When to call on an interim CEO?
The interim CEO is a professional who advises , structures and organizes a transition plan towards the continuity of a company’s strategic development.
When the management of a company is vacant, the interim CEO may be required to temporarily take control of the company to allow it to continue or be taken over on a sound basis. It must then guarantee effective and rigorous management, oriented towards results.
A company may have to resort to an Interim Manager when it finds itself in a situation of change. This change can be strategic or organizational.
In the event of a change of substance
When a company is faced with profound and definitive upheavals – a merger, a takeover, a restructuring… , the use of an interim CEO is a good option to provide general management during the preparation period and the transitional phase following the implementation of the new policies.
When the company carries out a sale or merger, for example, calling on a transitional CEO allows the CEO to be taken over by one of the members of the company, or by a newcomer.
A transition CEO must be able to ensure the transition towards the continuity of a company until its buyer, while guaranteeing the sustainability of the company’s activities.
The objective of the Interim Manager occupying the position of CEO will then be to ensure the management in the best conditions, ensuring the continuity of the company “without a hitch”.
General management can also be entrusted to a transitional CEO if the changes are less radical, for example when new shareholders come to take an interest in a company, or when the company finds itself confronted with new regulations, a new market, etc.
To achieve a change in governance
The function of CEO is sometimes entrusted to an Interim Manager when the general management of a company wishes to change its mode of governance to move closer to a more participative management. The Interim Manager then makes it possible to form the new management committee.
The interim CEO sometimes takes control of the company , following the departure of the manager or his withdrawal. He must then ensure the continuity of activities and organize the restarting of a company.
What is the scope of activity for an interim CEO?
The interim CEO can intervene in all areas of the company’s activity , from operational activities to new strategic orientations.
An Interim Manager is most often used in the following situations:
- When a company in difficulty is looking for a buyer, the use of an interim manager can be strategic: he ensures the operational management of the company but can also take on an advisory role.
- Recovery of a business; the Transition Manager can again support and advise the management team to help them make the most strategic decision
- Reconciliation of companies, merger of the activities of several companies; To prepare the overall management of the two entities, interim management can be effective.
- Change of general management: an interim CEO can have a real added value in helping the members of the new executive committee to adapt to their new responsibilities.
If the construction sector calls on Interim Managers to ensure the management of teams over given periods, this sector is far from being exhaustive. Service sectors also make regular use of interim CEOs.
What is the profile of an interim CEO?
The position of interim CEO requires very versatile specialists who must provide advice, knowledge and operational management for the company.
It is a high-risk function because the interim CEO is sometimes in charge of an extremely fragile situation.
The Interim Manager must therefore be endowed with cross-functional skills, both on a strictly professional level and on a personal level.
- A solid experience of crisis management is often essential.
- A deep understanding of the market and the risks involved allows the transition CEO to be operational quickly and get to the point.
- Similarly, a sharp analytical mind allowing him to take stock of the issues and quickly identify essential information is a valuable asset in this type of position.
- The Transition Manager must be able to make strategic decisions quickly.
- He must have natural leadership and an excellent ability to communicate with company members and external partners.
- The interim CEO is often required to structure and organize departure plans. Perfect knowledge of human resources but also a deep respect for ethical and social rules are then necessary.
An interim management firm, such as Reactive Executive, ensures that client companies are in contact with qualified, experienced professionals whose personal skills are in line with the company’s values.
How much does an interim CEO cost?
The cost of a transitional CEO depends on several factors. It is primarily a function of the time spent on the job. The average rate for a transitional CEO is 6,500 euros per day . But it can reach up to 9,000 euros for companies that need an experienced manager. This rate also varies depending on the experience of the transitioning CEO and the size of the transition.
The remuneration of an interim CEO is equivalent to that of an executive. It depends on the size of the company and can reach up to 500,000 euros.
The salaries of transitional CEOs
The remuneration of an interim CEO depends on a number of factors such as the size of the company, the directives of the executive committee and the level of experience. However, the remuneration of an interim CEO is on average 30,000 euros per month for an experienced leader and 25,000 euros per month for a younger person. The remuneration of a transition CEO can reach up to 500,000 euros per year.
The bonuses of a transitional CEO
The bonuses are generally variable and dependent on the private contract of the transition CEO. The bonuses can vary between 10% and 50% of the fixed salary. The bonuses of a transition CEO can reach up to 100,000 euros per year.