Three Stage Survival Guide for the Independent Professional Executive, Consultant or Specialist

The SWOT-landscape systematically deploys the ...

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Some found my blog last week entitled “Interim Management:  Ten Emerging Trends and Outlook for the Future” a bit scary and I agreed to reflect on offering a few tips for survival.

To quickly recap on my conclusion from last week:

My worst case scenario would see a circa 50% contraction from 2007, expressed in numbers of professional interims, ISP consultants and SME ISPs.

Regrettably, I would classify all interims and ISP consultants who are not economically viable as casualties.

For sure, these are truly scary times for many but there is a rational or logical way forward for the independent professional and I am including interim executives, consultants and other subject matter experts.

Firstly, let me introduce my proposed three stage survival guide. It’s designed to try to eliminate fear by focusing on one of the three survival stages at a time. The three stages are quite simple and include:

  1. Preparation
  2. Knowledge
  3. Discipline

A. PREPARATION

For simplicity, let’s adopt the Merriam Webster definition of “preparation“, with the primary attribute being:

the action or process of making something ready for use or service or of getting ready for some occasion, test, or duty

Key step in preparation might include:

  1. A personal SWOT analysis (Strengths Weaknesses Opportunities Threats)
  2. Physical and psychological conditioning 
  3. Market research and intelligence
  4. Skills assessment
  5. Resourcing assessment, including one’s financial resources and other non financial assets, like one’s business or associate network, specialist expertise etc.
  6. Consider deploying marketing tools, like for example, web site, viral marketing, blog, webinars etc.
  7. Develop a personal survival strategy, including defensive or fallback strategies
  8. Deploy the personal survival strategy
  9. Refine the personal survival strategy
  10. Be ready to action a fall back strategy, if necessary. This might include a sabbatical or period out for personal development or extended travelling

B. KNOWLEDGE

Knowledge” is used in the widest sense, including full breadth of awareness, skill, intelligence, expertise and readiness.

Key steps in building a “personal knowledge” strategy might include:

  1. Brainstorming with a professional buddy or friend
  2. Develop a body of knowledge for your area of expertise
  3. Research best and emerging practice in your area of expertise
  4. Conduct a gap analysis between where you are and where you want to be
  5. Develop a strategy for enhancing your “personal knowledge”. For example this might include learning or developing language skills – see for example, the BBC online Mandarin course. Alternatively, your strategy might be to develop a specialized network. Perhaps you may wish to consider writing specialized articles or public speaking at specialized events?
  6. Become an acknowledged expert
  7. Be careful to focus your knowledge on themes that have been validated by your own market assessments and stick with your plan. For example, if you have determined that there will growth in  interim management in BRICS countries, you need to develop a viable strategy and marshal specialist “personal knowledge” to target this market
  8. Be disciplined and focus your knowledge enhancement in areas that directly support your own survival strategy
  9. Social media, like Twitter or LinkedIn, will provide some useful stepping-stones but be discerning and validate all information with multiple sources
  10. Do not waste time debating with professionals on LinkedIn subject sites, unless it directly supports your survival strategy

C. DISCIPLINE

Discipline” is the third element of the three stage plan. Try to focus on your three elements and not jump from one to the other.

Discipline is critical to driving out fear but be prepared adopt a fall back strategy, if required.

Discipline steps might include:

  1. Preparing a daily and weekly plan
  2. Tracking actual achievements compared to plan, understanding variations, identifying opportunities for corrective action, or in last or worst case, revising the personal plan
  3. Focusing on physical and psychological conditioning, so that you are strong enough to deal with variations to your personal plan
  4. Plan time for fun and relaxation
  5. Work with your personal buddy, mentor or trainer (this should preferably not a partner or spouse)
  6. Consider developing survival groups for more complex development
  7. Practice role-playing
  8. Develop “drills” for key activities, so that they can be handled expeditiously
  9. Try to stick to the planned activity focusing on one stage at the time
  10. Be ready to retreat, actioning a well-defined and planned fall-back

D. CONCLUSION

In my worst case scenario, fifty-percent of professional interims who were economically active in 2007 will probably not be fully economically active (as professional interims) in 2012. This applies to independent consultants and subject matter experts too.

The above structured three-phase survival guide is not a panacea but it is designed to optimise effort, reducing fear and anxiety. Obviously, it can be tailored to individual circumstances, with variation in the activities. It is simply designed to help the professional interim stay the course, or beat a planned and well-rehearsed, orderly fall-back or retreat.

