Interim Management in China: A Solution During The Economic Downturn
By Frank Elzinga
A new approach to management…
Although China’s economy is still growing, slowly but gradually the traces of the economic downturn are reaching the Chinese surface too: MNC’s are slowing down their investment, companies relying on export see their sales volumes go down and even the foreign invested companies that have been on the ground in China for a long time are feeling the heat.
These days, more creative approaches are needed in order to lead companies in times of economic turmoil and to make sure the company will stay afloat until the tides have turned. The current global recession asks for solid China knowledge and experienced managers who have what it takes to change a company around.
Interim Management Solutions
In times of economic downturn we see more and more needs with our clients to employ people who ‘think out of the box’, dealt with restructuring before or a need for managers who can still drive sales in times of ever increasing competition and reduced margins.
At the same time most companies are very strict on their recruitment policies too, if they are still hiring. In other cases companies have hiring freezes, across the board, regardless the urgency of certain roles. Moreover the new 2008 Labor Contract Law has significantly reduced flexibility in the work place. The knock-on effect will make MNC’s much more cautious when recruiting Senior Executives and Managers. This is where using an experienced Interim Manager can be a real bonus, filling assignments for 3 to 6 months while the company takes its time to find the right permanent executive.
The use of Interim Managers is a common business tool in Europe and the USA, but is just starting to gain acceptance in China. There are many different situations where businesses can benefit from using Interim Managers including the obvious one of flexibility. China is about to enter a sustained period of business restructuring, mergers & acquisitions and rationalization. This is where experience really does count. Interim Managers have lived through and managed growth, efficiency drives, cost savings and large scale changes.
Managers on a mission
Most of our clients make use of Interim Management when there is an acute need. These acute needs arise typically after resignation, during turnaround or in a crisis situation. Interim Managers are available on a short notice, have the required skills and expertise and come with a blank, objective point of view. As opposed to Management Consultants they will actively run the business. They are involved in day-to-day operations while reporting directly to the client. Interim Managers are engaged for a specific project, usually with a fixed timeframe. Once the Interim Managers have successfully accomplished his mission both parties separate. The Interim Manager moves on to his next assignment.
Interim managers come from all backgrounds and industries but they definitely have one thing in common: they thrive under new challenges and the completion of a concrete assignment in a limited timeframe. They want to make their contribution to getting results while simultaneously developing their own competencies on an ongoing basis. The majority of them chooses this career path not out of need but out of desire. It is a proactive choice.
Frank Elzinga, J.M.Gemini
11 Comments » 11 Answers » 
Print
Email
April 10th, 2009 at 4:02 pm
Interim Management actually provides in many cases the kind of flexibility that current uncertainties may require. In our case, we are most often called to monitor significant changes and transformations for which, in addition to proper management resources, we provide the support and coaching of highly experienced Partners. With over 500 listed managers in China we cover most key executive functions and a lagre scope of industrial sectors.
Nicolas Ajacques
April 11th, 2009 at 4:42 am
Frank makes a very good point. But as well as providing “flexibility” “focus” and “wealth of experience”, in these “interesting” economic times Interim Management (or IEM – Interim Executive Management) also provides an extremely “cost effective” resource. At Peldon (www.peldon.net) we have also provided “mentoring” to often overworked and under resourced ex-patriate executives who simply need a “sounding board” to assist working their way through the difficult cultural and business issues that confront them in their day-to-day management of business.
Bob Partington
April 11th, 2009 at 2:01 pm
Hi, I am an experienced industry professional of some 36 years. A Member of CILT. I am seeking a new position and Interim is of interest. I live in Liverpool, England – however the assignment can be anywhere. Please contact me on gajg10@tiscali.co.uk Thank you. George Gibbons
April 12th, 2009 at 8:59 am
Frank, I am interested in hearing of any Interim Assignments in China. Best regards Jim
April 13th, 2009 at 7:37 am
Frank, thank you for coming up with the comparatively new concept on the use of Interim Mgt.
But just as you mentioned “The use of Interim Managers is a common business tool in Europe and the USA, but is just starting to gain acceptance in China.” In China, this kind of Interim Mgt is very popular in some project-oriented assignment, but not for other functions.
As for the top mgt level people, they dont change job very frequently. As employers in China have absolutely different perception on changing job than the ones in US or Europe, so most mgers in China prefer longterm development, keeping comparatively conservative and cautious attitudes.
April 14th, 2009 at 5:36 pm
Frank, excellent post, I think we are really going to see a hot market and for interim managers in China. I’m interested to see how this develops.
April 14th, 2009 at 10:23 pm
Companies and government agencies are increasingly turning to interim managers – experienced executives who parachute in for a few months – to help them cope with challenges thrown up by the recession.
