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As forecasts for the growth of the global economy nudge upwards, according to the latest health check by the Organisation for Economic Cooperation and Development, the market for highly skilled interim managers with international credentials is increasing. Many of the world’s biggest organisations are planning for acquisition and expansion into new jurisdictions. Their challenge is to find experts with an in-depth understanding of the local market as well as the operational and leadership skills needed to manage major change.
We asked our IXPA partners around the world for a snapshot of their local interim management market to build up an international picture of the current shape of the industry and a forecast of future potential.
The interim market is still very much in its infancy in China. Our partner in China, Mick McGeehan, works with his team across four offices in Shanghai, Beijing, Guangzhou, Shenzhen. He also works with IMS colleagues who are based in Hong Kong, Singapore and Thailand.
“If companies are looking for someone for six months or a year it is usually for a definite project, for example moving from a joint venture to wholly owned organisation,” explains Mick. “We don’t really see anything in the way of change management here, partly because of China’s stage of development and partly because of the business ethos.”
Mick believes the key potential for growth lies with international companies that have bases in China and the Far East and those looking to invest in the region.
“Large organisations with headquarters in the US or Europe that have offices in China are familiar with interim solutions and if they identify a problem within their Chinese or Far Eastern operation they will bring an interim in to resolve it,” says Mick. “Likewise, if an overseas company is launching a start-up operation in China and the Far East it’s more economically viable to place an interim who is based over here than to send someone over for a year to set everything up. We have a lot of expertise in this type of work and this is a huge business development opportunity for us.”
Europe is the birthplace of interim management and this is where the market is most mature. It is particularly buoyant in the UK, Netherlands and Germany but the sector is also very strong in France, where it is worth an estimated €285m a year according to latest research.
“Around 50% of French companies will use an interim management solution at some point, with the majority of these looking for an individual to fill a specific skills gap and the rest seeking support to address a strategy situation,” says Gilles Marque of Actiss Partners.
Gilles believes that interim management is most effective when it is seen as a solution rather than a resource, a view that is shared by our partner in the UK, Mark Kitchen of Williams Bain.
Mark says: “We know we can be most effective when clients come to us and talk about challenges and desired outcomes rather than asking us to fill a specific role.
“Once an organisation understands what their challenge is they recognise the benefit in having an agile and dynamic expert in their midst who will be able to hit the ground running and make a difference quickly,” he explains.
“This is interim management at its best and our ability to bring in an individual with a proven track record in managing the business issues being faced, along with the personal skills to operate at the very top level of an organisation, leads to the kinds of successes that are helping to advance the interim ethos in the UK and Europe.”
In the UK, public sector work makes up about a third of the interim management market whereas in Germany there is no public sector element at all. Harald Wachenfeld, founder and German partner of IXPA, says the automotive industry, plus machinery and plant engineering, are a major source of interim work. The total German market is worth € 2 bn.
“Germany is very strong in manufacturing and export and is home to large organisations such as BMW, Mercedes Benz, VW and Siemens, all of which employ thousands of people and have massive overheads,” explains Harald. “An interim can make a huge difference to the bottom line through restructuring and transformational change and this, combined with the fact that German business is very solution orientated, means the interim market is flourishing.”
The interim market is also thriving in Belgium and also in Austria where our partner Maria Buehler of Buehler Management works closely with companies to deliver hands on executives for turnaround projects, management de transition and restructuring. Austria hosts many regional headquarters to access the Eastern European Countries, which have an extended need for temporary management resources.
Other European countries, such as Italy, are still immature markets in terms of interim management. In Italy, for example, where most businesses are small to medium in size and concentrated in the Lombardy region, our partner Eric Gaulle believes there is huge growth potential as businesses begin to recognise the benefits of seeking external help.
Within Africa, it is South Africa which presents the greatest opportunities for international interim provision. Interim management is very new here and our partner Ambroise Baroan has the task of evangelising the benefits.
“Businesses are very open to the concept but not necessarily ready to invest in it,” says Ambroise.
When you consider that there are only around 600 big companies in South Africa compared to around 12,000 in Germany, the market is smaller but there are many subsidiaries of foreign companies, particularly in sectors such as oil and gas and food production.
“The market is growing quickly and we’re at the very beginning,” says Ambroise. “People are very business minded – they just need the confidence to hand over the keys to an interim and let them take the driving seat.”
Interim management is a growing mindset in the USA and for our partner Reese Bourgeois of Flow Consulting, it has grown from his long established management consulting business.
“Interim activity now makes up around 20-40% of our work and tends to be tied to our consulting projects, coming out of our coaching work,” says Reese.
“Our objective is to generate quantifiable results, reduce cycle times and improve productivity and our consultancy background means that we do that in a very proactive way. We put someone in with an edge and because we understand the issues and challenges, we can specify exactly how much difference they will make. We’re also heavily involved during that interim process, talking to the manager nearly every day and the client each week to make sure they’re getting the result they expect.”
Reese sees the potential for significant growth in the interim market in the USA, particularly from international work. Currently 95% of his business is with US based companies and he anticipates a greater share of work in the future will be with European companies operating in or expanding into the US.
One of the key messages to come out of our review of the global market is that business is rarely carried out within a single jurisdiction. Our partners frequently bring together experts who work together on projects that span different countries to bring local knowledge and specific project expertise to the situation. Harald says: “We have a fantastic opportunity with IXPA to work with partners around the world to deliver results for clients operating internationally and this in itself is a growth driver for the global interim management industry.”