As always, please feel free to share your views and provide suggestions for improvement. I would particularly like to hear about casualities and what they are doing to bring order following fall-back and retreat.

Interim Management: Ten Emerging Trends and Outlook for the Future

A. INTRODUCTION AND CONTEXT

The economic outlook has deteriorated significantly since I last blogged on emerging trends in interim management six months ago. Sovereign and banks debt concerns, plus political indecision in the US and Europe, has triggered extreme fear in financial markets.  Governments  seem powerless. Many genuinely believe that the World is out of control and in free-fall, so what of the cottage industry called “interim management“?

Based on my twenty years experience, at or near the top of the interim market, I have lived through many ups and downs. Using my own research and analysis (subjective and longitudinal), I have identified the following ten emerging trends:

  1. Framework agreements increasingly deployed
  2. Volume/high-street providers have chased rates and margins down to contract levels
  3. Selling by recruitment professionals
  4. Industry consolidation
  5. Social media and viral marketing
  6. Contingency workers
  7. Professional organizations have lost focus
  8. Convergence of professional services’ boundaries
  9. Integrity subordinated
  10. Economic & political uncertainty

B. TEN EMERGENT TRENDS

1. Framework Agreements Increasingly Deployed

Framework agreements have been extremely widely deployed in the Public Sector and are now getting more common in the Private Sector, especially in Financial Services. Framework agreements have tended to commoditize interim management and treat it like office temporaries or specialist contractors, like IT project managers, for example. In the eyes of the Cabinet Office, interim managers  are just another type of contingency worker.  Framework agreements have driven down rates and the selection process for the interim has become a simplistic, tick-box process.

In the old days, the interim was suitably over qualified and sold as having more than enough experience to complete the role. Under framework agreements, quality is essentially subordinated – this is to be contrasted with “traditional interim” where the provider often acted as the project manager, as well. Procurement rules, emanating from EU legislation have introduced layers of bureaucracy and inefficiency, with tenders, framework contracts, and commodification of professional services.

The Cabinet Offices’ Catch 22 rules have favoured big consultancies, who are now increasingly “one-shop-stops” for customers and contractors (with professional interims and intermediaries’ apparently out of favour with the Coalition Government).

Sadly, the real executive interim, true independent consultant or subject matter specialist, has been increasingly marginalized by bureaucracy (often emanating from EU legislation), and the powerful lobby of big consulting and the office services conglomerates.  

2. Volume/High Street Providers have Chased Rates and Margins to Contract Levels

High street/volume providers were initially attracted by the higher margins in interim management. Over time, the selling ethos of the high street providers chased business aggressively and this resulted in an erosion of margins in the industry. Recession and Public Sector cut-backs also put serious pressure on interims’ rates. For example, Public Sector roles that were commanding rates of circa £700 per day two years ago are now only commanding £250-£300 per day. For many years, the traditional entry point to interim was £500 per day.

Unfortunately, these days roles are being described as interim management but are often commanding rates of circa £250.

The consequence is that interim management and contracting have essentially converged, especially in the Public Sector, where everybody is just a contingency worker.

3. Selling by Recruitment Professionals 

The traditional interim selling model was adopted from the executive search industry. Indeed in the early days, many of the most successful top-end, interim businesses were also established executive search businesses. The search industry typically deployed experienced executives, who had reached board level in leading organizations and they were recruited for their contacts in specific sectors. Traditional interim providers used the same profile for sales consultants for their interim businesses – certainly in the early days. The traditional interim sales consultant would be prepared to stand his/her ground with the client and use his/her experience to advise the client of the ideal profile of the interim.

When the high-street providers arrived, they brought a completely different selling ethos to interim. The high street providers brought selling professionals from the recruitment industry – generally, they had no business experience outside selling recruitment. The high street sales professionals were generally organized by sector and picked up the language of the industry by talking to their clients. High street sales professionals were trained to please the client and brought a much more regimented recruitment style to interim, deploying powerful systems that were able to search CVs for a series of key words etc. In essence, the high street providers brought technical sales professionals to the interim industry – they were also heavily incentivized by commissions which strongly influenced individual behaviour.

Nowadays, most of the traditional interim sales professionals have retired, and the whole industry is largely dominated by people with a recruitment industry background – the keen observer might spot the odd, aging dinosaur but they  are probably not doing much business.

For the big recruiters/office services combines,  and, of course, the recruitment industry lobby,  interim/contingency working is just one of its product portfolio. 

4. Industry Consolidation

The interim industry has seen a series of waves of consolidation. Cash flow is vitally important and a number of providers ran into financial difficulty over the years. I would expect that many ISPs (interim service providers) are probably struggling with cashflows right now, with the absence of traditional bank finance. Many of the more successful traditional ISPs were sold to search or broad line recruitment businesses (inflated values were often paid for brands).

For some years, there  has been huge pressure on margins and reducing transaction costs, with marketing also becoming increasingly challenging. The internet, social media and viral marketing have revolutionized the business operating model. Broad line recruitment and consulting businesses are able to carry weak financial results from their interim businesses – so there is a special pressure on the pure interim businesses.

Nowadays, major consultancies and recruiters are aggressively downsizing, so the pressure is on everybody.

Overall, there is a strategic convergence towards the low-cost, broad line providers, e.g. Capita/Veredus on the one hand and the boutique or specialist providers at the other end. The specialist providers include top-end providers, like BIE and Odgers, plus the large number of one man bands – many of which offer excellent service. Mid ranking, non-specialist providers’ are being increasingly squeezed and marginalized, especially if they are chasing framework business. I would sadly expect some well-known ISP SMEs to disappear over the next two years. In the Public Sector, the Cabinet Office is overhauling the framework agreements and it is expected that this will lead to Tier 1 and Tier 2 providers. Tier 1 providers will probably be restricted to the likes of Capita or Hays. Tier 2 providers will tend to be specialists and only cut in if the Tier 1 providers are unsuccessful. This model is also already available in Private Sector. Over the last two years, the interim industry has downsized staff, losing both traditional sales professionals and the high street sales professionals.

Apart from weaker sales, reduced margins, and increasing costs, the smaller interim providers (SMEs  will now probably struggle to finance working capital, yet alone expansion and business development). SME ISPs will probably be struggling for survival over the next two years, and I would regrettably expect a significant percentage to leave the industry, with potentially extreme economic outlooks for SME ISP equity owners and sales consultants. 

5. Social Media and Viral Marketing

Social media has revolutionized recruitment over the last five years. Many organizations in both the Public and Private Sectors turn to LinkedIn or specialized networking groups before they turn to a traditional third-party recruitment firm. Leading recruitment firms, like Spring for example, have developed internet based business models and are very comfortable with margins in single figures. The same is emerging in interim. I hear stories of interim providers ready to accept margins of circa 5% and tied to results provisions, as well.

This is all a far cry from the heady early days when margins were typically 30% plus – but in those early days, the ISPs were offering a truly value-added service and not selling a commodity.

LinkedIn has also meant that many enterprising interims are able to develop and enhance their own networks, securing business without the need of the provider. However, it is Viral Marketing that promises to totally revolutionize interim management. Viral Marketing essentially gives the smaller player enormous marketing leverage. So far, few interims and interim providers have effectively deployed Viral Marketing. It is expected that there will be a “first-mover” strategic advantage for the player who is most successful with Viral Marketing. A good proxy of maturity in Viral Marketing is the effective deployment of Twitter. So far, for the providers, BIE and Odgers are showing the most promise, in my view.

6. Contingency Workers

The value-added of the traditional interim is being eroded by the commoditization of interim (as a product/service). The Public Sector is now referring to interim as “contingency workers”, in essence lumping executive interim and contractors in one class of procurement.

There is a trend for day rates to be the same as a pro-rata permanent salary expressed in days – in essence, this ignores the fact that the interim operates his/her own business with risk plus marketing, professional and administration costs.

Increased deployment of the term “contingency workers” is in essence seriously bad news for the interim industry, as it ignores the interim’s value-added proposition.

7. Professional Organizations Have Lost Focus

There are three UK professional organizations: (1) Interim Management Association (IMA); (2) the Institute of Interim Management (IIM); and (3) the Association of Professional Interims (API). Most leading interim providers are members of the IMA which is essence has evolved to become a recruitment industry organization – there are some notable exceptions of successful interim providers who have declined to join the IMA.

These days, the IMA is strongly represented by volume recruiters and there seems to be little appetite for funding the marketing of interim management – presumably, each provider has their unique marketing approach?

The IIM and the API are professional organizations for individual interims, both having associate and member status – in these difficult economic times, both the IIM and API are struggling to capture/retain members. Both the IIM and API have limited budgets to explore public relations and marketing interim management.

The three organizations (IMA, IIM and the API) often present divergent views – each is focused on membership and funding. Many observers have traditionally regarded interim management as a “cottage industry”. Unfortunately, “traditional interim management” is being marginalized with the industry’s concentration on growing/preserving volume in more junior contracting roles.

