Place A Value On Your Time

A myth exists in certain circles about terminology used in business and industry. Some would suggest that the word 'Interim' connotes an individual executive or executive position not possessing full power and authority, or someone who performs merely as a caretaker until a permanent hire can be placed. The term is often used out of context, or considered to be similar to a 'substitute'. Nothing could be further from the truth, and governing boards know this.

The Interim CEO serves at the pleasure and direction of a Board of Directors, in most instances, and has the authority vested in him/her by that Board. Interim CEOs have served in an "Interim" capacity for years, rather than months or weeks, in numerous organizations around the world.

There is an inside secret about retaining an Interim CEO, and it has not escaped the boardroom and the board's fiduciary responsibility.

Our Interim CEOs are seasoned executives able to step in and assess the current situation and perform from Day One. The overall cost of retaining an Interim CEO is far less than that of a permanent hire (i.e.: recruiting fee, hiring bonus, relocation expense, salary, bonus, deferred compensation, stock options, stock appreciation rights, pension plans, health insurance, personal financial accounting, club memberships, outplacement services, and, of course, litigation). Furthermore, the tenure of some Interim CEOs exceeds the average tenure of many permanently hired CEOs, according to industry surveys. It should be noted, however, that if an Interim CEO's services are needed for a short period of time, usually with a 90-day minimum, that is perfectly acceptable. Such an engagement might be for a succession or a roll-up, or for walking a startup through an investment phase.

According to a survey conducted by the outplacement firm Challenger, Gray & Christmas for the 2006 calendar year, 1478 CEO departures occurred during 2006. In those instances where tenure data was released, 28 percent of the CEOs served fewer than three years. The median tenure was 20 percent lower than in 2005. And in a surprising disclosure, for the 13 percent holding the CEO post for under a year, the average stay was less than six months. In 2005, the number of CEO departures totaled more than 1300, according to the survey which is compiled from news stories and publications.

*Booz Allen Hamilton reported that in 2005, more than 15 percent of the CEOs at the world's 2500 largest public companies left office.
*Spencer Stuart reported that 14 percent of the S&P 500 replaced their CEO during 2006.
*One well-known computer company has had five CEOs in six years.

If your organization is looking for leadership, then you should talk with us. Do not be trapped in the "Interim versus Permanent" debate. As you can see from the above-referenced surveys, 'permanent' is anything but.

MM
Interim CEO 24/7

Providing A Creative and Timely Solution

Challenge:   A multi-national CPG company was planning a major intro of a new consumer product. In addition to media, they planned to give live demos in 1,000s of malls across America and Internationally.  They had to be to market by a specific deadline in order to be first. They had a manufacturer lined up to make the unique machinery required and produce millions of their demonstration samples for the malls. The manufacturer had delays and could not produce in time. We had previously done all of the sample work for the client's intro of a major product, so we were recommended. The client called and asked if we could make 3mm+ samples of dirt in approx. 3 months. Not having any idea of what it would require, I of course said YES.

 

Solution/Action:   We met with the client team immediately, gained a detailed understanding of exactly  what they required and the timelines that were critical….We met with our management team and key employees to create  the necessary steps and activities required to achieve the impossible. Very specific assignments were made and buy-in was accomplished. Since we knew that it was impossible for us to physically accomplish the task in our facility, while maintaining our other clients’ business, we did the following:

• Signed a short term lease for another facility, retrofitted it to meet our needs and began production.
• Doubled our number of employees and added a 2^nd shift in both facilities.
• Negotiated contracts with 3 other vendors to make up the shortfall  and provide excess capacity if needed.
• Made arrangements with all suppliers for the necessary materials and set up secondary suppliers ( some materials were a little hard to source: i.e., amalgamated clay and cocoa to “make dirt”, human hair in 3” lengths, dust bunnies. bags to hold exactly .35 grams of “dirt”, etc.
• Set up quality control standards and a schedule of daily checks on our outside partners. The client also checked our quality control and samples daily at 1^st. 
  
• Set up meticulous record keeping and checks and balances  to assure quality and maintenance of schedule by all concerned.
• When problems arose, we immediately solved them with ingenuity. Example: Our “dirt” supplier could not keep up, so we bought clay and cocoa in bulk and made “dirt” to exact specs in 55 gallon drums that we rolled through the warehouse.  

Result:    All schedules were met on time and adhered to the client’s quality standards…This turned out to be the client’s most successful introduction in their history, primarily because they beat the competition to market…Most of the Project Manager’s were promoted. The client was pleased to pay all of our invoices which totaled in excess of $1 million dollars.

BH

Interim CEO 24/7

How IEs Create a Step Change in Performance
 
 
In a recent assignment with multi-billion aerospace manufacturing and repair center, the senior executive team had just received an intriguing presentation and tour from one of the engine suppliers as to their progress in implementing lean manufacturing. The results presented by the contractor were intriguing but represented an opportunity in just one third of the core business base. What the client required was an overarching strategy which fully integrated the entire enterprise, not just the production floor shops. The most important aspect though, is making the strategy actionable and leading the organization through the change. Even in the most challenging operational conditions it is possible to achieve breakthrough results – the key is in transforming the dialogue and relationships within the organization. During the next few weeks, I will list a few examples of how a long term consulting project helped an organization dramatically increase their productivity and their profits.

