Founder & Managing Director of BSG & Talent Sequencing, pioneering an engineered approach to talent acquisition, management and optimization
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The talent wars that grew parallel to the pandemic are widespread phenomena experienced across all industries and company ranks. However, while many companies and studies are focused on volume surrounding the Great Resignation, the velocity of C-suite executive movement is a less reviewed, but equally critical component of talent strategy and hiring.
What caused this? Well, in many cases, planning horizons for corporate strategy shrank from the traditional five-year plan to three years, and often down to one, with built-in quarterly pivot and/or reforecasting exercises critical to keeping current with the pulse of faster-changing markets, customer needs, innovation and global competition.
So how did all this impact the C-suite—all those executives who were tasked with being “captains of industry” and stewards of the corporate enterprise? Well, in short, executive tenure has shrunk precipitously. CEO tenure in publicly traded companies has shortened from an average of six years to five from 2013 to 2017 reported the Wall Street Journal. CEO turnover in the first half of 2021 hit a record number according to Heidrick & Struggles. And when the CEO changes, often the new CEO retools the senior leadership team, bringing in their own new crop of leadership to replace the prior team.
And with the pandemic starting in 2020 and continuing to present, an added churn factor arose: a combination of executive burnout and a deepening resolve by many executives to get out of the fast lane and pursue a different life strategy, powered by a renewed belief in YOLO (you only live once … so make it count).
How has industry and the corporation adjusted to all of these tectonic shifts in the executive seismograph? One way is to more actively embrace the role of the “Interim XO.” Whether to gap-fill, force-multiply or bridge, companies have turned to this new category of executive talent that has a different relationship to the company. Top benefits include some of the following:
• Fast start dates.
• No long-term employment contracts.
• Make and/or execute hard decisions the company hasn’t wanted to or been able to under more permanent leadership, either to serve as turn-around leader or high-urgency and high-impact change agent.
As the founder of an executive search firm, I suggest that business leaders considering an interim executive take some time to prepare and consider their needs. Here are some questions and points to consider and digest in rethinking how an interim executive might be able to impact your organization:
Will the executive relocate to company HQ?
In the “pandemified” talent ecosystem, where many companies have been forced to go virtual and are embracing a semi-permanent virtual employee existence, yet another barrier to bringing in interim executive leadership has fallen—executives operating remotely don’t have to relocate as often or take up residence far from their own families.
What should your expectations be surrounding hiring interim executives in today’s market?
It’s typically going to be expensive cash-on-cash. But without the strings or commitments of hiring a permanent executive, the “total cost of ownership” is likely to be dramatically less costly.
Are there other uses for interim executives given the talent crunch? Can they fill holes or bridge gaps not commonly seen as ‘for interim executives’?
With talent as tight as it is, hiring in an interim executive as the bridge can be valuable in order to avoid the equivalent of a “shotgun wedding hire.” Giving the organization time to recruit, assess and compare a slate of potential permanent executives can take four to six months for senior hires. During that period, reducing the opportunity cost created by a headless department, division or organization can make the difference between leapfrogging your competitors or being leaped.
What does the market look like for interim executives—now and coming down the pipe?
The market continues to grow. As executives age, I’ve found they’re often looking for shorter sprints, versus three-to-seven-year marathons. An ability to make an impact in a short period of time has begun to appeal to more and more senior talent as they shift out of 80-hour weeks for years at a time, seeking a better work-life integration.
How should companies look at engaging interim executives? What are the key factors/conditions that are worth noting a possible use case, and what should companies know if they’re going to head down that path?
• Culture and chemistry fit are key. Consider using diagnostics/assessment tools to help in matchmaking not just hard skills and experience, but softer fit areas.
• Be clear on whether this is purely an interim role or an interim role with potential to be a permanent position.
• Know that referencing an interim executive is as crucial as referencing for a permanent hire.
• Think about bolting on an onboarding coach for the new interim executive to help accelerate impact.
• Have a detailed and precise set of expectations for the interim executive—often referred to as a “scorecard”—with SMART (specific, measurable, attainable, reasonable and timebound) goals laid out.
As the Great Resignation and talent wars continue to evolve, the growing importance and opportunities to utilize the benefits of interim executives will be an ongoing presence in a comprehensive talent strategy and acquisition plan. Organizations that will have the most success leveraging this approach will engage interim execs as a solution within their toolbox rather than as a Band-Aid or quick fix. As our collective understanding around executive permanence and contributions, and the timelines that surround them, morph and adjust, so too will the ability of interim executives to truly impact companies in a positive and beneficial way.
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