8. Convergence of Professional Services’ Boundaries

There is an emerging trend for professional services firms to become hybrids, with lawyers selling accountancy and vice versa, for example. Recent UK legislation will pave the way for supermarkets and banks to offer commoditized legal services as standardized products – they will likely offshore much of the process, taking advantage of labour cost arbitrage in India, China or Eastern Europe. Meanwhile, big consultancies have continued to be criticized for inflated fees and not offering value-for-money.

Traditionally, consulting firms dealt with strategy or planning, leaving implementation to the host organization and external specialists expertise like professional interims (PIs) – now consultancies are aggressively storming the implementation and delivery market, displacing the weaker, poorly branded PIs who are without access to lobbyists, despite the PI often being more cost-effective and a better all round solution than the branded consultant.  

9. Integrity Subordinated

Over my twenty-years as a professional interim, I have sadly seen lower and lower standards of professional integrity become the norm. Interims have often become chameleons willing to change their CV to land the assignment, irrespective of their real strengths and expertise.

When the “interim chameleon” meets the modern “replica ISP sales consultant” (who is an expert in Key-Word Analysis), we perhaps have the blind leading the blind and increasingly frustrating the end-clients?

The old days of ISPs really knowing a small, highly capable nucleus of professional interims are disappearing. Interim is now a sub-set of recruitment. With the increasing use of forums, like LinkedIn, many professional interims seem to be embellishing their credentials beyond their proven expertise.

Also sadly, many professional interims and ISP consultants seem to be ready to stretch the truth, rather than confront bad news and reality. It’s all a bit “Walter Mitty” or more blind leading the blind!

The traditional professional interim has long since been buried, or gone overseas to chase new challenges (the Cabinet Office sealed the coffin with Catch 22).

10. Economic and Political Uncertainty

With the combined sovereign and banking debt crises converging, and gross political indecision in Europe and the US, financial markets and terrified consumers around the World are looking at worse case scenarios of melt-down and 50% collapse in GDP in economies like Greece (following the Argentinian default a decade ago, 50% of the population were below the poverty line). Fear is feeding on fear. This weekend there is perhaps the most important summit since Breton Woods but already the divergent political positions of France and Germany, threaten to derail the publication of a credible plan.

Against this precarious backdrop, the professional interim sector is but an emaciated shadow of its proud self of a few of years ago. The Public Sector has Catch 22 controls, and whilst it’s aggressively downsizing, it will be politically embarrassing to deploy professional interims, except in very specialized roles. The racy days of interim in Financial Services are likely to face a train crash, with big banks forced to recapitalize and announce aggressive downsizing. Major Private Sector businesses are sitting on cash mountains, and prefer to repatriate funds to shareholders, rather than invest for the future – to be fair, the political uncertainty is leading to economic uncertainty, making the riskiness of investments a difficult call.

The latest view from the FT  is that there will likely be more “fudge” served in Sunday’s European summit:

Europe http://on.ft.com/pwT8cM

As far as the UK is concerned, the baseline outlook taken by the Chancellor in Plan A assumes growth and structural reform to the Public Sector. Plan A does not consider: (1) Recapitalizing banks; (2) Additional funding for IMF; (3) Additional funding for EU bureaucracy; (4) possible double-dip recession in the US; and (5) most importantly, “depression in the Euro zone”, resulting from Euro breakup or uncontrolled Euro breakdown.

C. OUTLOOK

Candidly, many traditional interim managers are either retiring or doing other things. The Golden Age of Interim was probably the 1990s. Some financially secure interims are retiring or taking an extended sabbatical. Many interims are looking to overseas markets in Australia, the Middle and Far East, either on an assignment basis or relocating their families. Younger and more desperate interims are jumping ship and taking permanent roles, if available – some interims are taking job seeker’s allowances.

Increasingly, I hear of interims prepared to “dumb-down” their CVs, and go after lower paid contracting opportunities. Others are offering their time to charities or wider voluntary sector. Many are struggling with their outgoings as austerity bites, and are happy to take on any casual money paying opportunity to augment the family finances and stretch out limited savings.

Against the above strategic, political and economic outlook, I must conclude that the outlook for interim management is extremely bleak.

D. CONCLUSION

My worst case scenario would see a circa  50% contraction from 2007, expressed in numbers of professional interims, ISP consultants and SME ISPs.

Regrettably, I would classify all interims and ISP consultants who are not economically viable as casualties.

I respect that others hold different views, and would invite them to be shared publically below.

 

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