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The interim manager as a pilot through the crisis

20.08.2009 | 12:27 | David Christian Bauer, Holger Groß (Wirtschaftsblatt)

Family businesses that need to restructure due to the crisis or simply want to use the economic situation as an opportunity for a reorientation bring special challenges with them.

Legal challenges. From a legal point of view, company-related issues such as company and labour law as well as banking and insolvency law must be clarified. On the other hand, questions of influence, the law on private foundations or protection from creditors are also often a family issue. From an economic point of view, the tense situation means that the previous management alone is often overwhelmed or paralysed due to internal disputes. In such cases, interim managers can provide effective remedies.

Pilot on board. An interim manager is like a pilot who shows a captain the way through difficult waters. Once the route is completed, he goes off the ship. In times of crisis, two parallel types of crisis can typically be identified in family businesses: a corporate crisis and a family crisis. The pilot must therefore direct two closely moored boats and ensure that they do not drift apart and cause each other to capsize.

Lack of management capacity. The challenges in these turbulent times are enormous: collapsing sales, falling prices, the need for value adjustments, depleted equity and a lack of liquidity inevitably lead to the crisis. Companies often lack the internal management capacity to implement the measures critical to success. The pilot comes on board. He must restore the confidence in the ability to successfully change that has been lost in the meantime.

On course for success. How can the pilot be successful? First of all, it is always necessary to implement the operational change measures - i.e. the restructuring program. However, no interim manager is capable of driving change processes alone. The interim manager must therefore not only be technically sound, but also a good communicator. He must demonstrate this ability both externally, with banks, creditors, suppliers, customers and the media, and internally, with owners, staff and management.

Legal advice. At the same time, comprehensive legal advice is required: companies are restructured or sold, loans have to be rescheduled. In an emergency, short-time work or dismissals must be announced. In the case of short-time work, the financial consequences of the associated obligation to retain must also be taken into account.

Insolvency proceedings. Insolvency scenarios must also be developed regularly. In addition, a need for support arises within the family: the new situation requires, for example, an amendment of syndicate contracts or clarification of succession. For various reasons, it may be necessary to set up a foundation or amend existing foundation documents.

Protection of private assets. The protection of private assets, for example, also plays a prominent role. One could consider setting up a foundation or subfoundation and waiving rights of amendment and revocation in order to prevent creditors from accessing the part of the assets placed there. However, time limits for contesting such a foundation or subfoundation must be observed, especially under insolvency law. Furthermore, it may be necessary to amend the foundation's internal rights of influence, such as the appointment of family members as advisory councils.

Conclusion: If entrepreneurs, interim managers, staff and lawyers all pull together, interim management can certainly pave the way out of the crisis into a successful future.

Translated from German by Dr. Dieter Koerner

Source: Wirtschaftsblatt vom 20.08.2009, Authoren: David Christian Bauer, Holger Groß

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Making a profit with external know-how is one of the reasons why companies employ interim managers.

(firmenpresse) - Many medium-sized companies are faced with this problem: When it comes to structural changes, the reorganisation of work processes or the opening up of new markets, the necessary specialist knowledge and the suitable manager in the company is often lacking. Interim management, i.e. the temporary acquisition of management capacities, is the ideal solution here. Whereas in the past interim managers were mainly in demand to bridge vacancies or as a "fire brigade", today it is more and more the special projects such as reorganisation or restructuring for which an interim manager is needed in the company. During his assignment he has two important tasks: First, the existing company situation must be analysed and in a second step measures must be developed and implemented. The advantage here is that the interim manager is not integrated into the hierarchy of the company. So-called "political decisions" and a look at one's own career in the company are rather insignificant. Rather, those measures can be implemented for the benefit of the company that will bring the greatest success in the shortest time.

And what kind of people are they who work as interim managers? In addition to managers with a lot of professional and industry experience, there is an increasing demand today for younger interim managers as project managers or executives. They have a good chance of being placed, as they are often overqualified for a permanent position. For interim managers, on the other hand, what counts is their specialist knowledge and the fact that they can get started straight away. In individual cases, this can also mean that younger interim managers are deployed below or at the hierarchical level already reached. For interim managers, it is not primarily the fee that counts in their work. Independence and flexibility are what make the difference: tackling projects directly without regard to political decisions in the company, reorganising, building up, achieving a turnaround and then, when it is done, moving on to the next "construction site".

Translated from German by Dr. Dieter Koerner

Source: Firmenpresse / 04.04.2008 

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How will interim management develop in the future?

Germany has a lot of catching up to do in the field of interim management. When you consider how much more frequently interim managers are deployed in countries such as Holland or England than in Germany and yet annual growth rates of 10 percent and more are still expected there, the pent-up demand becomes even more explosive.

A contribution by Ludger Grevenkamp

Discrepancy between Germany and other countries

However, the market in Germany has also grown well in recent years, starting from a lower level. Nevertheless, the market and the range of interim management services offered by German companies is still little known.

Why is there such a discrepancy between Germany and other countries - especially Holland, England or the USA?

An answer to this question must necessarily generalise and will therefore be clichéd. On the other hand, there are unmistakable differences in mentality and management views, which are expressed in the open-minded and here rather reserved use of interim management.

Whereas in the USA and England, and to a large extent also in the Netherlands, management tends to think and act in a more factual and purposeful way and a sober cost-benefit thinking prevails, German managers are far more people- and consensus-oriented. German managers tend to explain, delay or discuss away problems rather than openly admit them and solve them quickly.

Americans, Englishmen and also Dutch people tend to be more pragmatic or simply to try something. In Germany, people prefer to analyze and test theoretically whether something can work. A certain tendency to perfectionism on the one hand and to solving a problem by their own efforts on the other does the rest.

Interim management offers considerable opportunities not only for the individual companies but also for the entire German economy. The enormous intellectual potential of over 10,000 interim managers can be used much better. The exchange of know-how between companies is intensified. Changes and projects can be implemented faster and with greater success. Crises are prevented or at least managed faster and better.

In view of the important advantages of interim management, not only is strong growth in this segment pre-programmed. The proportion of interim management assignments for change management tasks will also continue to increase significantly in Germany.

Worldwide developments
Regardless of country-specific conditions and trends, there are global developments that influence and determine the future of interim management. Driven by technical developments and globalisation, these are particularly noteworthy:

    - the constantly increasing intensity of competition and
    - the economic and working world, which is increasingly dictated by the capital market.

Companies are constantly being sold, bought and dismantled. They are outsourced, reorganized and renamed. There is hardly a larger company that is not internationally or even globally active and present. This means a high commitment of management capacity or a high management and therefore interim management requirement.
On the other hand, employees are increasingly realising that they themselves are the only ones who are committed to their interests. The so-called "self-AG" is becoming increasingly important. Who it works for is of secondary importance. The elaborate programmes for employee retention (new German "Retention"), which are designed to promote employee identification with the company and extend the retention period of the best employees, are more like "swimming against the current".

The attitude of companies to work in general and to management in particular will be further objectified.

The willingness of individual managers to market their own know-how as interim managers will therefore continue to increase, as will the openness of companies to consider interim management as a serious alternative solution.

Interim management becomes an integral part of modern personnel management. This gives companies additional opportunities to further increase their efficiency and flexibility and to maintain and expand their position in global competition. 

Translated from German by Dr. Dieter Koerner

Source: foerderland.de, technical contribution of 11.12.2006, Author: Ludger Grevenkamp