Why interim executives are in hot demand amongst US firms
Paul Smith, managing partner of Odgers Interim US discusses the interim executive market in America and explains why firms are increasingly attracted to highly-experienced agile talent
In the US, the average time it takes to search for and hire a c-suite executive is three months. Historically, this has been a period of time in which most firms could ‘get by’ whilst they waited for the next executive to start. It also meant that the need for interim executives was minimal.
This is no longer the case. With the accelerated pace of business, three months without a senior leader has significant ramifications for the bottom line. In that time, a competitor could launch a new product, new business opportunities could be missed, and organisation moral is likely to slump – especially if the business is waiting on a new CEO. It’s meant that the traditional interim function roles so common in the UK, are now also growing amongst US firms.
The accelerated pace of business is not just influencing traditional roles, it is altering the constitution of the entire workforce. Intuit, an American financial software company, expects 40% of the US workforce will be made up of contingent workers by the end of 2020. In fact, the preference for talent that can be parachuted into an organisation on-demand led Deloitte to name “managing beyond the enterprise” as one of the biggest human capital trends in 2018. Microsoft, for example, has two-thirds as many contractors as employees.
This trend is being driven by the sheer knowledge that it is more effective to achieve business outcomes with an agile workforce. That is, a workforce that is comprised of full-time and part time employees and teams working alongside flex-time talent, free agents, and contract workers engaged on a project basis.
This last aspect of the agile workforce is the most relevant to the interim market in the US. The need for specific skillsets to manage ‘transformational change’ is growing at an unprecedented rate; a trend that is being driven, primarily, by the fact that business transformation is no longer seen as a one off-event, but as a continuous cycle that needs to be maintained in order to ensure competitive advantage. It means that organisations are almost always on the hunt for transformation project managers and strategic transformation consultants – roles that need subject-matter leaders on a short-term basis.
Continuous transformation is becoming so advantageous in the US that firms are blending the traditional interim function role with that of the transformation project leader to create business ‘change agents’ that are hired specifically to identify problems and develop more efficient methods of working; providing a blend of strategic direction and hands-on implementation.
Four markets in particular are showing heightened demand for interim executives. In financial services, the growth of digital consumer finance products is driving demand amongst incumbent firms for interim CPOs that can expand and enhance digital banking product portfolios. In healthcare, interim CIOs are playing a similar role – enhancing a patient’s ‘digital journey’ so that they are treated as customers rather than just someone with an illness. In private equity, interim CIOs are being called upon to provide digital due diligence pre-deal to affectively assess the digital capabilities of target businesses before they are purchased. Similarly, the technology industry is rife with M&A activity with firms looking for senior IT transformation programme directors that can ‘carve-out’ product lines for sale both in the US and internationally.
In the UK, the interim community is well established with a diverse network of highly skilled senior leaders who choose to work on a contractual basis. This has now emerged in the US where a generational shift in attitudes means that fewer and fewer leaders want to stick with one firm their whole career and reach partner or the equivalent. Instead, there is a rapidly growing pool of senior experts who want to deliver work that is fulfilling in and of itself and brings about meaningful change in an organisation. With the demand for interim executives coming from both organisations and the professional workforce, the constitution of senior leadership teams will evolve to become increasingly agile, more project-led and better equipped to meet a faster-paced business environment.
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