Skip to main content
The Globe and Mail
Support Quality Journalism.
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
Just$1.99
per week
for first 24 weeks

Enjoy unlimited digital access
Enjoy Unlimited Digital Access
Get full access to globeandmail.com
Just $1.99 per week for the first 24 weeks
Just $1.99 per week for the first 24 weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(select.open)}function setPanelState(o){dom.root.classList[o?"add":"remove"](select.open),dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); } //

Stuart Pearce is an unlikely management hero. The former England team soccer player became caretaker manager of the national team when Fabio Capello resigned abruptly last month. He may yet lead England into the forthcoming Euro 2012 tournament if his masters can't get around to naming a permanent successor.

Would that be a bad thing? I don't think so. With fans' expectations duly lowered, the former defender might have a better chance of shining than the overpaid Mr. Capello would have done. In the process, he could become a role model for anyone who has ever worked as stand-in CEO, interim director, acting divisional head or caretaker vice-president of sales.

Chief executive officer tenure averages 6.6 years, according to consultancy Booz & Co. (substantially longer than that of most soccer team managers). But CEO turnover has been as high as 16 per cent in the past decade. At the end of last year, only 25 of the world's top 2,500 companies were run by understudies. Further down the corporate hierarchy, however, where sluggish succession, deferred decisions and mishandled handovers are common, many managers must be bridging leadership gaps.

Story continues below advertisement

Sometimes they take the permanent role. UBS hurriedly anointed Sergio Ermotti as CEO last November after he had provided temporary cover following a $2.2-billion (U.S.) rogue trading scandal. Ed Whitacre, then General Motors chairman, took over as interim, then permanent CEO in late 2009 – although he announced nine months later that he would step down, having fulfilled his "public duty to return this company to greatness."

More often, acting managers arrive unheralded and leave uncelebrated. Three things are said to hold them back. First, they lack experience and authority. Second, their temporary nature makes the company vulnerable – to competition, a drop in the share price, or even takeover. Third, they manage only tactically, not strategically.

The experience question ought to be irrelevant at organizations that have done their succession planning properly. Directors should ask themselves: If we don't have a capable internal stand-in, how strong is our team? As Christopher Kinsella, himself acting CEO of Britain's Chartered Management Institute, puts it: "Everyone should be able to be replaced by someone else from the organization."

Temporary "promotion" can be problematic. Boards must decide what to do if their stand-in insider is not the final choice. They should be ready to return him or her to a different role. Alternatively, they could avoid the issue by picking a fellow director to cover the gap, or one of many experienced professional interim managers, who relish the challenge of a finite appointment.

Anything that leads to increased short-termism is a worry – but so is excessive power concentrated in a long-serving authoritarian executive. As for increased vulnerability, this is usually due to the circumstances of the previous chief's departure.

Two chairmen recently obliged to appoint interim CEOs told me they had made sure their stand-ins had full board support, and the power to act as full-time CEOs in virtually all but name. Strategy setting was the only area they were reluctant to put in the hands of a temporary leader.

Some big decisions – on pricing strategy, say – may not wait for a permanent appointment. But Mr. Kinsella reckons a good interim manager, backed by directors, should be able to take such steps. In any case, what is wrong with a leader being forced to concentrate more on managing and less on plotting the next great deal or wrenching a change of strategic direction? Mr. Pearce has ruled himself out as long-term England manager but says he has the skills to take the team through a tournament: such focus, minus the preening and politicking that sometimes distracts full-time executives, can be welcome.

Story continues below advertisement

The term "caretaker" usually stands for workmanlike lack of ambition. It is associated with the man who plugs the leaks in the roof of the parish hall. But his opposite is the man who bets the parish hall itself on a possible rise in the property market. Few would advocate a world run permanently by temps. But before making a long-term appointment, boards should take a look at the solid virtues of a good interim manager. A little more caretaking and a little less risk-taking might be a good template for any full-time replacement.





Report an error
Tickers mentioned in this story
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

If you do not see your comment posted immediately, it is being reviewed by the moderation team and may appear shortly, generally within an hour.

We aim to have all comments reviewed in a timely manner.

Comments that violate our community guidelines will not be posted.

Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies