Smart Answers March 9, 2010, 11:11AM EST

Not a Consultant, an Interim Executive

Interim executives fill managerial roles. To get the most out of them, companies must find the right match and acknowledge internal problems

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When 35-year-old Tone Software recently acquired a competitor, it had one of those "good problems" in business—a flood of global interest in its software programs, which underpin communications and network infrastructure. "We didn't know how to handle the influx and how to take advantage of it" with current sales staff, says Shirley Balarezo, who was promoted to president 18 months ago after 13 years at the 50-employee Anaheim (Calif.)-based company.

Balarezo contemplated hiring a sales consultant to help her staff put together a global sales message. Then she attended a regional technology workshop hosted last September by Irvine (Calif.)-based Cerius Interim Executive Solutions.

She was persuaded to bring on one of Cerius' interim executives to act as vice-president of sales at Tone Software. Alhough the cost was high—$1,500 a day—gaining an outsider's perspective has been invaluable, Balarezo says. "He is a very experienced sales executive who has no biases about our company or product, no favorites, and no political gamesmanship. He's able to just give pure, top-notch strategic advice on how to sell our products."

Unlike consultants, interim executives work within a company, filling a position that has gone vacant due to an employee leaving, dying, or being dismissed. They can fulfill as many as three functions: Stepping into a job that needs doing, helping to interview and choose a permanent replacement, and diagnosing and implementing important internal changes.

"an inherently stressful environment"

James Phelps, who offers interim executive services through his Minneapolis-based SeaChange Consulting, says small- and medium-size businesses get the most out of the arrangement when they are open to all three. "They get the biggest benefit if they look at it as an opportunity to not just bring in a caretaker but also to solve nagging, inherent problems they have faced over the years," he says.

It takes a certain kind of interim to listen effectively, quickly diagnose problems, and implement solutions, as well as an entrepreneur who is particularly open to suggestions to make the liaison work. "You're going into an inherently stressful environment when a position is vacant. If you present yourself as an industry expert who knows it all, that could be problematic," Phelps says. "The management staff is typically already apprehensive and they may resist even great ideas."

That kind of resistance—particularly to an outsider who's brought in to shake things up—can doom the potential of an interim executive's stint, which typically lasts six to nine months. "It's generally a good idea to bring in an interim executive because it can solve a lot of problems that small and midsized businesses have, but most companies are not equipped to use them appropriately," says Kerry Brock, a retired serial entrepreneur and principal at Brock International in Santa Fe, N.M. He has been an interim executive and now consults with and serves on advisory boards for small businesses.

The barriers often hinge on a lack of trust that CEOs of small, privately-owned companies have in outsiders, as well as the chief executives' inability to admit they need help. "There may be lots of good reasons for that mistrust because the entrepreneur typically has fought very hard to get where they are and they've been misused by people along the way. But it makes it difficult to allow an unknown top-level person to enter and change things," Brock says.

Less-expensive, but is the fit right?

Another bump in the road is cost. Cerius quotes a $1,200-to-$2,000 daily rate for its interims, who typically work part-time from home after an initial stint on-site.