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FINDING THE RIGHT INTERIM
22 August 2007
Headrenter vs Headhunter
A new profession has emerged in the new millennium - Headrenting. Just as Headhunting appeared in the 70’s, Headrenting the practice of providing Senior (normally billing in the range of £750 to £1000 per day) Interim Executives (as opposed to permanent executives) has now become established. It differs markedly from Headhunting both in terms of speed (candidates are sourced in days not months), methodology and candidate profile.
The differences are best summarised as follows:
Time to fill position
A Headrenter typically 8-10 days, whereas a Headhunter normally takes 4-6 months, or longer.
Process
The Headrenter conducts an ongoing interviewing process to maintain a pool of pre-selected candidates, whereas a Headhunter’s search starts after the briefing, often using researchers.
Providers Immediate Objective
The Headrenter hand-picks the right person for the assignment who is likely to be needed immediately, whereas Headhunters aim to present a credible short-list, offering a wide choice of candidates.
Pool of likely candidates
The Headrenter chooses from a few hundred specialists – not in permanent work, whereas the Headhunter chooses from a cast of thousands more some in work, some out of work.
Consultant Background
Headrenters are specialists in identifying Interim Executives to manage change and transition. Headhunters are professional recruiters, experts in competency profiling, organisation development and succession planning.
Fees
No initial retainers are paid to the Headrenter, fees are paid as on going ‘rental’ during the period of the assignment. This compares with Headhunting where fees are usually committed and paid up front for delivery of short listed candidates.
The Headrenter looks for the following key characteristics:
- Natural leadership and interpersonal skills.
- Successful track record of change in wide ranging environments.
- Not job seeking – no risk of leaving an assignment halfway through.
- Resilient and energetic – works well independently.
- Happy to work a level or two down.
- Good mentor and coach.
- Immediate credibility.
- Happy to work out of suitcase (50% of assignment are ‘away from home’).
- An extensive ‘tool kit’ of experience to be applied.
This is very different from the ideal permanent recruit:
- Will need to be persuaded to move.
- Job seeking, career and experience building.
- Has future promotion potential.
- Corporate player.
- Will be challenged by the job.
In Summary
The Headhunting Industry which has developed over three decades is now well understood. Whereas the Headrenting Industry continues to confuse, for example, who to go to for what level of appointment.
The UK Headhunting industry has grown significantly over 30 years to reach £700mill. Not surprisingly UK Headrenting fees remain still relatively small at circa £50 mill with the top 10 providers by market share dominant.
In conclusion, as long as specialist Headrenters meet client expectations as indicated by the quote below, the opportunity is enormous.
‘Unless the Headrenter has a bank of suitable candidates, already well known to them, there is no way that they can provide me with the calibre of candidate that is even worth a first meeting, given the timescales we are working to.’
Director
Alchemy Partners
INTERIMS APPLIED FOLLOWING ACQUISITION
COMPAIR is one of the world’s leading manufacturers of compressed air and gas systems and has been in existence for over 200 years
In 2001, on a turnover of £190 million it was making a loss of £19 million and it was put up for sale by Invensys, but they could not find a buyer.
In January 2002 Nick Sanders was brought in as Chief Executive to turn it around to make it an attractive prospect for purchase
Sanders devised a strategy to achieve this and after only two months Alchemy Partners showed interest in buying it and by May 2002 the sale had been completed.
Client: Nick Sanders, CEO, Compair
We had come up with a strategy to turn the company around and had identified 7 major areas for immediate action and, because of time and cash constraints, all needed to be carried out in parallel.
Phase One: Cost Reduction:
“The first phase included closing down three factories and moving production to other plants abroad without undermining our sales output and service to customers
In parallel we had to review our strategic sourcing, reduce our inventory, sort out our pension fund problems and create our own “aftermarket” business
As far as I was concerned, all the thinking had been done and the strategy agreed. However we did not possess the calibre and depth of management within the company to implement these major changes
What I needed were highly qualified, experienced managers who had already successfully done what we required in other companies. And I needed them now”
We therefore identified Interims as the way to go for two of the closure projects. The third closure was resourced internally. The right ones can be trusted to get on with the job and need no “hand-holding” or encouragement to implement change. They approach the job with an impartial frame of mind and carry no baggage or long term future ambitions for themselves within the company. The problems they were likely to encounter would not take them into un-chartered territory. The regular assignment review and evaluation procedure built into the interim’s terms of engagement also underpinned my faith that this was the right way to go.
Alchemy recommended I call BIE
Key to the whole process is the experience, judgement and professionalism of the interim provider. If they are worth their salt they should be able to select, from their pre-selected focussed network, one or two candidates capable of fulfilling their role in a matter of days, if not hours – given their intimate knowledge of both the candidates on their books and the appreciation of the assignment as outlined by myself.
We appointed two interims within five days and they were on site within ten days.
Phase Two: Growth:
“If we were to be competitive in the global marketplace we also had to develop a new generation of products that had an edge on the competition and focus on new markets. We had some excellent engineers in the company but they had never been given their head to design the products that the market wanted. Just as importantly we lacked the management expertise in our Sales and Marketing department to chart our route to new markets and exploit the potential of emerging markets.
Again, we needed a highly qualified and experienced Sales and Marketing Executive in a matter of days, not months – therefore the interim route was the most obvious option. I appointed two over a period of two years – both with extensive international experience.
The interims soon had their strategy in place and, because of their stature and reputation, they were also able to attract high quality personnel to assist them to build a robust department. We acquired ten businesses worldwide in locations such as Australia, New Zealand and Hong Kong and opened up important new markets in China and Russia. Since the appointment our sales last year have increased by 10% against a market growth of only 4%. We are now profitable after all costs including interest charges.
Going forward:
“We continue to use the Interim option and have since appointed three further interims – one to up skill a Divisional FD role, one mentor a Divisional MD and one to manage European subsidiaries, Interim Executives have been crucial to the turnaround in this business. We did not have the luxury to sift through reams of CV’s and conduct an endless number of interviews. We expect the Interim provider to deliver first time. Neither did we have the time for the new managers, once appointed, to learn “on the job”. We needed “over-qualified” individuals who were used to making executive decisions on issues that they were familiar with because they had been there before.
Providers Comment:
Compair is a classic turnaround where the use of Interim has been used in two distinct phases – downsizing and growth. It illustrates the wind ranging functions to which interim management can be applied, both within the UK and abroad in a private equity environment where time is the essence.
Further Note: Compair was voted Private Company Turnaround of the Year 2006 by the Society of Turnaround Professionals (STP)
To discuss your interim management requirements with BIE call +44(0)20 7222 1010