Beware of Wolves in Sheep's clothing

My views on which segments of the interim sector are doing well are well known. It is highly likely that if you have anything to do with change management, turnaround and business recovery you are probably gainfully employed at present. However the generalist stereotypical interim segments of Finance, HR and IT are suffering at present as a result of a hug influx of executives looking for work as a result of the recession. I feared this might happen at the beginning of the credit crunch and it would now appear that this is what is happening at present.

Career interim managers are being gazumped to roles because the ‘between-jobs’ executive will work more cheaply and will accept lower contractual terms. Whilst clearly I do not hold it against anyone trying to make ends meet it has led to a shift in the interim market with several senior HR interim managers on our books who have worked continuously for years now being out of work for between 3-6 months at a time.

In particular, HR and IT professionals are feeling the strain at present and whilst the public sector is inundated with professional interim managers (in local government and the NHS in particular) these sectors will undoubtedly see cuts in the future once the next election is out of the way and the government of the day is forced to tackle the growing public sector cost.

Career interim managers will always give better value for money than executives ‘resting’ or ‘between jobs’. I have listed a number of reasons below why potential clients should select career interim managers ahead of their permanent counterparts:-

1. Career interims are objective biased and not time biased, they will complete the task in hand more efficiently rather than spin it out to suit their personnel circumstances
2. Professional interim managers will not up and leave when they find a permanent role
3. Career interim managers work to a ‘code of practice’ and have professional indemnity insurance in place to provide ‘peace of mind’
4. Career interim managers are likely to be more rounded individuals able to offer advice and experience on topics unrelated to their assignment

I would strongly encourage potential clients to closely check the credentials of the ‘interims’ the might be engaging on assignment to ensure they are real deal.

UK Manufacturers use Interim Managers to Beat the Monkey

UK manufacturers are turning to interim management providers like Aster Interim to help them free up cash and improve liquidity during the current recession. Many manufacturing companies are reducing their headcount to cut costs, but a number of others are using interim managers to make their business processes 'leaner' and maximise margins on existing sales.

Global Market Pressure

The UK manufacturing sector has long been under pressure from global market forces and the recent figures published by the UK Government would seem to bear this out.

Gross Domestic Product (GDP) contracted by 1.9% in the first quarter of 2009. Output from the production industries fell by 5.3% compared with a fall of 4.5% in the previous quarter.

These statistics were driven by manufacturing output which fell by 5.5%, leading many manufacturing companies to ask their staff to accept shorter working hours, pay cuts and even redundancy. This is clear evidence that UK manufacturers are really suffering in one of the worst recessions, if not the worst on record.

Beating the Cash Monkey

Companies are currently looking for ways to beat the ‘cash monkey’. This is a metaphorical term for the lack of liquidity many companies are suffering from at present, as a result of reduced sales, bad debts, increasing inventories and rising costs.

All companies know that cash is king and the finances of the indigenous manufacturing sector cannot be helped at present with the further difficulty of getting loans and extensions to credit facilities. As a result, SMEs and multi-national OEMS alike need to find other ways to free up cash in their businesses to improve liquidity.

Using Interim Managers

There are two ways to make money from manufacturing: making more with the same resource or making the same with less resource.

Many companies have chosen exclusively the second option and cut their cloth accordingly by reducing their headcount, but a number of other manufacturing companies are choosing interim management providers to help them through the worst of the recession.

The need to increase efficiencies and reduce costs has led to a fillip for interim management providers like Aster Interim. In particular, those interim managers with experience in change management, business turnaround and using continuous improvement techniques such as lean and six sigma are finding their services very much in demand at present.

This recession has catapulted interim managers with these skills to the forefront of the recruitment sector. Companies are on a drive to make their business processes ‘leaner’ and maximise margins on existing sales. Every effort is being made to ensure any amount of inefficiency is identified and eliminated.

Lean Business Techniques

By working ‘smarter and not harder’ many organisations are hoping to last out the recession and come back leaner and fitter when the economic tide turns. Lean business techniques are being employed companywide from design through to distribution. Perhaps those organisations with the foresight to improve their business models now rather than doing more of the same will be the organisations able to steal the march on their competitors when the good times return. Interim management can be self-financing if the chosen manager succeeds in achieving the set objectives.

Interim Management Assignments

UK manufacturers are looking for interim managers who can complete assignments such as: factory re-layout to minimise waste, process mapping to reduce non valued added activities, leaning out supply chains to bring about improvements to lead-times and cash outlays and working to make more business processes more repeatable and capable.

Perhaps interim management maybe one solution to removing the cash monkey from the UK manufacturing sector.

Visit the Aster Interim website: www.aster-interim.co.uk

Contact Details

Paul Wilson
1 The Lane
Mursley
Milton Keynes
Buckinghamshire
United Kingdom
MK17 0RY

Tel: +44 (0)1296 720281

enquiries@aster-interim.co.uk

Is Lean a dichotomy?

When I mention the word ‘lean’ in a business context some people tell me it stands for making people redundant and making do with the absolute minimum amount of people. In reality this cannot be further from the truth.

Think about it, if the objective of lean is to remove the non-value added activities from a process enabling ‘value to flow’ so that the customer receives a better quality service or product, then this definition just doesn’t make sense. Anything that would jeopardise this objective being achieved is not in the customer’s best interests and therefore by definition cannot be as a result of a lean programme.

Instead Lean is a philosophy concerned with making processes more robust and predictable by removing ‘stuff’ that gets in the way like waiting time, bottlenecks and situations likely to induce quality issues. Lean is about making processes work better by involving the workforce and not just reducing the workforce. It is true that sometimes the process improvements thrown up efficiency gains following lean introduction can result in fewer people being required to carry out a particular activity but it is also true that it is sometimes necessary to introduce people into the process to make it work more smoothly.

