December 3, 2024
Interim Executives and Organizational Culture
The departure of an organization’s leader frequently seems to come unexpectedly and at an inconvenient time. In the world of homeless services, this might include an executive director or shelter leader leaving just as the cold weather arrives or the extremely hot weather in the south. So, how do you fill the gap that has emerged?
Replacing an organizational leader is not easy and it takes time. Sometimes it can take six months or more depending on the economy, compensation, and the reputation of the organization. In the meantime, the organization needs to function and the assistance of an interim leader can be invaluable. In this article, I will examine:
The work of interim executives who can step in as experienced professionals and quickly assume the duties of the departing executive. These professionals have both the necessary skills and experience and they bring a fresh perspective and new ideas to refine the organization.
BUT
If there is a cultural mismatch between the executive and the organization then troubled waters may lie ahead. In particular, a poor fit may lead to tension among staff members, slowing of key initiatives, and complications during the transition period.
Interim Executives
There are times when an organization’s leadership will hire an interim executive to “hold down the fort” and at other times to effect change - even significant change. Additional benefits of hiring an interim executive can be reduced costs and flexibility.
Additional expertise and experience are often factors that an interim executive can bring to an organization. As experienced professionals, they can have considerable experience from previous roles and in various sectors and organizations, enabling them to bring fresh and diverse perspectives to your organization.
So, when faced with a sudden and unexpected departure of a key executive take the time to consider using an interim executive while you search for your permanent leader. Although it can be stress-inducing, some of the best outcomes come from what often appears to be a negative time.
Additionally, interim executives can help identify skill gaps and weaknesses within the organization’s leadership and management structure. Realizing these challenges allows you to make needed improvements for a more resilient and effective nonprofit.
Organizational Cultural
Defining Organizational Culture
Values, beliefs, practices, and processes are the foundation of an organization’s culture and how well the team functions. These factors influence decision-making, communication, and the overall atmosphere of the organization. An organization’s culture is pervasive and impacts from how meetings are conducted to how “wins” are celebrated and is the environment both leaders and staff manifest. When a culture is healthy it leads to a sense of belonging and commitment, and sustains motivation and productivity.
The Impact on Mission
Strong and durable cultures are pervasive and thereby help direct the organization. Alignment between the organization’s vision and mission encourages staff to work toward shared goals energetically and leads to staff pushing through to the next level. Conversely, an interim executive who is not aligned with the company’s culture may lead to issues pertaining to engagement or diminished motivation and may hinder an organization’s ability to fulfill its mission.
Influencing Organizational Outcomes
Healthy cultures lead to improved outcomes, client satisfaction, and ultimately a reduction in homelessness in your geographic region. In most cases, it is the culture that propels staff forward in the achievement of strategic goals.
Navigating Change Through Culture
An organization would not be considering retaining an interim executive if it was not anticipating change related to the appointment of a new executive. Even if an organization wants to maintain its current strategy a new executive will bring change. In times of change it is the resilient organization that can fare changes well. To that end, a resilient organization is an empathetic organization that adapts more seamlessly, is able to overcome obstacles and leverage change for the good and for growth.
A Significant Decision
Once an organization decides to appoint or retain an interim executive a decision needs to be made – whether to engage an internal or external leader.
Advantages of Appointing an Internal Interim Executive
Interim executives understand the importance of clear and transparent communication with all stakeholders, including clients, board members, staff, and funders. They can help ease any concerns or uncertainties while also providing updates on the organization's progress during the transition period.
Excellent internal interim executives may be stronger leaders as they already know what constitutes clear and transparent communication with the organization’s stakeholders. Easing concerns and uncertainty and at the same time providing straightforward updates is easier if the interim executive knows the organization and its culture. Some cultural examples include:
Already understanding the organization's culture, vision, mission, values, and interal politics can provide a smoother transition during the time the previous executive departs and the new executive is onboarded.
Established Relationship: Internal interim executives know the staff, clients, and potentially even board members.
Quick Decisions: Internal executives are able to make decisions quickly since they already know the processes for decision-making within the organization.
Alignment with Long-Term Goals: Being aligned with an organization’s long-term vision is critical and the interim executive should already be aligned with those goals.
Cost-Effectiveness: Hiring from within can be more cost-effective as it may reduce the time and resources spent on onboarding and training compared to bringing in an external candidate.
Cost-Effectiveness: Internal interim executives are, in general, less expensive than externally retained executives.
Disadvantages of Appointing an Internal Interim Executive
While there are advantages to appointing an internal interim executive, there are potential challenges.
