Facing a Leadership Transition? Consider an Interim Chief Executive
Authors: Erica Poff, MA, CAE, PMP, IOM, Vice President of Talbott Talent; and Heather Hunter, Marketing Intern
No leadership transition is easy. An organization’s board of directors will need to manage responsibilities beyond simply finding a replacement, depending on the circumstances surrounding an executive’s departure.
A solution for organizations navigating a CEO transition is to hire an interim chief executive. Depending on the needs of your organization, an interim CEO can provide essential leadership throughout the transition period. To decide if it makes sense to hire one, it’s important to understand exactly what an interim CEO is and when they can help you most.
What does an Interim Chief Executive do?
An interim chief executive is an experienced nonprofit leader who stabilizes an organization during an executive transition. They act as a bridge between outgoing and incoming leadership, softening the change as much as possible. In an article for Guidestar, Bill Hoffman explains, “An interim leader’s tenure can be a positive experience that moves an organization forward while a search is underway for a new CEO.”
An interim CEO will:
Manage day-to-day operations to continue the organization’s progress.
Deal with emergencies and fix immediate problems.
Set the stage for the incoming CEO by preparing the organization’s staff to onboard and work with their new leader.
Help prevent stagnation or decline during the leadership vacancy.
An interim CEO will not:
Spearhead new initiatives or get involved in organizational strategy. Since the interim CEO is temporary, it doesn’t make sense for them to roll out large-scale changes. These should be left for the permanent CEO to plan and implement. The exceptions are when the interim executive discovers problems that need immediate solutions or when they have intentionally been brought in as a catalyst for major organizational change.
Act independently of the board. Unlike permanent CEOs, who have the authority to implement the board’s strategy with reasonable autonomy, an interim executive does not act without the explicit approval of the board (unless otherwise stated in the contract).
When should my organization bring in an interim executive? Not every situation is right for an interim executive, but there is risk in leaving a CEO position vacant for any amount of time. You should consider hiring an interim if:
The vacancy occurs suddenly. If the CEO leaves without warning (of their own accord or at the request of the board), an organization’s reputation will be the subject of speculation from within their industry and community. Hiring an interim quells gossip and provides reassurance that the organization’s work is still on course.
Furthermore, an interim executive can boost staff morale by providing consistency and stability. Because the interim is handling the CEO’s daily responsibilities, the board can take the time they need to search for the best permanent replacement. This is especially helpful if the organization’s succession plan is too vague, outdated, or nonexistent.
You’ve tried – and failed – to find a new permanent CEO. An unsuccessful search is demoralizing for both the board and the staff. Whether the candidate rejected the offer, or the replacement didn’t work out, the failure is discouraging and represents a significant loss of organizational resources – time, effort, and money. As a result, people may lose confidence in the capabilities of the board, and the organization may face reduced productivity, reputational damage, and insecurity over an uncertain future. An interim can re-stabilize the organization, buying time for the board to consult a professional recruiter and build a better strategy for sourcing candidates. This article by Talbott Talent’s Vice President, Erica Poff, CAE, MA, PMP, IOM, offers advice to organizations for a successful executive search.
There will be a significant gap between the outgoing CEO’s departure and the new CEO’s start date. An extended period without leadership will stall progress – or worse, cause backsliding – of the organization’s goals and strategic initiatives. An interim can help maintain communication with key stakeholders and funders who may pull their support from the organization if they can’t see a clear plan for the future. When the permanent CEO steps into the role, the interim will have made it possible for them to take the helm without struggling to regain internal and external momentum.
The organization is underperforming or in need of significant turnaround. A skilled interim can diagnose the problems facing the organization and help to address them during the transition period. If necessary, the interim can also reorient the CEO’s position to meet needs the board may not have noticed.
In these cases, hiring a seasoned executive for an interim role is essential. This guide from BoardSource is a useful tool to understand which type of interim leader you should hire given your organization’s situation. No matter your needs, an experienced executive brings expertise and an outside perspective to an interim role, setting your organization on a sustainable path for the future.