I heard it again yesterday. A person mentioned that companies who are in a “crisis” or in a “turnaround” situation should consider interim management in operations, finance, sales, or marketing. That is a true statement, but the majority of interim engagements are not in troubled companies.

Just because a company brings in an interim manager it isn’t a sign the company is in trouble.

Most interim marketing and sales executives, for instance, are engaged by a company to address one or more of these situations:

• Revenue growth has flat-lined, or is in decline. What worked in the past isn’t working now and the management team needs objective insight, new energy and different skill sets for a season to help them point the growth curve in the right direction again.

• There’s a temporary gap in leadership, gap in skill set, or gap in bandwidth that has an unacceptably high opportunity cost associated with the gap.

There should be no scarlet letter associated with the hiring of an on-demand leader. It simply means the company is very smart about how it allocates its resources.

Chuck Besondy is a principal at One Accord Partners and is co-author of Leadership on Demand: How Smart CEO’s Tap Interim Management to Drive Revenue. You can read more about Interim Sales and Marketing Management by Chuck Besondy at his blog One Riot-One Ranger.

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Presidents, CEO’s, COO’s, and even CFO’s of companies should consider an interim executive if they have:

• Stalled or unacceptable levels of revenue

• An “empty chair” in the CMO, VP Sales, or VP Business Development roles

• Competitors growing and/or taking market share

• Tectonic shifts in the market without a strategic response.

Leaders should not hire an interim executive if the organizational culture has demonstrated a propensity to worship a high-end consulting firm who will write a beautiful report to adorn your desk – because an interim is going to roll up his/her sleeves and make things happen.

Another time leaders should not hire interims is when the culture suggests there is so much defensiveness that failure is unavoidable. One COO we interviewed for our book, “Leadership on Demand”, put it this way, “If you’re an interim, your staff looks at you just like the child looks at the stepfather: ‘You’re not my daddy’.“

Seasoned interims, who have been on these battlefields before, are boldly direct with their questions – in order to sniff out organizational resistance in advance. It can save a lot of energy all around if the horse isn’t ready for a jockey.

Paul Travis is an interim marketing executive at OneAccord. Mr. Travis is based out of Seattle with 25 years of experience in high technology, marketing, and consulting. He can be reached at Paul.Travis(at)oneaccordpartners.com and at 206-910-2222.

Can you give a brief explanation of what an interim executive is and how they can help an organization?

To answer this question properly would require writing a book, which has been done. Visit www.leadership-on-demand.com.

I’ve seen many definitions of interim management. The one I like best is:

“Interim management is the temporary provision of additional management resources and skills. Interim management can be seen as the short-term assignment of a proven heavyweight interim executive manager to manage a period of transition, crisis or change within a company. In this situation, a permanent role may be unnecessary or impossible to find at short notice. Additionally, there may be nobody internally who is suitable for, or available to take up the position in question.”

The way this alternative staffing solution helps organizations is often profound and significant. If we look at the functions of Sales and Marketing, interim executives fill gaps in leadership, fill gaps in skill sets and best practices, fill gaps in bandwidth, and fill gaps in expertise—all for a season—so that higher levels of revenue performance and growth can be achieved. Sometimes the business is in a crisis or turnaround situation, most often however the company simply needs to quickly fill a critical short-term gap in order to maintain momentum and growth.

When should a company consider hiring an interim executive?

One way to look at this question is to realize that most executives and senior managers are in reality employed for an interim period. They just don’t know in advance when their contract ends. The fact is, a company uses a senior manager only for as long as that manager provides value to the organization. That may mean 6 months. That may mean 3 years or more. Consider that the average tenure for a CMO in a large corporation is 27 months and you begin to see the truth in this.

A company should consider hiring an interim executive (in marketing or sales) when any of the following situations exist:

Revenue has flat-lined or is in a state of decline and the existing revenue team is unable to turn the situation around.
Inject interim managers with objective insight, fresh energy and proven best practices into the organization to work side-by-side the existing team for a season.

