Interim leadership: Delivering results through trust and integrity

Synopsis

Global challenges are shortening CEO tenures, creating leadership gaps. Interim managers offer a solution. This practice, seen in ancient Rome and religious institutions, is now a recognised professional service. In India, interim management emerged post-1991 reforms, gaining traction with private equity. It provides experienced leadership for rapid stability and growth amidst volatility.

The mainstreaming of geoeconomics, growing dichotomy in the international rule of law, shifting sands of climate and energy policy, and rapid rise of AI with its associated FOMO, have created significant challenges for the C-suite leaders.

These pressures may exacerbate the trend of shortening CEO and CFO tenures and hasten resignations or separations. In some cases, this could lead to leadership vacuum at critical moments for the organizations. Engaging interim managers may be a viable solution in such scenarios.

Interim management, especially in India, is seen as a phenomenon that came into being recently. Some sections of the corporate world consider it as a concept that is not amenable to Asian conditions. However, interim leadership has been in existence for centuries in varied forms, across institutions and geographies.

Oral history from the Roman Republic presents us with an example of the perfect interim leader. Cincinnatus was a consul in 460 BC in the early Roman Republic. After his retirement he returned to farming. However, when Roman forces struggled to defeat the Aequi tribe, Cincinnatus was requested to take charge. He achieved a swift victory in sixteen days, relinquished power and returned to his farm exhibiting an essential interim leadership trait of selfless leadership in the larger interest of the organization.

Moving forward in the interregnum from oral history to the first traces of recorded history. An interrex was an interim appointment in the Roman republic though it is said that the tradition dates back to the Roman kingdom. Granted consular authority, their primary task was to oversee the election of new consuls when the sitting consuls had been unable to do so.

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In another sphere, at least two influential religious institutions regularly use interim leaders. The Catholic Church has a position called the Camerlengo, though his responsibilities have undergone a change over the centuries. The Camerlengo is the keeper of the Pope’s last will and serves as Vatican City’s acting sovereign until a successor to the Pope is elected. Functioning as an executive director, the Camerlengo facilitates the operation of Church institutions, including preparations for the conclave that will elect a new pope, and is answerable to the College of Cardinals. In management jargon, this is akin to an interim CXO who reports to the board, maintaining operations whilst the search for new leadership is underway.

In the East, a similar practice is found in Tibetan Buddhism. Historically, the Dalai Lama held the political and religious leadership of Tibet. Upon the death of a Dalai Lama, it is believed he reincarnates. After a search based on omens and tests, a boy is identified and ordained as the next Dalai Lama. During the interim period, a regent acts as the political and religious leader until the new Dalai Lama is old enough to assume the position formally. In the future, however, such interim periods are likely to face even greater difficulties, given the increasingly hostile geopolitical environment surrounding the institution of Tibetan Buddhism.

Numerous examples of interims can be found amongst the erstwhile kingdoms of India. These interims were typically blood relatives, primarily queen mothers, who governed on behalf of their minor children and therefore do not strictly qualify as interim leaders. However, one example stands out for being unrelated by blood, Muhammad Bairam Khan. He served as regent, teacher, mentor, and advisor to the young Mughal emperor Akbar, who was not even fourteen years old when he ascended the throne.

Beyond the vestiges of kingdoms, Interim Management, as it is now commonly known, was first introduced in the Netherlands in response to long notice period requirement for employee terminations. The concept quickly revealed numerous unintended advantages; an execution based hands-on approach in contrast to the hands-off consulting advice, access to experienced leadership, boots on the ground presence where required, an objective external perspective, outcome orientation, success-based remuneration, and rapid deployment as well as exit.

Moreover, the pragmatic workaround soon metamorphosed into an institution built on trust and integrity. This was because the circumstances requiring interim leadership inherently required these traits; sudden C-level departures, functional leadership vacuums, shareholder disputes, corporate turnarounds, and the need for independent leadership amidst organizational distress.

In India, the interim management role was shaped by the country’s legal, labour and business environment, entering the lexicon post the 1991 reforms. The 2008 financial crisis provided further impetus, primarily to strengthen governance and controls. Thereafter, the private equity funds have acted as catalysts in popularising the role, emphasizing ownership, execution and measurable outcomes.

It is expected that interim management will gain prominence amidst the growing complexities confronting CXOs in today's global maelstrom. This is likely because a steady stream of nascent success stories is visible, which will convert the few, not yet on an interim bandwagon. Also, a crisis will reveal organizational leadership gaps that would demand a swift remedy. Interim managers, who excel in non-standard environments, deliver rapid stability, nurture emergent leadership, and chart roadmaps for sustainable growth will be successful. Finally, interims’ success hinges on unwavering integrity and trust; qualities that support the organizations amidst volatility and pave their way for growth.

The author is an interim leader and a restructuring professional

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(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)

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