Also lean organisations which understand the philosophy try to re-assign people from non-value-adding activities to value adding activities because they understand that human talent is the greatest asset a company can have. Each person is a ‘process expert’ in their own right and the knowledge they have is invaluable.

In summary, Lean is not a dichotomy, it is just sometimes badly implemented, mis-understood and used as part of a political agenda.

What is the best way to approach a new interim assignment?

Everyone has their own approach to a new role but here are a few tips how to ensure you get off to a flying start.

10 Useful Tips and Suggestions

Ensure you receive clear, concise, tangible objectives

Ensure you fully understand the scope of the role and your responsibilities

Take time out to chat with your peers and subordinates alike to get an understanding of the main issues and who the movers and shapers are within the organisation

Use the Management by Wandering Round principle espoused by US business guru Tom Peters - go and see for yourself ‘where the action is’, don’t just rely and what you have been told, make your own judgements

Ensure you work the hours appropriate to the task in hand. Interim Management is rarely a 9-5 occupation

Formalise some useful KPIs and decide how they will be measured, keep them simple

Generate a plan of the activities that need to be carried out, formalise this and make it visible to the stakeholders

Ensure you write a one page weekly report summarising your activities, performance against KPIs and future tasks and actions. Your client needs to know they are getting value for money and you are making a difference

Ensure you get regular and critical feedback from the Stakeholders on their ‘perceptions’ of how the assignment is going

Finally, do not stretch out the assignment beyond the scope of the project boundaries unless requested to do so by the stakeholders

Markets showing signs of Recovery

As summer approaches I am seeing genuine optimism amongst our interim managers and clients alike that certain market sectors are starting on the long road to recovery.

However, most of our interim management placements at present are still in the areas of business improvement, change management and business turnaround which would indicate organisations are still prepared to spend money when a leaner, fitter business is the result.

Where interim placements were common a short time ago to cover for scenarios such as maternity, staff sabbaticals and executive terminations, in our experience, organisations are preferring to re-organise internally instead by battening down the hatches in order to save funds in these uncertain times.

We have provided short lists of candidates to a number of clients in recent weeks only for the client to re-evaluate their plans at the eleventh hour and withdraw the assignment favouring instead a ‘make do and mend’ strategy.

I would suggest that this trend may continue for at least the next 12 months before more standard disciplines and scenarios re-emerge once again within the interim portfolio.

In truth I believe this may well have a positive Darwinian ‘natural selection’ type effect on the interim pool of talent because in my opinion it was starting to get saturated with interim managers from too few disciplines causing supply to outstrip demand ultimately driving down the day rates.

This recession may also lead to other changes in the provision of recruitment solutions for many private and public organisations.

Human Resource Directors are starting to see that swathes of employment laws and costs relating to permanent staff do not apply to interim managers meaning that the use of interim managers has suddenly become a lot more appealing.

I believe the balance of 2009 will test us all to the limit but at the end of it we will have a leaner and more structured recruitment industry where both permanent and interim management solutions are available in equal measure.

Green Shoots to Recovery

When is a green shoot a green shoot? When it has an interim assignment at the end of it?

Not a day goes by without someone telling me the economic recession is affecting their organisation in some way. However, perhaps more surprisingly I have had views expressed to me from opposite ends of the spectrum. There are those amongst the ‘life essentials’ sectors (e.g. food, utilities, public sectors) where demand is strong and those amongst the ‘lifestyle’ sectors (e.g. automotive, leisure) where business is relatively poor based on diminishing disposable incomes and the inability of potential clients to obtain credit finance.

However what is more interesting is that we are still seeing the same level of enquiries for interim managers as we saw this time last year. The only difference is that the types of assignments have changed. Gone are the extra ‘pair of hands’ type assignments typified many HR and IT projects and in their place have come assignments looking at business excellence and continuous improvement. Indeed many organisations would appear to be tightening their belts by using specialist interim managers to help them make business processes more efficient and transparent. We have had a number of enquiries for lean, six sigma and business process re-engineering specialist interim managers over the past few weeks from dramatically different organisations and sectors. I think it may even be boom time for those interim managers with these types of skill set.

In our experience the duration of some of these assignments is shorter than the average (typically 3-6 months) and day rates are under constant pressure but perhaps the interim sector may allow client organisations to improve efficiencies such that when the economic upturn finally arrives those green shoots can blossom into sustainable growth.

Do you need an Interim Manager or a Contractor

There are still a large number Human Resources Managers who believe they want an interim manager when what they really want is a temporary member of staff.

At Aster we get regular enquiries from organisations suggesting they need professional interim managers when what they really need is contract or temporary staff. I think this confusion is brought about partly by ignorance because Interim Management is still a relatively new concept to many HR executives despite its existence for more years than I care to remember and partly by the failure of interim management providers to adequately sell the concept. I have written about this issue before and I have not seen any improvements over the past few year.

So what are the differences between contract/temporary staff and interim managers. Typically they fall into a number of categories:-

1. Contractors tend to work through agencies or umbrella companies whereas Interim Managers often have their own limited companies.
2. Interim Managers are often senior executives who have had their own businesses or have operated at senior levels with organisations but are able to offer client transferable skills whereas contractors tend to specialise in one area of expertise.
3. To be truthful experience comes at a price so days rates for interim managers are often in excess of those charged by contractors or temporary staff. In addition career interim managers have to fund insurances, marketing and limited company costs.
4. In order to attempt to improve the awareness of the benefits of interim management Aster has decided to run a number of seminars to attract both potential users of interim managers as well as some new talent to the interim management pool. More on this in the next few weeks.