How can companies measure the effectiveness of an interim manager?

The metrics that I find to be most important are those that show ‘incremental’ gains (specifically net revenue and net profit) with an interim manager in place as compared with what would have resulted without him or her in the role. This requires having a clear understanding of the trends prior to the interim manager filling the position verses the results they achieve after they implement their plans.

Scott Philips, Principal, OneAccord
scott.philips@oneaccordpartners.com
(503) 913-2705

Effectiveness is a subjective word – First we must define what Effectiveness means and more importantly what does it mean to those have a stake in the interim manager?

Peter Drucker would say that, “Effectiveness is doing the Right Things.” Below is a list of some of the “Right Things” (in my opinion) that could and should be going on in a business transformation engagement. In every case a baseline measurement could be taken to determine the degree of current compliance to a stated requirement. If no requirements are in place then the interim manager along with the stakeholders would determine which are the “Right Things” to be done within the scope of the engagement. Many of the things listed below would be new for the engaging company and therefore any movement – even the establishment of these right things would most likely become a measure of the Effectiveness of an interim manager.

President

• Strategic plan = do we have a plan and can we execute on it?
• Top line growth = revenue acceleration, how much, by when?
• Bottom line growth = more profit
• Cost control = cutting out the fat, saving time and money
• Organizational alignment – right people right place – right org scheme for sales acceleration
• Cultural improvement based on “Best place to work criteria”
• Leadership training and departmental accountability to goals
• Formal coaching program w/SMART goals and measurements

VP Sales & Marketing

• Spreading the customer base beyond 80/20
• Share of market in key product categories
• Churning deadwood clients
• Targeting and adding new value-added clients/sectors
• Growing existing clients via increase volume/breadth of purchases
• Increasing meaningful touches with A & B accounts
• Automation of touch management – who and how many
• Dollars per sale
• Number of sales
• Profitability
• % of product mix sold to customers
• Close ratio on presentations
• Flash sheet development for daily sales inspection
• Pipeline management re: forecast and actual w/% est close
• Sales training

VP Finance

• Reducing bad debt
• Churning dead-wood accounts
• Reducing average date of accounts receivable
• Reducing cost of sales & marketing
• Cash flow management

Operations

• Maximizing inventory turns
• Reducing inventory
• Moving to JIT and cross docking strategies
• Leaning of the key processes in the organization
• Quality team development and process improvement across the entire organization
• Control of RGA’s tracking
• Error cause removal and charting
• Shipping maximizing as decreasing % of budget

Purchasing

• Maximizing vendor relations and driving down costs
• Partner programs and buying concessions
• Inventory management & stocking programs on key items
• Managing down inventory turns
• Applying in-house quality standards to upstream vendors
• Surveying the emerging market for new products/ programs / partners

Customer service

• Customer service satisfaction baseline and assessment
• Outbound customer service calls
• One touch solution program (implies authority to act)

Eric Fry, Principal
OneAccord
eric.fry@oneaccordpartners.com

2. What metrics are the most important indicator of success?

Here I am looking at a bucket of things, all which can be measured, which is the essence of a metric. The relative importance again is in the hands of the stakeholders.

• Viability of the market = is it in growth, mature, decline, crash
• Unique selling proposition USP – does the customer have a niche?
• Sales volume
• Margin
• Profit
• Cost of sales
• Customer satisfaction rating
• Pipeline
• Quality of product or service
• Brand recognition

Can you quantify the ROI of a past engagement?

Yes – in a hard and soft way.

Hard = The actual lift in sales and profit gained because of the interim manager. This is typically measured beginning at month 7 and forward through the life of the engagement.

• Pipeline $ + or –
• Close ratio improvement
• Increased $ per sale
• Increased breadth of product sold
• Increased margin
• Increased number of customer partner programs of various nature (All vital sales numbers and metrics)

Soft =

• Customer satisfaction rating which will gain more business but cannot be measured directly
• Brand awareness greater or lesser
• USP establishment
• Marketing campaigns
• Touch management programs

Eric Fry, Principal
OneAccord
eric.fry@oneaccordpartners.com

Photo by kozumel

Original post at The Executive Marketing Blog.