Interim CEO posts can be a high-impact and effective use of resources for small-to-medium charities, but the opportunities are sometimes disregarded by smaller organisations due to the higher costs of skilled interim leaders.
It may come from a somewhat biased viewpoint, being an interim CEO myself, but I have seen first-hand time and again how an interim role can help to transform an organisation, enabling change to take place faster, more effectively, and more positively in the long run.
An interim CEO is not just a ‘mini-permanent-CEO’. They have a different role and present different opportunities and – best of all – they essentially work in partnership with your to-be-appointed permanent CEO. They identify and resolve issues, lay groundwork, prepare relationships and deal with some of the trickier, more conflict-prone concerns to ensure that your permanent CEO has their best chance of being able to achieve long term success. Interim CEOs tend to be able to act and speak more directly, getting to the brunt of problems without being quite so limited by the long-term relationships that are so essential to a successful permanent CEO.
Here are just a few examples of times when an interim management post can really help a charity out:
1. During a crisis
If your charity is facing a major crisis, you may also have had issues with your existing or previous leadership. This may be because of structural problems, such as joint leadership (which rarely works), the failure to have a CEO at all when you needed one, or because of the inability of your lead staff member – for whatever reason – to handle the situation effectively.
An interim CEO should be good at getting across the key issues swiftly, identifying the best path through (and out) of the crisis, and using their broad skillset and experience to help the charity get back on its feet.
The interim CEO does not have to be an expert in the organisation’s usual day-to-day work, but should be able to understand quickly the context and priorities of the operational activities in order to make the right decisions.
An interim CEO can speak frankly to a Board, setting out the situation and options in black and white in a way that a permanent CEO may feel constrained or reluctant to do. An interim CEO can also make the trickier decisions that need to be made, taking the brunt of the responsibility for some of the tougher decisions while protecting longer term staff and Board relationships.
In some cases, a crisis may have arisen from relationship problems between a Board and a CEO, the latter whom then departs. An interim CEO can identify this and can support and advise the Board on the problems and how best to resolve them. In my experience, Boards are able to listen to and resolve critical and constructive feedback more successfully from an external advisor or interim CEO than they are from a permanent CEO.
When the immediate crisis has been managed, an interim CEO can help to identify the priority skills and experience for a permanent CEO to join the charity. They can help to smooth the path of their permanent successor, ensuring that they have addressed the immediate and trickier aspects of the situation required so the permanent CEO can focus on the long term, and on strong and ongoing relationships with stakeholders.
2. After a long-term CEO departs
When a charity says farewell to a CEO who has been in post for many years, regardless of how good or not-so-good the CEO has been, an interim CEO can be a useful transition person. They give the opportunity for a fresh review and assessment of the charity from an external perspective that isn’t coloured by their long-term role as its leader. In this situation, an interim CEO can also more closely focus on the Board and help it to improve its own processes and relationships, paving the way for improvements in staff/Board interactions and charitable governance.
In particular, the departure of a Founder can be an enormous change and challenge for a charity and for the Founder personally. When the Founder is joining the Board, which is often the case, an interim CEO can help to establish the new boundaries and roles with the Founder in their new position. This enables some of the inevitable kinks to be worked out before a permanent CEO is identified and appointed.
As with a crisis situation, an interim CEO is well-placed to gain a swift understanding of the charity’s operational perspective and to bring this knowledge to support the Board in recruiting the right permanent person going forward.
3. When the charity’s future is uncertain
There are times when a charity is in such a tenuous situation that its future is unknown, and it may seem counterintuitive to pay extra for an interim CEO in such circumstances. However, recruiting a permanent CEO is an expense in itself, and leaving a charity that is unstable and uncertain without leadership is not an option.
Few permanent CEOs would wish to take on a role that could jeopardise their reputation if a charity is in severe crisis, as it may look like the charity’s failure is their responsibility. They may also be unwilling to leave a current role for a position that may not turn out to be permanent.
In this situation, an interim CEO can come in quickly, hit the ground running and bring their experience of turning around charities on the brink to give you the best chance of success. They will also be able to help you make the necessary decisions to wind up, merge or take other action that reflects the charity’s best option at the time, without being affected by the prospect of losing a permanent job.
But can’t a permanent CEO do all of this?
The skills of a permanent and interim CEO do not tend to be the same. Interim CEOs will be expert in internal processes and structures, charitable governance, change management and handling a crisis. An interim CEO will be able to solve problems quickly and efficiently, and make the harder decisions necessary to keep a charity afloat. A permanent CEO is more likely to bring cause-specific experience and relationships, and have a strong skillset in careful long-term relationship development.
It is possible to find this skillset in a single person, but the benefits of separating the role outweigh this. If a permanent CEO has to deal with challenging situations, they will also have to rebuild relationships and expectations after having to make the tricky decisions, rather than the opportunity that an interim CEO presents of having a fresh start with a permanent CEO when the crisis has passed. Permanent CEOs are likely to be constrained in interacting with the Board, and – however hard they try – they will be affected by their own personal interest in their long-term job security.
Finally, recruiting a permanent CEO is often very expensive and time consuming and takes months of notice periods to free them up. There simply may not be time to wait for that person to be available, whereas an interim should be able to start in one form or another quickly, even if they have other projects on that they will need to finish up.
What does it cost?
Day rates vary, depending on whether you’re working directly with an independent consultant or through a consultancy firm. Factors that may affect day rates may include the length of the contract, the number of days per week required, the complexity of the crisis or situation and, obviously, the specific experience and expertise of the interim CEO concerned. It is also likely that you will be responsible for covering travel and other out-of-pocket expenses incurred by the interim CEO. VAT may apply for some organisations and individuals.
Interim CEOs are usually not employees, which means that the charity is not liable for national insurance contributions, annual or sick leave, or other employee benefits.
It would usually be expected that the day rate will be higher than the permanent CEO pay scale, unless you are recruiting for a simpler (and likely longer-term) interim position, such as to cover maternity leave or a sabbatical.
How to find an interim CEO
If you know what you can afford, then advertising the role (CharityJob is a popular choice) and seeing what comes in is one way of doing it.
Alternatively, recruitment agencies or consultancy firms are another avenue.
Or, of course, good old LinkedIn and Google can help you identify people you can contact directly for an initial discussion.
Best of luck!
Get in touch for a no-obligation chat to discuss your potential interim CEO needs.