Here is one of our extended engagements:
A major aerospace repair center had not produced an operating profit in its entire history. In the plant’s best years, it managed to break even and get the product out the door, though the production flow days had grown significantly. Misalignment of resources, poor capacity planning and utilization, ineffective product lifecycle management (including failure to maintain and upgrade the capital equipment), sub-optimized materiel requirements planning and purchasing were just a few of the principal symptoms. The situation was further exacerbated by organizational communication barriers across the enterprise. Over time, these conditions resulted in deteriorating relationships with the primary customers who were becoming increasingly upset with the trend towards rising costs and missed delivery dates.
 
The first step was to craft a vision of the center as a state-of-the-industry standard setter. Seeing through the current conditions to what is possible is the way great companies come into form. To create a sense of ownership of the vision, the next step was to enroll the enterprise from executive management to the newest employee. We opened the organization to listen to all parts of the extended enterprise which included the primary customers, suppliers, original equipment manufacturers, contracted repair companies etc. Our approach to building a great company included creating an internal transformation activity which included staffing from the top companies in America – including those from supporting industries. Key to communicating the vision was unifying the management and labor executives in a one-team partnership.
 
We began the process by assembling an in-house team to develop the contract for the expertise we needed to fully staff the program office and develop the master contract. From there we began the change management process from the board room to the lunch room. Simultaneously we exponentially expanded the number of black belts and green belts on staff through extensive training with one of the principal suppliers well known for its progress in Six Sigma. As all of this was taking place, we began planning the early-win projects and facilities moves which would serve as the indicators to the workforce that change was underway. Mass education of the workforce was led by the production division leadership, further reinforcing that the change was internally, rather than externally driven. As the employees increased their understanding of lean cellular operations, they were eager to contribute to the cell design process, increasing their pride in craftsmanship. We kept the focus on what was going right – and before long, organizational behaviors that had impeded production, quality and profitability began to fall away.
 
Once the Master Transformation Team was in place, the center was ready to accelerate. Production flow days, a key cost and performance measure -- decreased by a third on several major product lines. One product line was so successful, that they were able to transfer the savings generated from improved operations to two additional aircraft scheduled for the following year – essentially repairing the aircraft for free! As progress accelerated in transforming the production processes, the supporting key back shop processes such as finance, materiel planning, inventory management, bill of materials planning and maintenance and engineering data management came under increasing scrutiny – truly giving this an enterprise wide perspective. Ensuring that all levels of the organization were involved in the detail planning was the key to owning the new way of doing business.
 
Confronting the need for massive change in the business can be a daunting task. Choosing the right advisors to help lead the way is fundamental. We help you uncover the operational value that can easily be lost in the clutter of day-to-day operations. In the right hands, a poorly performing company can make the step change to market leader.

EL

Interim CEO 24/7
 

 

Rent vs. Buy...An Executive

It may come as no surprise that renting or leasing is a huge business. When most people think of renting, it is usually in conjunction with primary housing, cars, vacation homes, or tools for those weekend projects. But renting, or leasing, is a very large business worldwide, especially in the commercial and industrial sectors.

An example of equipment leasing might be seen on a commercial building project. A large steel span needs to be erected as part of the building, but the contractor does not have the crane capacity to complete the job. Cherry pickers aren't large enough to do it, so the contractor leases a crane and operator for the day to complete the task. While the lease amount is significant, it pales in comparison to the cost, maintenance, and liability of ownership of the crane and the trained operators.

Another example of leasing is in the commercial real estate market. You may have noticed the number of 'big box' retailers popping up in communities across the land over the past twenty years or so. And you might have imagined the tremendous costs of acquiring the land, performing site studies and environmental assessments, permitting, grading, and finally building the structure itself. How, one might wonder, does the retailer keep prices so low when the costs of the building must run into the millions of dollars/euros? In most instances, the owner sells the building to another entity and leases it back from them, thereby conserving their own capital while being true to their core competencies...in this case, retailing...not real estate.

Executive 'ownership' is being viewed differently these days, also. In the not too distant past, a company might hire an executive with the intent of it being a career-hire. A great deal of training, time, and expense was exhausted by the company, only to see the executive become a 'free agent' after a few years, exiting the company for greener pastures. But in recent years, the landscape has changed, and companies have found that retaining a top-level Interim Executive to prepare the company for a public offering, a merger, to perform a turnaround, or to invigorate the sales team has its benefits.

The definitions have changed, also. Many executives have become 'interim executives' anyway, whether they are employees or not. Consider the average tenure of a top-level executive in a public company today, and you may find that many are in place for three years or less. Add together the retained recruiting expenses, relocation costs, hiring bonuses, deferred compensation and stock options, insurance policies, health benefits, expense accounts, salary and bonuses...whew!...it would have been much less expensive to retain an IE. No lawsuits for early termination or failure to exercise options with the IE, and no bruised egos. When the contract is up, the IE moves to the next engagement.

If you utilize a firm specializing in IEs, you can retain the firm, along with the individual executive(s), and gain the benefit of the sum of experience in that firm.

LP