What is an Interim CEO?
An interim CEO is a temporary chief executive officer.
How Does an Interim CEO Work?
A CEO oversees the entire operation of a company or organization. In some organizations, the CEO is called the president, the executive director, or even the chief administrative officer. (Many times, an organization will have a CEO and people with these titles, too.)
A board of directors will appoint an interim CEO if its current CEO dies, quits suddenly, or is suddenly fired. The interim CEO usually puts 'interim' in his or her title to signify that the job is temporary or unofficial. The CEO “serves at the pleasure of the board.”
Like all CEOs, interim CEOs have four responsibilities.
- Optimize financial performance. The interim CEO determines the company’s financial direction, goals, and results. The interim CEO works especially closely with the chief financial officer to make good capital allocation decisions and set up good financial measurement systems. The interim CEO also leads a capital-raising team that finds money for expansion or other necessary activities.
- Optimize overall strategy. The interim CEO sets and maintains a mission and vision for the company. This ultimately dictates the products, markets, and strategies the company adopts. The interim CEO also has a variety of direct reports (the senior management team) that he or she must hire, develop, listen to, and even fire if necessary.
- Develop corporate culture. The interim CEO sets the cultural tone of the company. The interim CEO’s explicit and subtle messages in this vein have a large effect on whether a company is a good or bad place to work, which in turn drives the company’s ability to attract and retain good employees.
- Be the face of the company. As such, the interim CEO is a key figure in the company’s marketing, public relations and community efforts.
Why Does an Interim CEO Matter?
Interim CEOs are responsible for the success or failure of an organization, particularly in crisis situations, when companies need a steady hand. In many cases, an interim CEO’s daily interaction occurs with only a handful of people, and this can make it hard for an interim CEO to see the dark underbelly of a company, especially when direct reports are reluctant to give honest feedback. Regardless, the stakes are very high, and it takes a very strong person to do the job well.