Likewise, everyone needs change management competencies today. Interim managers are generally professionals who love intensive days, manage and solve crises and changes, they love to create new processes and perform tasks that are considered to be unsolvable within the organization. It is their success if they can overcome themselves and help others in self-realization.

A talented manager needs one to one and a half years to become a skilled interim. Our interim candidates are trained in a variety of forms, they get on-the-job support, and once they become part of the system, they can take this job on a lifestyle basis. For many, this is a career change tool, perhaps new areas or greater freedom. At the same time, there are three + 1 top-notch aspects that should definitely be considered if someone wants to choose this direction, says Györgyi Kristóf. These are company culture, industry, flexibility and location. To change culture and company size is the hardest. Other competencies may be required for American, Asian or other European corporate cultures. From an industry point of view, it is worth considering that sometimes the tasks relevant to a specific industry may not be relevant to another one and the specific knowledge of managers may not be utilizable. If their experience is not sufficiently wide-ranging, then without further training their options may be narrower or limited in time. Flexibility also matters because sometimes a family cannot reconcile when one member does not work in a secure “employee” position and instead becomes a freelancer. It may seem strange to the family that an interim does not always work 12 months a year and occasionally must train himself between his projects. The location includes Hungary as a whole, but it can be even farther. It is still very difficult for the novice interim managers to work in the countryside for 5 days a week. Therefore, it is worthwhile to make a conscious career change towards interim management, because you must be prepared for it thoroughly. In addition to qualifications and experience, the individual’s life situation and the personality are crucial aspects of the ability to take on this special lifestyle, the rhythm of interim life.

“Let me bring a 50-year-old story here: When Apollo-12 was launched in stormy weather in Houston as part of the American Moon program, one minute after the launch, lightning struck the missiles twice. All existing instruments both in the rocket and on the ground showed pointless signals, due to emergency the mission was almost interrupted. One of the ground flight controllers then remembered that he had seen such a phenomenon in a test at the Florida Space Center before and told the astronauts “Try SCE to AUX.” Even the rocket commander said, “what the hell,” but the other astronaut seemed to remember what it might be and found the AUX switch among the 300 switches in front of him. As soon as the instruments were connected to AUX, the backup power source, the instrument data was immediately restored.

It should be noticed that they didn’t ask each other why they should do this, whether it would be good to call the President to contribute, but everyone did it because they knew they were prepared for such situations too! “

Interim managers also represent this “power supply” for corporate services and work in a similar mode and temperature on a project as in the previous example. So, everybody who is interested in corporate rocket science, should try themselves as interim managers. For those who have similar tasks to rocket science, should try the interim management service.

Source: HRportál

Translated from Hungarian