Lacks Fresh Perspectives: Internal interim executives may have been conditioned to the organization and its culture which may limit the quantity and quality of fresh perspectives that are introduced.
Bias: An inherent risk of bias exists with internal interim executives who may struggle at times to address internal issues objectively. This dynamic may lead to favoritism or resistance.
Neglect Regular Duties: If the internal interim executive is expected to carry out their regular duties (usually a bad idea) their existing work or their new leadership duties may suffer.
Making Difficult Decisions: An internal executive might avoid making hard decisions, particularly if they involve colleagues with whom they have longstanding professional relationships.
Making Difficult Decisions: Making difficult decisions is always hard. Further, this dynamic can be even more difficult when colleagues are impacted by difficult decisions.
Perception of Change (or lack thereof): An internal appointment may be interpreted as the future will be the “same old same old”. This is less of an issue in healthy organizations and more so in unhealthy organizations.
When organizations face leadership transitions, selecting the right interim executive is critical to maintaining stability and driving progress. Appointing an internal candidate for this role can offer several advantages, such as seamless integration and familiarity with company culture. However, weighing these benefits against potential pitfalls is essential to ensure the interim executive can effectively guide the organization forward. Understanding the nuances of this decision can ultimately impact the overall success of the transition process. In the following section, we will explore strategies to balance the advantages and challenges of appointing an internal interim executive.
Ways an Internal Interim Executive Can Cause Cultural Disruption
Resistance to Change: Internal interim executives may find it challenging to implement new changes as they are already part of an ingrained culture, which can lead to a lack of support from staff accustomed to existing practices.
Perceived Legitimacy Issues: Colleagues may view the interim position as less authoritative, resulting in decreased respect or cooperation. This perception can undermine the interim executive’s ability to enforce decisions and drive change.
Reinforcement of Existing Conflicts: If the interim executive is embroiled in ongoing workplace conflicts their appointment can exacerbate divisions within teams disrupting workplace harmony and productivity.
Blurred Lines of Communication: The existing relationships between the interim executive and their colleagues might create confusion over formal channels of communication, potentially leading to miscommunication and disorganization.
Temporary Mindset: A focus on short-term solutions rather than sustainable, long-term strategies may manifest due to the temporary nature of the role, which may impede comprehensive cultural development initiatives.
Undermining of Core Values: If the interim executive prioritizes efficiency or internal politics over the organization’s core values, it can create a cultural shift that demoralizes staff.
Advantages of Appointing an External Interim Executive
Fresh Perspective: An external interim executive brings an unbiased viewpoint, offering innovative solutions that challenge conventional practices and stimulate progressive change.
Impartial Decision-Making: Detached from internal politics, external interims can make objective decisions based on the organization's best interests, enhancing fairness and transparency.
Specialized Expertise: Often hired for their specific skills and experiences, external interim executives can fill knowledge gaps and drive improvements in areas that require specialized attention.
Strategic Focus: Free from ingrained cultural influences, external interims are often better positioned to prioritize strategic long-term goals over day-to-day operational distractions.
Quick Implementation of Best Practices: With experience from various organizations, external executives can swiftly implement industry best practices, significantly improving efficiency and accelerating outcomes.
Catalyst for Change: Seen as change agents, external interims can break down resistance to transformation by introducing fresh ideas and fostering a culture of adaptability.
Appointing an external interim executive comes with a myriad of advantages that can significantly impact an organization's growth and adaptability, especially during transitional periods. While temporary in nature, these leaders can bring transformative changes that align closely with the company's strategic goals and vision.
Disadvantages of Appointing an External Interim Executive
Limited Institutional Knowledge: External interim executives often lack an intimate understanding of the organization's history, culture, and internal processes, which may impede their ability to make fully informed decisions.
Potential for Short-Term Focus: As their tenure is temporary, external interims might concentrate on achieving immediate results rather than considering long-term implications, which can lead to unsustainable changes.
Integration Challenges: Adjusting to a new organizational atmosphere can be challenging for external interims, who may struggle to build trust and rapport with existing staff quickly.
Higher Costs: Hiring a skilled external interim executive can be costly, especially when factoring in their compensation, potential recruitment fees, and expenses related to transitioning.
Resistance from Internal Staff: The introduction of an outsider in a leadership role can sometimes meet resistance or skepticism from staff, affecting morale and potentially creating an atmosphere of uncertainty.
Limited Time for Impact: With a restricted timeframe, external interims might find it difficult to effect meaningful change, risking incomplete or inconsistent execution of strategic initiatives.
