In a previous column I mentioned a trend I’ve observed at some startups and small businesses: the rise of the executive in residence, or EIR.
These managers, brought in for a specific time- or project-bound senior role, are a choice companies have to weigh against other alternatives. Based on the experiences of clients who have pursued the EIR option, there are five conditions required for success:
Management transparency and openness to help
Management transparency has been in vogue for more than a decade, but there is transparency and then there is transparency. For the EIR role to work, the contracted executive has to be treated as part of senior management, including attendance at weekly meetings where financials and sensitive topics such as HR are discussed. Without this context, these executives are only in a position to execute their own roles, and they cannot bring to bear overall management experience and expertise.
It is atypical for senior professionals to strategize, plan and execute on their own. Experienced executives typically have leverage, either inside the organization – in the form of more junior employees – or outside it. For EIRs, there is an expectation of leverage, though it doesn’t necessarily have to be present on day one. For example, in two recent EIR situations I was involved with, it was their job to hire their eventual – more junior, more execution-oriented – replacements.
Time-bound, or …
The ideal EIR situation is often one where a startup or small business needs helping “getting over the hump” or “getting through a phase,” which is a time-bound period of transition, with company-wide implications. A firm recognizes, for example, that it doesn’t have an experienced CFO in place to get it through an important filing, or an experienced COO to guide an expansion. The company also recognizes the need for those people to remain in the roles after the transition period has lessened and that a “minder” will likely be able to execute on the system the EIRs built during their contracts.
Like the time-bound situation above, EIRs can help smaller shops plan, start, finish and mechanize projects with broad implications. A marketing EIR might be hired to bring sales and marketing capabilities into the organization while helping the CEO with strategy and direction. Once the capabilities are built and trained, the contract is over. In this case, leverage is especially important.
Ability to retain intellectual capital
Perhaps the trickiest condition to gauge is the ability of the organization to retain the intellectual capital – the good ideas, concepts, processes, systems, and overall wisdom – of the contracted executive. Unlike 10 years ago, there are many cost-effective technology solutions for knowledge management available for smaller businesses, and this is one reason more of them are willing to choose the EIR route over a permanent executive.
So the next time you consider bringing in a very senior resource, an EIR may be a way to avoid, or at least delay, significant costs while gaining an experienced management team member for a critical period or project.