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Deloitte’s report underlines the need for proven interim executives.

10th April 2017

Deloitte’s report on third-party contractors underlines the need for experienced, proven interim executives.

Deloitte, a large consulting firm, which recently polled more than 500 large companies worldwide, including 100 in the UK, found that 80 per cent of UK respondents said they used contractors to a significant degree.

According to Deloitte’s Kristian Park, “Third parties are increasingly relied upon, with this trend likely to increase. Unfortunately, management processes and technology that support the oversight of these relationships are not keeping up, creating an ‘execution gap’.”

The report offers some excellent analysis of the concerns organisations clearly have in managing an uncertain world. UK businesses are increasingly dependent on third-party resource to help them manage change, transition and enterprise wide programmes. According to the report, 53.3 percent of respondent organisations now have a “high or critical level of dependence” on external contractors, or what they term their “extended enterprise”. According to Deloitte, nearly three-quarters of respondents claim to have faced at least one third-party related incident in the last three years.

Organisations should continue to exercise strong governance and risk oversight when hiring in third-party contractors. These include consulting firms such as Deloitte, outsourcing and managed services firms, and of course experienced interim executives operating as limited companies. Each suits a different business situation, sometimes they complement each other.

The report serves to underline the necessity of hiring a contractor proven to deliver – and suitably insured to do so. If an inexperienced contractor is hired the risks to a client organisation could range from fixable to critical. These could include failure of a crucial system or process, financial risk or reputational damage, or simply having to start a project again. Far better to select the right contractor and pay the right level of fees for the right level of experience.

Whilst the Partners at Deloitte and other large consulting firms will promote the risk management benefits of large consultancy, hiring experienced interim executives can provide as much comfort, whilst having the edge in operational delivery.

Interim executives – a reassuringly rare breed.

Interim executives are a rare breed. Despite the legions of self-styled interims on business networking sites, in the UK they number tens of hundreds not tens of thousands. This serves as a quality bar. Those well prepared, experienced, insured interim executives who can demonstrate unquestionable delivery will outshine the masses.

Hirers of interim executives should consider the following to maximise the chances of successful programme delivery, whilst mitigating risk:

First, what generic interim executive profile increases the likelihood of a successful interim assignment? Hirers should look for:

  • Proven experience of delivering relevant projects and programmes;
  • Proven ability to handle a wide range of situations, often beyond traditional functional lines;
  • Proven ability to transfer knowledge, experience, and to successfully hand over a sustainable, stronger organisation;

Second, hirers should be fully aware of the third-party alternatives.

A management consulting firm will often offer a set methodology, may introduce less experienced staff to do the delivery work, or may even introduce the same interim executives available in the open market, with a hefty mark-up to lead delivery. Consulting firms will be expert in providing or confirming strategy.

An interim executive firm specialises in knowing all interim executives on the open market. This knowledge, their networks and systems are dedicated to linking clients with the best available interim executive – sometimes within hours.  Interim executives are expert in sense-checking strategy, then executing.

Avoid recruiters pedalling CV’s with ‘Business Transformation Expert’ all over them. They often aren’t and the recruiter will share none of the risk of introducing someone they haven’t properly checked out. You would be better to set your strategy properly with a large consulting firm first, then hire in proven interim executives to deliver it. Dividing your budget this way will give better returns.

Finally, a word on governance and risk management.

Part of the reason organisations quote for hiring a large consulting firm is to mitigate risk. Risk tends to be reduced by deploying experienced, proven resource into projects and programmes. It’s also reduced if the right type of third-party is hired for each situation. We’ve all seen large consulting firms being sued or exited from high-profile programmes for non-delivery or failure. We also often see so-called ‘interims’ hired, then exited rapidly once clients establish they’re not up to it. The difference is in who is actually deployed to do the work. Interim executives worth their salt have years of hand-on leadership and operational management experience, have proven themselves and, to reassure clients that any risk left is worth taking, are fully professionally insured.


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