Three Reasons Interim Executives Can Save Your Employee’s Loyalty

Three Reasons Interim Executives Can Save Your Employee’s Loyalty

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Executive leadership changes can happen for many reasons. Some organizations like to move recently promoted executives through a similar training path in the same business unit as they build a “bullpen” of leaders for succession planning. In other cases, an executive can decide to pursue another opportunity, or the executive can be terminated for performance reasons. No matter the reason, the impact on the organization can be significant.

The transition time between the loss of an executive team member and the placement of a new executive can be extensive. When an executive quits, there may not be an internal candidate immediately ready for the role. The importance of finding a solid candidate that meets the current needs of the organization cannot be overstated. In the current hiring environment, the process can take time. When an executive is let go due to underperformance, the need to “pick up” the organization and help them win again is critical.

During this transition, employee anxiety can rise. Employees who are already on the fence about the long-term outlook of the company can see a leadership change as a sign that they should move on as well. The employee has many questions that they can’t answer. Will the next executive make overarching changes? Maybe the employee liked the previous executive. What if I don’t like the new exec? What if they don’t like me?

Also, if the organization has no solid plan for the transition, the employees can see this as a sign of disorganization or a lack of caring for the employee team. They may ask, "Why don't they value the team enough to ensure the stability of the organization while the search is on for a new leader?"

Employee anxiety and its effect on loyalty and retention is a complex issue that no company should ignore. When an executive leadership gap occurs, the use of an interim executive can save your employee’s loyalty.

Three Reasons Interim Executives Can Save Employee Loyalty:

1. Hiring an interim executive can indicate the company is proactive and values the perception of the employees.

Recently, a colleague of mine who visits manufacturing clients daily shared a story of an organization in transition after a change in ownership. My colleague had developed close relationships with many employees at that site, and they pulled him aside to express their frustration. Even several months after the sale had closed, several employees were deeply concerned about the company, specifically the leadership team. Communication had been poor. There was ambiguity regarding how long the executive leadership team would stay with the company after the sale and how the company vision might change. These employees felt they were in the dark and were not valued because they knew so little about the future of the executive team and the company. Many long-term employees had asked my colleague if he knew of opportunities outside of the company because they were just uncomfortable with the current situation. In this case, using an interim executive and making simple changes in communication style could save this company thousands of dollars in potential recruiting, onboarding and training costs that would be required to bring on new employees.

2. An interim executive can hold company results stable which increases employee confidence.

Even if the leaving executive is not a "fan favorite," their departure is still a loss to the organization. The outgoing executive has developed relationships with the internal leadership team, external customers and suppliers, vendors and others in the supply chain. When a gap in the executive team forms, a downturn in performance is a real possibility while a search is on for a replacement. Customers could decide to control volume while the transition is in place. The leadership team could struggle with maintaining daily operations without a key player in place. All this uncertainty can unnerve an employee group. Concern is accelerated if company performance begins to decline as well. Some companies decide to take the chance of poor performance but try to minimize the impact by quickly searching for a replacement executive that can mitigate losses as soon as possible. This decision is unfair to the company, the employees within the company and even the successful candidate. It is critical that an organization takes the time to hire an executive that is the right fit for the business' current and future situation. Ideally, if an organization can place a competent interim executive that holds the organization stable by creating business continuity with all the company’s stakeholders, employees will understand that there is no need for alarm.

3. Hiring an interim executive can save the morale of the leadership team.

If you spend even a few years in manufacturing in a leadership role, you will face a time when a peer either chooses to leave or is terminated from the organization. Over a 30-year career, I could give you many examples of leadership teams who struggled with handling a gap within their group. At times, I had a close relationship with the exiting team member while at other times, I was ambivalent about their departure. Each time, though, I knew that this would have an impact on the team and myself. Most often, the remaining team members would have their own responsibilities, plus they would be assigned some of the responsibilities of the departing team member. Sometimes, a temporary re-assignment from another business location was made to fill the gap. In every instance, the leadership team felt the burden of additional responsibility which added tension during the transition period. Essential team members were lost in some cases when they couldn’t imagine staying in a chaotic environment. Hiring an interim executive to take on gap responsibilities which would allow the remaining team members to focus on their job requirements and their employees will enable the team to continue to move forward.

Do you need to insulate your organization from the loss of employee loyalty from an executive leadership gap?

If your organization is facing an executive gap and you want to ensure that you stay ahead of employee loyalty issues, KM Shinn Consulting offers free consultations to help you navigate a difficult transition period by providing interim executive services. Schedule your consultation today.

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