Boyden’s Partner Spotlight shares expert knowledge and views from our Partners across the globe. This edition is a discussion with Georg Larch, Global Co-Leader, Interim Management and Managing Partner, Boyden Germany. He shares his insight into how the pandemic has spurred the growth of interim management worldwide and the value of interim managers in protecting cross-border investment.
Georg, what impact has the pandemic had on interim management?
Given how much pressure organisations have been under, we have been surprised at the number of clients extending interim engagements and seeking new interim managers. In fact, all consulting firms are busy, in both strategy and leadership & talent, as clients press forward with change, transformation, and digital projects. In a difficult economy, people will find ways of doing business and interim management has been an effective way of keeping up momentum and in some cases accelerating change.
For interim managers themselves, one of the biggest changes we have seen is working remotely or from home. This has never been the case before and we would have expected this kind of change to take years. Instead, it took two months. During the pandemic, almost all existing engagements continued and organisations are now more flexible in how interim managers deliver on their mandates.
Interim managers are often engaged to manage restructuring – how much of this are you seeing?
We did anticipate an increasing number of restructuring needs, but this hasn’t been the case. The German economy is doing well and the uptick in automotive has provided a boost. We may see some restructurings in the autumn, but this is a market that is hard to judge and not behaving in the same way as before.
In what way is the market behaving differently?
Travel restrictions mean that we are doing more cross-border assignments, for example working with clients headquartered in the UK who cannot send senior leaders to Germany and therefore rely on us to find the right interim manager in their place. Face-to-face local engagement is essential to ensure both parties have an equal understanding of an organisation’s goals, culture, and direction, particularly with change projects. We have similar situations with German clients who have subsidiaries in the US and also in China. They need experienced leaders on the ground they can trust and communicate with to protect their international investments.
How does that work?
Having an interim manager on site means that they can ‘translate’ between the two cultures, reframing a challenge and stating it clearly for both parties. There is a high level of reassurance because the interim manager is entirely objective and has no agenda beyond delivering the right outcome for the headquarters and the subsidiary.
China is interesting; it can be a high-risk market, due to organisations not fully understanding how it works. A number of companies have lost significant investment, and with expats in the market who can step in, interim management is recognised as a valuable solution. The country is also suffering from low vaccine protection rates and regulations are still strict. Only business travel is allowed but this is hard to manage because no one has time to isolate for the required period.
How does all of this impact your work at Boyden?
As clients increasingly understand the value of interim managers, our search and interim teams work more closely together, coordinating different talent solutions across all sectors, particularly industrial in Germany of course, and financial services.
Globally, interim is a growth area for Boyden, as we respond to client needs around the world. We have interim capabilities across Europe, US and Australia, and we are extending our expertise in the Nordic region, as well as in Belgium and Italy. In helping our clients through the pandemic, Boyden colleagues shared the effectiveness of interim management across our global teams and this is resulting in greater traction worldwide.
What about other markets such as the United States and Eastern Europe?
Labour law is very different in the United States and resignation periods are shorter, so some states are becoming more open towards interim management.
Eastern Europe is also a major opportunity with its big production facilities. It takes time to understand the talent pool and know who to trust. In this region, managers tend to leave abruptly if they have a better opportunity, and interim management is an effective way of maintaining production, in terms of both quality and output.
How do you describe an interim manager?
In some markets, like the UK, most interim managers are ‘purebred’: they have chosen this type of work as a career choice. But in Germany and other markets, interim managers can also be senior leaders who have decided to become ‘independent’ for the latter stage of their career. The pandemic also meant many executives spent more time thinking about their future and decided to pursue a more flexible work life.
Interims can also be CEOs who are available following the sale of a company, open to different assignments before going back to a permanent role. These leaders are often engaged by private equity firms, which have a growing influence on the market. They understand that finding the right leader will take time, so they increasingly engage interim managers.
Lastly, how did you get into interim management?
I studied economics before joining Accenture, where I developed my consulting expertise. I then co-founded a venture capital-backed start up and after selling it I stayed at the buyer’s business for 10 years, helping to take it from a €50 million to a €350 million company. When I left I worked in interim roles, and found the combination of consulting and interim experience had created the right path for me to provide interim consulting services to clients.