A leadership gap exists.
If there is going to be a vacancy at a director, VP, or C-level in the marketing and sales organization for more than 2 months the organization will experience a loss of momentum. Put an interim executive in place to provide skilled leadership while a search for a FTE progresses.

A bandwidth gap.
Most companies face this situation at least once a year. Typically, the gap in resource bandwidth is associated with the go-to-market activities for a new product, or a market expansion. In these situation there simply isn’t enough experienced managers to effectively handle the temporary surge in work load. Bring in interims to either drive the new initiative, or to maintain the primary business activities.

A skill-set gap.
Small companies trying to become mid-tier companies; mid-tier companies trying to break through to be large companies frequently face the same problem. The management team lacks some of the experience and skills necessary to take the company to the next level. An interim executive can provide that needed level of expertise for a season, taking the company to that new level, and coaching the existing management team along the way.

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For any company in an economic downturn, after slashing employees to reduce their overhead there follows a sobering moment of clarity. “How is the work going to get done? We just let go the only people that really knew how to do this (whatever “this” is) really well!”

I propose that interim management is an excellent solution, especially when the new gap is in a highly-skilled management role (as opposed to a low-skilled bureaucratic role).

So, the company can’t afford a FTE as head of marketing. Fine. Bring in a perfectly suited interim marketing executive for a couple days a week.

I had coffee with a former client last week. He had just been laid off. The company he had worked for needed to slash overhead due to the rapid economic decline. They let go the head of marketing and the product manager, electing to leave untouched a small department of marketing specialists. Who is managing this group, you might ask? They now report to a director of business development with no marketing experience whatsoever.

Cut backs are agonizing decisions and I’m not second-guessing the decision to swing the axe at the higher salaried managers first. However, what is to become of this very effective marketing group without skilled leadership? Imagine what just two days a week of expert marketing leadership could provide.

Something tells me this story is being repeated again and again all around the world. Interim managers, let us put on our capes and save the day.

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Chuck Besondy, Principal, OneAccord
512.692.9642
chuck.besondy(at)oneaccordpartners.com

For businesses today cash isn’t king, it is king, queen, and the Knights of the Round Table combined. Or, as we say in Texas, it is the whole enchilada.

Select your own metaphor, but cash preservation is top of mind for every board member, CEO and CFO right now. The level of uncertainty is off the charts, too, which adds extra incentive for a cash preservation strategy. What a great time to adopt an interim management strategy throughout the organization, especially in marketing and sales!

Let’s look at a typical example, simplified here for brevity.

For 2009 XYZ Corp had planned and budgeted to add two headcount in marketing and sales—a senior marketing person and a senior sales operations person. Both positions were in the same pay grade with a mid-range base salary of $140k. Fully burdened each position would cost XYZ $190k per year; $225k for each position in the first year when recruitment cost was included.

So XYZ was looking at a $450k investment in two key players in 2009. The CEO believed both positions were critical to the company achieving its revenue goals, but that was the problem. Confidence in the revenue target was shaky.

The company needed the two contributors on board ASAP, but frankly the CEO was concerned about making a $450k commitment when it was unclear what the revenue picture was going to be in the second half of 2009. Heck, the first half was foggy enough.

The CEO and CFO weighed their options.
1. Cut the two positions from the budget until revenue stream was more certain.
2. Cut one of the two positions until revenue stream was more certain.
3. Fill both positions and pray.
4. Fill both positions with interim managers.

What would you do? Would you elect options 1 or 2 and effectively fold your tent? What would the opportunity cost be? Would you choose option 3 and swing for the fences even though there was a stiff wind blowing into your face from the outfield?

With option 4 XYZ could fill the two positions and preserve cash. Let’s look at the math.
Assuming tightly scoped and highly prioritized engagements, XYZ could rapidly put seasoned interim managers into both positions for 6 months for about $250k. It’s a sound compromise that would see the highest priority tasks accomplished for 44% less.

A typical contract for each of the interims might look like this: 3 days per week at $1750/day for 6 months. Each interim contract is $126k, or $252k for the pair for the six months.

