There are many different types of interim management. The basic general division can be broken down by function into three basic groups; substitution, project and transition.
Substitution Interim Management
An interim manager is essentially a replacement manager working in the existing organizational structure of the company, on a temporary basis. Usually because of illness, the immediate dismissal of an employee, maternity leave, or other unplanned vacancy, the company needs to ensure immediate replacement of a top executive such as the financial director. The temporary replacement – the interim manager – must be able to overtake the position and assume responsibility in a few days quickly.
Interim managers are often overqualified, so they can quickly take over and provide the necessary management for success. At the end of the agreement, the interim manager will transition his responsibilities to a permanent manager. The expected salary for interim managers is therefore usually higher than for permanent managers. (See the comment on Interim management principles “do you know how much you are really paying your manager?”). In the finance field, a substitution interim manager is usually hired for a period of two to six months, which is sufficient time to find a new long-term manager.
Project Interim Management
Project interim management is used in situations where the company handles some special or challenging project and does not have sufficient internal human resources. Alternatively, the project may require special knowledge and experience that existing managers do not possess. The interim project manager does not become a permanent part of the organizational structure of the company, but rather is hired only for the duration of the project.
Some examples in the area of finance include new company acquisitions or expansion into new regions or markets. Companies must establish or adjust reporting. Unlike an advisor or consultant who remains completely outside the company and process, an interim manager is directly involved in the project and helps with its implementation. The duration of action here depends directly on the length and complexity of the project itself, and ends with its completion. In the finance field, this term usually ranges from two months to a maximum of 3 years, which can be generally considered the maximum tenure of an interim manager.
Transition Interim Management
Interim management includes restructuring and crisis management where appropriate, as well as implementation of measures to prevent insolvency and other financial crises. These situations require fast and efficient external executive intervention, thus companies often engage an interim manager who usually first analyzes the situation and then per agreement, assumes all the necessary powers to achieve the realization of the agreed strategic objectives. In principle this is a transition from the problematic situation in which company finds itself. In the worst case, this is the last chance before the onset of a bankruptcy trustee.
As discussed above, crisis and restructuring projects usually start with an analysis of the situation. This is followed by a draft plan of concrete actions and next steps. It’s implementation will be undertaken after the approval of this plan by owners or banks, leasing companies, or other creditors, such as major suppliers, etc.
Interim managers usually come overqualified with a lot of experience so as to be able to immediately initiate appropriate action. Besides the basic three types of interim management, there are other various specific forms which can be found abroad, such as engaging in statutory bodies of the company for a defined period and a certain order, etc., which are often a combination of the above three types.