A company without a CEO can flounder and crash. Companies that lack CEO leadership are like a ship without a rudder. An Interim CEO fills this leadership gap.
An Interim CEO is an individual who is temporarily chosen to act as CEO and fills the gap between a CEO leaving and another being hired. The board of directors or stakeholders are responsible for hiring them.
6 Reasons a CEO Leaves:
- Quit
- Fired
- Death
- Retires with no successor
- Leave of absence
- Sickness
Hiring an Interim CEO is all about time and money. An Interim CEO can be in place in less than a week. This results in business momentum being maintained while searching for a replacement. A search can take 3-9 months.
9 Reasons to Hire an Interim CEO:
- Crisis management
- Direction change needed
- New technology implementation
- Turnaround and restructuring
- Keep up morale among employees
- Pre-or post –merger direction
- Succession planning (especially in family owned businesses)
- Gain “Fresh Eyes” to problems
- Downsizing or upsizing
Examples of an Interim CEO’s Value:
Private Equity and Venture Capital Firms:
- Direction: Company may need a new direction that current management cannot provide.
- Buy or Sale: An interim CEO will scout companies in a particular field for merger or acquisition, stabilize after a sale or ready a company for sale.
- Turnaround, Restructuring or Merging: An Interim CEO provides the unbiased and “Fresh Eyes” to meet plans and schedules.
Family Businesses:
- Succession Planning: Provide guidance and game plan while continuing to provide family with a revenue stream.
- Mentoring and Coaching: Where the owner is older and the next generation is not ready or seasoned, an Interim CEO can direct, nurture, guide, teach and build the next generation team.
- Building Consensus: Family stakeholders have different wants, desires and needs, an Interim CEO provides unbiased, unemotional, objective advice.
Early Stage and Late Stage Startups:
- Manage Growth: Entrepreneurs often hit a wall where they need someone with experience and unique skill sets to grow the business.
- Credibility: An Interim CEO can make a company credible to customers, suppliers and bankers.
- Maximize Value: Entrepreneurs start a company with an idea that often needs an objective and experienced Interim CEO to clarify, execute and monetize the concept.
The reasons to hire an Interim CEO are many and varied. The Interim CEO position offers board of directors and stakeholders a viable alternative to finding the right CEO now.
Can you provide additional examples where Interim CEOs provide value? Can you add other reasons to hire an Interim CEO?
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Avoid painful lessons learned. Let me help solve your business problems. A fresh set of eyes can show you a different set of possibilities. Use my experience to save time and money. I have been there and done that. What makes me highly effective is my fresh viewpoint, unencumbered by company politics or culture.
Valuable advice Larry. Too often we see organizations flounder through a transition period, doing irreparable damage along the way. Planning this strategy with your existing leadership will give the business continuity when the “what if” occurs.
Denny…Thank you for sharing your valuable experience.
Keep in mind that there are many reasons a company would require an Interim CEO, and most are not those motivated by a departing CEO him or herself. One probably immediately thinks that some catastrophe would have befallen a company. And you’d be right, on many levels. Clear transition must be planned. When it’s not, any type or size of organization suffers. Excellent article and thought piece. Is your company prepared?