During the six months the critical aspects of each position will be accomplished, helping XYZ to reach its revenue target, but if business should suddenly worsen requiring staffing cuts the interims can be cut loose without any severance or HR issues.

Furthermore, mid-year the company still has the option of recruiting for FTEs, extending the interim contracts, or living without managers in those positions for the remainder of the year.

The interim management solution gets the job done, keeps XYZ’s options open throughout the year, and preserves $198k in the bank.

Chuck Besondy is a principal at OneAccord Partners with 25 years of marketing leadership primarily within small and mid-market software/Web businesses. He is co-author of Leadership on Demand: How Smart CEO’s Tap Interim Management to Drive Revenue and blogs regularly at One Riot-One Ranger. Chuck can be reached at 512.692.9642 or chuck.besondy(at)oneaccordpartners.com.

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What direction is best to build sales? Direct sales force calling on targeted accounts, or indirect via distribution or food brokers? Is there a way to assess situation before choosing one or more directions?

Great Question!

In short, an interesting strategy would be to blend both approaches. Specifically (1) in a market with a strong retail presence (high end…e.g. Norstrom) go with a direct sales model…the business volume will more than pay for the resources required; (2) in other “attractive markets” (…would need more info on your products and company to define) use a distribution channel model where you can be cost efficient by “piggy-backing” on an existing sales network….

Craig Lewis, Regional Managing Principal, Phoenix.
408.394.4514
craig.lewis@oneaccordpartners.com

Numerous scenarios are possible from this high level view and vary dramatically based on the type of confection. Here are a couple possible scenarios.

1. Both Direct and In-Direct via brokers have merit but require much more depth of information to recommend direction in this case. The primary issue will be the current cash position (or capital access) of the company. Direct sales organizations (especially when you have access to the talent) are my personal preference but require an up front capital investment. The key to success in such a venue is to hire people that have previous success and relationships with the target prospects. In-Direct is less expensive short term and can provide the instant relationship. The down side is you lose control of your brand and message.

2. Depending on geographic distribution, it is plausible that an in tandem Direct and In-Direct strategy are viable depending on distribution patterns and product make-up.

3. The key is relationships and finding a connection into the first, targeted account. The first one is gateway into the others.

4. Direct Response TV is an unconventional option if the product supports such an initiative. Building the brand first via alternative outlets is a prescribed plan by some buyers. They may desire customer demand before viewing the product seriously.

5. Overall an assessment would be the most prudent move and the depth would vary again based on organizational complexity, current distribution, competitive make-up, and product to name a few.

Darin Leonard, Regional Managing Principal, Seattle.
206.229.1187
seattle@oneaccordpartners.com

What’s the competition doing today? As noted above, there are numerous scenarios possible for this company. Without assuming too much, and depending on “what going national” really means to this $3M company, it all depends. It depends on how much capital the company is willing to invest and/or, how strategic they want to be with the right partners and/or distribution channels.

Regardless of the distribution channel(s), whether its high end retail direct or partnering with established high end distributors, consideration of how the product will be promoted to/through these channels will be key. Technology solutions also apply, along with an effective web strategy also.

Dave Swartzendruber, Principal, Chicago.
312.265.5843
chicago@oneaccordpartners.com

You are right to ask the question as the answers will be pivotal to both your short term and long term growth. The right answer will, of course, come from asking yourself not only the right questions but also asking them frequently.

A lot of your answers will stem from “How is the item positioned?” Upscale? Downscale? Superior quality? Great value? The reason your next steps might determine your short and long term growth potential is because how you position yourself now will carry you forward — or hinder your longer term success. In other words, how do you see your brand’s key benefits and exactly who will be your toughest competitors?
Also, try to understand what your “brand” is all about. What is the emotional connection your customers have with the product? What competitive attributes or factors are driving it? Where’s the real customer perceived value?

You are right to asses the situation before moving forward forcefully. Your direction hinges on the factors mentioned above, and you have ample time to test your alternatives now — much more so than you will later. Without knowing the details of your situation, I suggest you see if there are ways to test alternative distribution methods. Think of your current market and distribution as the center of the bulls eye and your expansion efforts will test each concentric ring as you grow from the center. It’s better to test a few smaller steps before you shoot for the national goal. Your core customer base may change as you expand.
Finally, the right development of your web site and effective “search engine optimization” and “search engine marketing” efforts will give you public visibility at a very low cost — at least until you ready for even bigger efforts.

