Flexible Leadership for Uncertain Times

Management guru and longtime GE CEO Jack Welch once said, “When the rate of changes outside the company exceeds the rate of change inside the company, the end is near.” This year this observation is truer than ever before.

At your organization’s birth, it probably had a more limited scope than it does today. Focusing on the service or product that buyers wanted was how the company became successful. As companies grow they spend an increasing amount of focus on building and improving infrastructure like IT, HR and other support services.

As it becomes more challenging to maintain high standards in all functions while still focusing on core competencies that drive growth, seeking outside help becomes an attractive option. So when should you outsource services? The answer is not black and white – it continues to evolve.

Today, it’s generally accepted that organizations use a mix of internal and external services, even at the highest levels. As the economy has created a sustained era of uncertainty, many companies have turned to a new approach to investing at the highest levels of the organization: flexible leadership capacity. Simply stated, flexible leadership is bringing in operating executives on an as-needed basis to take on targeted management initiatives without incurring permanent overhead.

In-sourcing is also a decision
As you look at your organization’s needs, remember the famous words of Jack Welch cited above: outsourcing offers a way to remain nimble in a high-risk, rapidly changing business environment. At the support service level, outsourcing is a way to minimize resources devoted to non-core activities. At higher levels, it can help you complete an important initiative that you would otherwise lack either the capacity or technical expertise to handle. It can also help you accelerate progress toward strategic goals.

When considering flexible leadership, you must retain ultimate responsibility for the initiatives by overseeing the service provider to ensure they are fulfilling the services contracted for and are helping you adapt those services to your changing needs. The executive still spends time on the initiative, but the time required is vastly reduced by having a seasoned resource to manage the daily minutia.

Remember, deciding to manage every aspect of the business with internal management is also a decision. Complete in-sourcing means you are deciding to incur top salary talent on a permanent basis with a defined capacity that can only be expanded with the risk of executive turnover. The implication is that you accept certain constraints on leadership capacity and the inability to dramatically accelerate progress because of those constraints.
Budgets remain tight and business conditions are still too uncertain to warrant rehiring.

Deploying flexible leadership
The economic roller-coaster is old news but budgets are still tight, and business conditions are still too uncertain to warrant rehiring. These now chronic conditions have left many companies with a talent void – especially in staff capable of managing strategic projects. The answer for these uncertain times is flexible management capacity from an outside provider. These specialized firms can deliver highly experienced operating executives on-demand to integrate immediately into your management team.

Flexible leadership sits outside the domain of traditional outsourcing, addressing core initiatives and programs. It deploys extremely experienced executives whose level of expertise enables them to hold interim roles as “seated” executives for companies experiencing executive turnover. This level of skill enables a resource, or a team, to quickly understand and manage a critical initiative for a C-level executive who has too many priorities due to reduced internal staffing.

Competitive pressures haven’t reduced simply because our organizations became leaner; executives are under pressure to accomplish more objectives, priorities and initiatives than they can realistically deliver. At the same time, they cannot risk failure or a cost over-run and must make time to work with the Board, CEO and other top executives on mission-critical issues.

Getting started
When looking for an interim executive, look for operating experience – a “been there; done that,” capability. They should have previously been in the same role (CFO, CIO, etc.) as the executive being served so they will be able to offer an objective viewpoint on what resources will be needed to meet your goals. This level of experience should enable the flex leader to quickly see the “big picture” but execute at a highly detailed level.

Like a baseball “utility infielder” who can play a number of different positions, a “flex” leadership provider can take on an entire set of projects, managing inter-dependencies between them to efficiently deploy resources. The interim executive specifies what they need from your organization, making assumptions and inter-dependencies explicit. This makes it easier for them to achieve results with minimal demands on management’s time. This approach is an extension of the Program Management Organization concept, a mechanism for overseeing IT projects that has become familiar in recent years.

Flexible leadership deploys extremely experienced executives whose level of expertise enables them to quickly see the “big picture” but execute at a highly detailed level.

Among today’s forward-looking organizations, the model of on-demand, high velocity, flexible management capacity is an ever more popular option. These early adopters have achieved some impressive successes with this approach. “Fast follower” companies are starting to emulate them. This new model may well become the next “big idea” for results-oriented companies seeking to minimize fixed costs and maximize flexibility in an increasingly complex business environment.

Perhaps the lawyers are smarter than the rest of us
Flexible leadership is not a new idea in one key area of corporate life: legal. Legal is often one of the smallest departments in an organization because they don’t add internal staff to handle specialties like intellectual property and litigation. The person who manages daily operations also manages the specialist who goes to court. This is more effective management than assuming the role of Superman and personally tackling every area of law, no matter how time-consuming or technically demanding.