Some employers need operational restructuring, some want help negotiating with lenders and suppliers, and others are seeking human resources experts to lead them through layoffs and reorganisations.
Hiring an interim manager as a troubleshooter allows boards to supplement or temporarily replace existing management with someone with experience of the problems they are facing.
Interim management started in the 1980s as laid-off executives made themselves available to cover high-level illnesses and maternity leave. It grew as private equity firms and other corporate acquirers brought in temporary executives to help them get a handle on purchases.
Now the market is changing as many companies face recession for the first time.
Ian Gray, of Lyndhurst Associates a renown turnaround specialist, has worked for seven retailers in the past 12 months, including his most recent assignment advising Robert Dyas, the high-street retailer of home and garden products.
“When you are in trouble as a company, it’s probably the only time you’ve been in trouble. But [troubled companies] are all going to have the same problems and they are dealing with the same players so it’s very easy for me,” Mr Gray said. “I know how it is going to play out.”
Ian Gray fell into interim management nearly 20 years ago after a stint as chief executive of Tottenham Hotspur, in which he focused the troubled company on its core football and merchandising business.
Since then, he has jumped into dozens of companies, usually as senior adviser to existing management, although he has been known to take an official position if the executives are not up to the job. “I got excited about doing turnround and restructuring,” he says. “I also get bored easily.”
His expertise spans many sectors – everything from retailing and media to construction and engineering. But his assignments are universally short term. One recent stint lasted just four days, although others can span several months.
Mr Gray is part of a growing cadre of interim managers – executives who chose at some point in their lives to make a career out of temporary assignments. Most have previously served at board level in their chosen area of expertise, whether it is finance, operations or human resource.
Many recently laid-off executives are also expressing interest in temporary positions as a way to ride out the economic storm. “I’m getting calls from people saying, ‘Can I work with you?’ or ‘Can you introduce me to people?’ I haven’t had that since the 1990s,” Mr Gray says.
April 16th, 2009 at 6:41 am
Interim Executive manager can be indeed a good solution for a short term in order to recover some of the problems of the company.
There are 2 issues that need to be considered though:
1) If we are talking about company operating in China, sending an interim manager who comes from overseas with no or very little experience in the Chinese market might not bring the expected results and, in some cases, might make things even worse rather than solve the problems
2) If the company’s problems lie within many functions, even a very capable Interim Manager with an outstanding experience in the Chinese market might not be enough to fix all the problems.
At PTL Group, we not just hire an Interim Manager for a specific task, but also supply him with a team of specialists in the fields of General Management, HR, Finance, Admin and Logistics, which act as his Advisory Board for the whole Interim recovery period. This increases his chances to address many problems at the same time without being flooded with endless amount of issues. The Head of the Advisory Board is reporting directly to the HQ with the progress of the process so the responsibility is also shared between the Interim manager and the Advisory Board.
April 17th, 2009 at 2:41 pm
Nice article but you seem to have ignored the legality of such occupation and China-specific characteristics. For a foreign interim manager, on what kind of visa are you going to bring him in? To get a working permit and a residence permit you need to produce a contract, and an “interim” contract will not go well with the various Chinese departments.
For Chinese interim managers, how to arrange the various contracts, social security, tax etc. issues?
Same thing as for hiring interns, as long as this won’t be clarified by the local authorities, not only would that be a HR nightmare, but this will also be on the limits of illegality in China.
April 21st, 2009 at 11:01 am
I agree that interim management can make an immediate impact. Drawing from my 20 year experience of Eastern and Western business culture and practice, it would be a challenge for interim managers from the USA and UK to observe business etiquette and gain quick buy-in in China. And don’t forget to pass on the skills and knowledge after an assignment.
April 22nd, 2009 at 3:05 am
The points about visa practicalities can be overcome by a slight change in business model – the agency can act as the employer/sponsor. Or else the China committed interim manager can set themselves up as a foreign business.
The points about inexperienced interims struggling in China are well made. A Chinese management will genuinely desire and hire a westerner to introduce ‘western business approaches’ and would appreciate the classic interim’s skill to ‘hit the ground running’.
But in practice Chinese business relationships have to be earned slowly and thoroughly to gain trust. Without trust the Interim will struggle to deliver benefit or change. Unfortunately, interims are typically brought in during periods of high tension, which is not a good context for learning the subtleties of succeeding in China. The resulting frustrations on both sides should be anticipated.
Arie’s concept of a board of advisors sounds like a good compromise, but the ideal is to have support networks (formal and informal, Chinese and foreign) developed over a longer period of time.
Finally, I was assured two years ago that there was not and would never be a market for interim management in China. This article and the comments show how quickly things can change. And that is why I love China!
Simon Teale
simon@teale.org.uk