Noel Quinn, a fan of Peaky Blinders and interim chief executive officer of HSBC, is making significant changes at the bank. Far from ‘just managing for the short term and deprived of the powers of permanent office’, he’s acting as an interim executive can – deprived of the shackles of business politics.
This is a classic transition leadership role – incidentally ripping to shreds HMRC’s one-size-fits-all IR35 tax. John Flint left abruptly in August last year. What other options were open to HSBC than to bring in an interim CEO? No-one internally was ready. No-one externally, only interested in longer-term careers, wanted the poisoned chalice. Far from being steady-as-it-goes employment, this is hardcore interim management. The experienced interim executive will manage necessary changes, deal with crisis and make key decisions, enabling handover to a longer-term employee.
To make the changes, Mr Quinn must remain emotionally and politically detached from permanent career aspirations at HSBC. Otherwise, he won’t have the courage to make the big decisions necessary for HSBC’s long-term sustainability. Being an interim executive is not being seen to do the ‘right thing’ – it’s doing the right thing. It’s a tough career, and not for those wanting steady job progression.
Andrew Hill, in his excellent piece in the FT, writes that ‘bad stuff happens during an interregnum’. In many cases, the ‘bad stuff’ is brought on by previous, unsuitable management. The question to ask is – what price not bringing in an interim executive to lead the transition? The poison must be drawn and decisions on the future need to be made by someone experienced at taking the reins during challenging times.
Whilst performance has been demonstrated in some situations to deteriorate, as in Ballinger and Marcel’s 2010 paper, Woods and Diprose in their 2019 paper found that the correct positioning and sponsorship of the interim in the company is a factor in the effectiveness of this transition of leadership. Elevating the interim CEO to chairperson moderated the impact of this type of succession on firm performance and long-term firm survival. When afforded such a position of influence, the interim can leverage their position power to reduce uncertainty and enforce appropriate behaviour within the top management team. The value of the interim is apparent in the prevention of potential company performance dips.
Whether Mr Quinn is CEO or Chair, as long as he has the backing to make the right decisions, HSBC will live to fight another day. Great interims always do themselves out of a job and Mr Quinn should be no different. It’s questionable that the person able to handle a crisis is the right person to handle business as usual. Woods and Diprose in their 2019 paper introduce the interim assignment cycle. All successful interim assignments should have an agreed brief, an entry period – where rapid credibility is established, a delivery stage followed by a comprehensive handover and agreed exit date. This prevents an interim overstaying their welcome too. Mr Quinn’s lasting legacy – and interim career, is intertwined with HSBC’s future success. It’s perhaps the greatest leadership trait of all, to pass on your experience and know when to handover and move on.