Ways an External Interim Executive Can Cause Cultural Disruption
Imposition of New Management Styles: Introducing different leadership approaches may conflict with the existing culture, leading to confusion and resistance among staff who are accustomed to specific norms and methods.
Altering Established Communication Channels: Changes to how information flows internally, whether more centralized or decentralized, can disrupt team dynamics and create obstacles to effective collaboration.
Prioritizing Change Over Consensus: An external focus on rapid transformation might overshadow the value of building consensus, undermining team harmony and collaboration in favor of speed and innovation.
Redefining Core Values and Principles: Attempting to shift or redefine organizational values can create a rift between management and staff, who may feel disconnected from the revised cultural identity.
Impacting Employee Autonomy: An external executive might introduce more rigid control structures, impacting staff’ decision-making autonomy, which can lead to frustration and decreased motivation.
Disrupting Existing Workflows: Implementing new processes or systems may clash with ingrained workflows, potentially stifling productivity as staff adjusts to unfamiliar routines.
By understanding these potential points of cultural disruption, organizations can better prepare to integrate an external interim executive in a way that mitigates these effects and fosters alignment with their cultural values.
Deciding between appointing an external or internal interim executive is a pivotal choice for any organization seeking temporary leadership. An internal interim executive brings the advantage of familiarity with the organization's culture, processes, and team dynamics. This familiarity often leads to a smoother transition and quicker implementation of necessary actions without disrupting the existing workflow. However, the downside may be that internal candidates carry the risk of maintaining the status quo, avoiding bold or innovative changes that could be crucial to driving the organization forward.
Conversely, an external interim executive provides a fresh perspective that can be invaluable in identifying opportunities that internal candidates might overlook. They can challenge the existing norms and foster innovation, which may be critical for organizations looking to pivot quickly.
Despite these potential benefits, the integration of an external leader can face cultural resistance and may require a longer adjustment period for staff. Ultimately, the decision hinges on whether the organization prioritizes continuity and cultural cohesion or innovation and change.
Five Considerations When Choosing an Interim Executive
Organizational Need for Change: Assess the extent to which new ideas and approaches are necessary, especially if the organization is seeking transformation.
Cultural Fit and Adaptability: Consider how well the interim executive, whether internal or external, aligns with the current corporate culture and values.
Time Sensitivity: Evaluate the urgency of leadership needs—an internal candidate may execute more swiftly due to existing familiarity, while an external candidate might take longer to acclimate.
Perspective on Innovation: Determine whether the organization would benefit more from a fresh viewpoint that challenges existing structures or from continuity within familiar frameworks.
Impact on Morale and Motivation: Reflect on how the choice between an internal or external leader might affect employee morale, trust, and engagement within the company.
Summary
Selecting the right interim executive is a strategic decision that can significantly influence the direction and success of an organization. One of the primary considerations is the organization's need for change. If transformation and fresh ideas are necessary, an external leader might be better suited to drive such initiatives. Their outsider perspective can bring innovation and challenge the status quo, essential for companies aiming to pivot or rejuvenate their strategy.
Cultural fit and adaptability are equally important when selecting an interim leader. An internal candidate may seamlessly align with the company's existing values and facilitate a smooth transition by leveraging their understanding of the corporate culture. However, while an external candidate may face initial resistance and require time to adjust, they have the potential to push boundaries and promote significant growth by introducing new methodologies and practices.
Organizations must weigh the urgency of leadership needs against the advantages each candidate offers.
Furthermore, the impact on employee morale and motivation is crucial in the decision-making process. An internal candidate often brings stability and reassurance, enhancing trust and engagement among staff. Conversely, an external leader might initially disrupt morale but can invigorate the team by setting ambitious goals and energizing the workforce. Ultimately, the balance between continuity and change will guide the best choice to secure the organization's long-term vision and objectives. Balancing these considerations ensures that the selected leader not only meets immediate leadership requirements but also aligns with the broader strategic goals of the organization.
Here is a curated list of insightful books on organizational culture and the role of interim executives, each offering valuable perspectives and guidance:
The Culture Code: The Secrets of Highly Successful Groups" by Daniel Coyle
"Drive: The Surprising Truth About What Motivates Us" by Daniel H. Pink
"The First 90 Days: Proven Strategies for Getting Up to Speed Faster and Smarter, Updated and Expanded" by Michael D. Watkins
"Leading Change" by John P. Kotter
"Interim Executive: A Guide to Interim Management" by George Bradt
These books provide a comprehensive look at how effective leadership and a robust organizational culture can drive success, whether through permanent or interim solutions.