Interim management in Germany: prospects and experience

Since the end of the Cold War, a development that we see as progressive globalisation has taken hold. The principle of free markets has started to triumph all over the world and has had an impact on the jobs market. Unemployment has been successfully reduced in Germany, but this advantage has been paid for by the growth of the low-wage sector, which now makes up 20% of the employment market.

Some political steps have been taken in order to react to the shift described. These include Agenda 2010, which led to the deregulation of the employment market and which was economically justified, but which has also resulted in negative social changes. Similarly, the skills shortage due to the demographic trend is becoming more significant and the markets are constantly gaining momentum. Politics, business and society must therefore make more concerted efforts to find suitable solutions in order to combat the challenges described above. In a world which is turning ever faster, we need people who have made it their mission to support the companies with this momentum. Interim managers are used to reacting quickly to new environments and rapidly applying their expertise to various tasks. (Manfred Faber, owner of HR Consultants).

Interim management comprises the temporary employment of external managers to bridge vacancies, to build up knowledge which is missing or to combat crisis situations (e.g. the need for restructuring or financial recovery). Medium-sized German businesses, in particular, face demanding challenges in the light of increasing globalisation.

By employing experienced interim managers in a targeted manner, companies are not only able to overcome pending obstacles efficiently, but also adapt to future challenges in the long term. Dynamic markets are best met with dynamic solutions – with interim management. (Constanze Bräuning-Ast, Executive Partner, REM PLUS GmbH). The competitive advantage is that a company is able to draw on the right highly-qualified executives and specialists quickly. Typical interim projects in this context are:

– Classic vacancy: manager on a limited contract is brought into the company to fill a vacant position
– Work overload: available resources are not sufficient for ongoing and/or new projects
– Restructuring: activities such as short-time work, lowering of costs or company closures
– Changes in corporate structures: set-up and/or modification of corporate structures and/or processes

Accordingly, interim managers require a comprehensive management qualification and long-term professional experience. Alongside an excellent specialist knowledge, core skills such as entrepreneurship, situational management experience, persuasiveness, flexibility, resistance to stress and composure are also needed. This should be complemented by a talent for being able to integrate quickly and efficiently into the most varied of structures and/or cultures. Companies are therefore well-advised to use experienced interim providers when selecting suitable candidates. The pioneers in this industry can already identify the best candidates and have a well-stocked talent pool at their disposal.

According to a recent AIMP study, there were around 16,600 interim managers working in Germany in 2014, whereby the turnover volume will increase according to a forecast by DDIM (2014;1.35 billion euros; 2015: forecast 1.5 billion euros). This aligns with the estimation from Ludwig Heuse: the interim management market is developing steadily according to our current study, both from the enquiries and from the workload of the interim managers. It is important to have a well-functioning network. (Corina Hoch, attorney, Ludwig Heuse GmbH).

In summary, it should be noted that interim managers should be receptive to and suitable for the constant transition, because in practice there is no honeymoon period – such as a longer settling in period. Temporary managers must rather completely and
satisfactorily solve their customers’ problems within a defined time frame (generally three to twelve months). The advantages for interim clients are obvious:

– Immediate availability of management experts
– No long-term contractual obligations
– Defined, measurable project aims
– Clear budget and exact timescale

In 2015, interim management is increasingly becoming one of the mega trends which will shape the workplace and the working world in the future: diversity, transparency, autonomy, democracy and collaboration. For companies in need and providers, it is currently a matter of developing the utmost professionalism from existing experiences in recent years (e.g. with regard to processes, rules, quality). (Dr Harald Schönfeld, CEO, butterflymanager GmbH and Deputy Chairman of the Arbeitskreis Interim Management Provider, AIMP).

This management approach is therefore an obvious option which could entail opportunities for distinction and unique selling points, particularly for innovative small and medium-sized enterprises (SME): although this management approach is widely known in German corporations, it remains (at least today) unchartered territory for the German SMEs. Management summary: In a heightened, global competition and in view of an increasing shortage of skilled labour in Germany, a systematic, targeted use of interim management can contribute to the creation of competitive advantages, in particular for small to medium-sized businesses. As a result, this management approach is a strategic option, which offers SMEs the opportunity for distinction and
to extend a flexible and sustainable management structure.

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