Navigating Through Transition: The Power of an Interim Leader

Author: Karma Israelsen, M.A., SHRM-SCP

Introduction: Interim leadership, often a role initially stumbled upon accidentally, can wield significant influence in organizations undergoing crises, transitions, or growth. In this article, we will explore the transformative potential of interim leaders, drawing from my personal experiences and insights into the vital and pivotal role that the right interim leader can play in guiding organizations through turbulent times.

The Role of an Interim:  The role of an interim leader differs from the role of a consultant, or perhaps a fractional leader.  (My dear colleague Diesha Cooper has several informative blog posts on fractional leadership at Execuly.com.)  

An interim leader is generally a full-time, contracted role with a clearly defined end date that can be adjusted depending on the needs of the organization and the length of the search process.  When engaging an interim leader, the board should have a clear and defined set of responsibilities and deliverables to be achieved during the period of the engagement.  Certainly, these goals may change as the interim leader completes an internal assessment of the organization; however, the board must be clear and aligned with the key areas of focus as they onboard the interim leader.  

In general, the interim CEO is fully integrated with the organization and has the autonomy to drive and execute both strategic and operational imperatives.  They serve as the face of the organization and represent the board and key stakeholders both internally and externally.  

One of the primary goals of the interim CEO is to be a trusted advisor and resource for the board of directors.  The board and interim CEO should establish a clear process for communication, including frequency, format, and audience.  In some cases, the board may want the interim CEO to report only to the executive committee, in other cases the board may want the interim leader to report to the entire board.  Regardless, this framework should be established at the onset.  Finally, the board should clearly outline the key performance indicators that are to be reported on, as well as allow the interim CEO to report on other factors such as organizational culture, the financial health of the organization, talent, and other key factors that may be important such as external or market pressures.  

It is not uncommon for the interim leader to be involved, at least in some way, in the search for a new executive leader.  This might mean that they meet with the executive recruiter who is leading the search; they may sit on the board search committee as a non-voting member, or they may be involved in the interview process.  Having the interim CEO involved in some aspect of the interview process can be extremely helpful as they have first-hand knowledge and insights into the current state of the operation and can provide valuable insight into what skills or competencies may be beneficial to the organization.  

And finally, as the search process moves forward, the board and interim leader may decide that the interim leader is the right person to fill the role permanently. This does happen and it can be beneficial if the interim leader is the best person for the role.  The board needs to clearly and carefully understand and weigh the needs that the organization currently has against the future needs of the organization and make sure that the core skills and competencies of the interim leader meet both the current and future needs.   

The Unplanned Interim Role: My journey into interim leadership began unexpectedly while serving as the board chair of a community healthcare organization in the midst of a significant crisis and CEO transition. The board asked me to step down as chair and assume the role of interim CEO while they conducted a search for a permanent CEO.  Sure, why not!  I thought, how hard can this be?  WOW, I had no idea how this decision would affect my career and my perspective on interim leadership.

As I stepped into the interim role, the primary focus of the board was to keep the organization operational while we identified a new leader.  As I got involved in the daily operations it became abundantly clear that the amount of work that was going to be required to stabilize the organization was substantial.  There was an incredibly toxic culture, ineffective leadership at the executive level, significant financial uncertainty, and an incredibly negative perception of the organization in the community.  

In coordination with the board and within the first week of being in the role, I made several staff transitions, including at the executive level.  This sent a powerful message across the organization that the board was taking its governance role seriously and that the behaviors that had placed the organization in jeopardy were no longer going to be tolerated.  

I then went on a thirty-day listening tour and met with every department and almost every employee in the organization to understand, from their perspective, the most pressing and urgent issues facing the organization.  To say this was an eye-opening exercise would be an understatement, yet it provided me with almost immediate insight into the areas of the organization that needed immediate attention and focus.  It also gave me concrete and tangible information that informed the path forward that I was able to share with the board to get their support to move forward with a couple of substantive changes, including ending programs that were not financially sustainable programs and returning funding for programs that the organization was not going to be able to execute.  These were very difficult decisions to make and I needed to have as much information as possible to present to the board to inform the decision-making.  

After my first forty-five days, I informed the board that, in my opinion, it would be short-sighted to continue the search for a permanent leader as there was so much work that needed to be done in order to set up the permanent leader for success.  I was very clear that I did not want the position permanently and said that publicly both internally and externally to set clear expectations.  I knew that many of the decisions that needed to be made and executed were going to be unpopular.  I felt strongly that the new CEO would have a better chance of success if there was a stabilized and operationally effective organization where they could move forward without having to do the necessary “dirty work” that was required.  

My initial interim engagement was originally for 3 months and I was there almost 2 years.  There were certainly several heated discussions and decisions that could have been made more effectively during my time as interim leader.  At the same time, there were many wins, incredible staff development and growth, and an enhanced experience for our clients.  I am proud that I was able to serve as an important part of the organization’s history and even more pleased that the permanent CEO has gone on to achieve remarkable success and built on the foundation that was created during the transitional period.  

Let’s explore in more detail how organizations can leverage an interim leader.  

Navigating the Interim Landscape: As we initiated the search for a permanent CEO, it became evident that the skills and competencies required to stabilize the organization were vastly different from those needed to foster future growth. This is a common dilemma, and organizations often look for a leader who can stabilize the internal operations of the organization (e.g, transition staff (as appropriate), assess organizational culture, and stabilize the financial footing) while also growing and strengthening the organization (e.g., developing and growing external relations, growing revenue, and implementing a strategic plan of the organization).  While there are certainly leaders who can do both, the board can feel a lot of pressure to appoint a new CEO as quickly as possible. This pressure can cause them to overlook crucial steps such as clearly identifying the skills and competencies required for the transition period, as well as identifying the leadership background required for achieving future growth. 

A capable interim leader can achieve several key objectives during a transitional phase, including offering a fresh perspective based on their previous experience and expertise, identifying organizational strengths and weaknesses, overseeing restructuring efforts, engaging with internal and external stakeholders to identify growth opportunities, and ensuring a smooth transition to the permanent leader to establish stability during this period of change. 

Conducting an executive-level search is often time-consuming and costly. By leveraging an interim executive, the board can alleviate the pressure to rush through the process, providing them with time to consider the essential skills and competencies required of the new leader. 

For a successful interim engagement, the interim leader, board of directors, and key stakeholders must have a shared understanding of the scope of the engagement, including the goals and deliverables. Without this alignment, the potential for transformation during the transitional period is squandered. 

Utilizing an interim leader can prove invaluable during the onboarding of a new executive. They can provide insights into activities conducted during the transitional phase, including the results of any talent assessment, an outline of operational resources, culture, and focus areas for continued improvement. They can also provide insight into the culture of the board of directors and ensure that the incoming executive is prepared to effectively partner with the board. 

In conclusion, interim leadership can be a powerful force in supporting organizations and their boards during crises and transitions. By aligning their efforts with the goals of the organization and its stakeholders, the new leader will have a smoother path forward and a stronger ability to move the organization towards growth and long-term success.