Executive Interim – The Key Action Steps They Always Follow

Executive Interim

The effective executive interim will need to control many critical activities in order too stem the “cash bleeds” and restore the business to financial health.

executive interimThere are several key actions that require the executive interim to take personal control of critical business functions. This means that often even entire business units are brought under the executive interim’s control in order to diagnose and implement the steps necessary for a quick turnaround.

Strict controls will be placed on operating expenses. Approved capital spending that is underway may be canceled unless it has been re-approved by the executive interim.

In larger companies, the executive interim will likely even go o far as to sign purchase orders with dollar values over a specific limit. In smaller companies, the executive interim will probably approve all of them. The executive interim will install quick audit protocols to make sure that the approval controls are working.

I all likelihood, wages and salaries will be frozen at current levels or even reduced by a specific percent across the board. All hiring of new or even replacement employees will be frozen or curtailed to critical positions only that will likely also require the approval of the executive interim.

The executive interim needs a lot accurate information and need to get it quickly … and “directly” … so there will be many meetings with personnel at all levels and departments. Expect these meetings to start at breakfast time and end well into the evening.

There won’t be any days off until the crisis has passed. There can be church time on Sunday, but it’s likely that management and staff will be expected to work on many Sundays as well. The executive interim will need to get involved in nearly everything in order to scope-out the magnitude of the problem. He / she will not have much respect for “typical” management protocols such as respecting lines of authority, etc. when information is needed. Why?

The Executive Interim

“Because the executive interim essentially needs to diagnose the roots of the problems that created the crisis …. and this does involve identifying the people who have helped of the need to develop useful information, the need to communicate change, and the need to rebuild the organization.”

Certainly, there will be modifications to both the organization’s structure and business processes. However, because the executive interim first centralizes all key management process, the executive interim thus maintains his / her options. This prevents the need to make organizational changes prematurely and then modify them later as new information is uncovered.

executive interimThe first result of centralizing management process without also changing the organization chart and reporting relationships will probably be a disorganized mess … this simply can’t be avoided … remember, the business is “wounded” and in crisis mode.

Eventually, reporting relationships will certainly be changed once problems in both people and processes have been identified and solutions are ready to be implemented.

This management turnaround process will create additional stress for an already emotionally charged company, but the executive interim must persevere and only modify this style when he/she obtains the needed information and re-crafts the organization that is now aligned with the turnaround solutions.

Here Are A Few Key Actions An Executive Interim Will Likely Take:

Terminate all temporary employees and require executive interim approval for any temporary help retentions that are in critical revenue generation positions. help be terminated immediately and redeploy existing staff to fill gaps

The Executive Interim must control cash outflows …. period! Thus all actions to recruitment new employees require approval. Typically, there is a hiring freeze while all open positions are analyzed and re-authorized.

Approve all capital expenditures that are over a specific dollar amount.

 

Examine all inventory levels and eliminate overstock, outdated and redundant inventories. Such inventory is a good source of cash … even turning it into cash at distressed prices is better than letting it collect dust in the warehouse.

Regarding office equipment …. no new purchases during initial diagnostic phase … make due for a few weeks.

 

Expense accounts must be examined to make sure that they are in line with the “new reality” and people who travel and entertain on the company’s behalf are doing it frugally.

Fire marginal performers and problem employees who eat-up management time … every organization has them!

 

Promptly create and deploy a “new business plan” that is challenging .. yet attainable. People will crave vision, direction and hope … they want to believe as their livelihoods depend on success.

Meet with major customers, critical vendors,major investors and bankers … let them know what is happening and what you are doing. They will want to see confident decisive leadership and it is in “their” best interest that you succeed … they will give you time and patience if you keep communications open, honest and demonstrate a sound plan of action.

Examine the sales pipeline and see if any big potential orders are close. Nothing creates more excitement and support than landing a big order.

Cut special deals if necessary … but don’t reduce prices so much that you give away all of your profits in order to get bragging rights.

 

Keep your employees up to date with regular (weekly) status meetings … you will keep the “rumor mill” at manageable levels!

 

In essence, take full charge, make the hard decisions, keep things moving while you listen and lead.

Remember, the Executive Interim is the best hope for the organization and every employees’ and vendor’s families are going to be effected on how well he / she does the job.