Few businesses can operate successfully without someone sitting in the CEO’s chair, and yet it is not uncommon for a family enterprise to find itself unexpectedly without a chief executive. The office may become suddenly vacant due to unforeseen resignation, retirement, termination or illness.
Whatever the cause of a sudden vacancy, it can take several months to identify, recruit and on-board a new CEO. Meanwhile, the business must operate smoothly. Salaries of family and other employees must be paid. Dividends to owners must continue without interruption. The solution for unexpectedly leaderless firms is often to appoint an interim CEO. These temporary executives step in for a few months or a year, giving the firm time to find a permanent replacement.
Companies may choose interim CEOs from among existing executives, insider interim CEOs are often CFOs, COO, directors or past presidents. These insiders can perhaps better maintain continuity and existing relationships. There is also much to recommend non-family outside interim CEOs, especially when a fresh approach seems needed. These individuals may have previous experience acting as temporary CEOs in many types and sizes of businesses. They will also be familiar with the unique challenges of a interim CEO. Some of these challenges include calming employees, maintaining ties with suppliers and vendors, mentoring successors and encouraging the building of ties between members of the ownership family. Thanks to their fresh viewpoints, lack of previous obligations and varied experience, outside interim CEOs can stimulate rapid and beneficial change. It is not uncommon for non-family interim CEOs to find ways to break long-standing log-jams hampering the organization’s performance.
To make sure the CEO’s decisions reflect the family’s wishes, the interim should be given clear, measurable goals and be held accountable for achieving them. A temporary CEO isn’t supposed to be forever, but the timely and judicious use of an interim CEO can help a family business survive a crisis and extend its longevity and legacy.
Finding, selecting and placing an interim CEO can be a challenging task during a time in your business that is already demanding. If you find yourself in that position REGENERATION can help. We have experience both functioning as an interim CEO and helping companies identify those resources.