At the end of the day, remember to look at the factors involved, analyze your options, create a profitable direction, and execute.

Effective execution and ineffective branding leads to many business failures.

Feel confident that you seem to be asking the right questions.

Jim Fisher, Principal, Boston
781.449.4333
boston@oneaccordpartners.com

Believe it’s essential for a small company to understand its mission & purpose in laying the foundation for how it wishes to approach accelerated revenue growth that will sustain over time. This informs the essence of the product and the organization to define the brand and how that brand will be perceived in the marketplace and with myriad stakeholders.

The sales development organization strategy will be guided by how the brand and company’s value proposition is to be presented to direct customer and channel partners. Whether through direct, indirect or multichannel strategies there are a lot of options today. But a strategic focus to sales execution will further organize the pathways to how the company wants to be merchandised and who the right retail customers and channel (indirect or food brokers) players/partners are to promote the premium value associated with the product.

Peter Klinge, Jr.
Regional Managing Principal, Salt Lake City
peter.klinge@oneaccordpartners.com

The key is the last statement “Is there a way to assess situation before choosing 1 or more directions?” The answer is “yes” and independent assessment must be your first step. An Interim Sales Executive solution, provides the experience to fully assess the situation, has the expertise to develop a comprehensive strategy and understands what skills are needed to best implement the designed tactics.

The “interim” position efficiently provides the executive level performance needed at this critical time, but does not lock the company into a long-term high fixed cost solution. The flexibility of the “interim” solution facilitates quick improvements to take advantage of market dynamics and insights that are learned sales call by sales call. Before you choose a direct sales or indirect sales path use an Interim Sales Executive to further clarify and assess all the factors involved in your opportunity.

Dale Hintz, Principal, Dallas
972.824.6923
dallas@oneaccordpartners.com

My experience in the food industry, especially given an organization that is trying to establish itself, is that you’ll both need and want a solid well recognized food broker. A smaller firm will rarely be in a position to grow fast enough nor even have the funding to grow organically at a pace that the market will require. This is a well established industry, and the historically successful food broker’s have the necessary existing relationships that will dramatically reduce the sales cycle, while additionally offering your firm a variable cost model, both critical to early growth.

Michael Pearce, Principal, Los Angeles
425.830.4156
michael.pearce@oneaccordpartners.com

Choosing the right channel for your product will make a significant impact on your revenues and success, so you are right to think it through. Start by looking at the universe of channels.

There are three channel categories and here is the purpose of each: 1. Direct (Field Sales Force) – Good for complex sales, when control over the sale is required, or high-touch service is needed. 2. Indirect (Partners) – Good for lower cost sales, complete solutions, when local customer care is required, or you want to increase your reach in a given market. 3. Direct-to-customer (i.e. telephone, mail and Internet) – Lowest cost channels, maximum reach, efficient for simple items.

Create a coverage model by thinking of a grid with customers’ needs on the left and channel options across the top. Rank the channel options based on customer needs and you have your first stab at a coverage model.

Remember to keep testing and refining. That’s how successful marketers stay successful. Good luck.

George Reinhart, Principal
george.reinhart@oneaccordpartners.com

For me knowing the target channel or account base desired to penetrate will help formulate the correct strategy. Typically higher end retail customers like dealing directly with the company they are buying from to establish a closer partnership and relationship. If this is the case then going direct might make the most sense. Assessing the situation first is dependent on a number of variables, i.e., company cash position and ability to invest into sales before results, short and long term goals, etc. Again depending on the short and long term goals it might make sense to look at a hybrid approach whereby direct sales is targeted to the channels that need the relationship, i.e., Nordstrom for direct sales. Use in-direct sales (brokers) to establish distribution to larger mass retailers such as Kroger or Safeway.

Richard Brune, Principal
Richard.brune@oneaccordpartners.com