How to Enable Change Success With Your Interim CEO

Is your organization facing a leadership gap? An interim CEO can provide the stability and guidance to tackle crises and drive change during this time.

This guide focuses on how individual practitioners and enterprise-level clients can support the smooth introduction of an interim CEO (also known as CEO interim), make the most of their expertise during their tenure, and successfully transition to a permanent leader after their exit.

Whether you run a small business or a large corporation, discover the benefits of hiring an interim CEO and how to manage their time at your organization effectively.

What Is an Interim CEO?

An interim CEO is a temporary chief executive officer appointed to lead a company during a transition, crisis, or after the sudden exit of the previous CEO. They’re crucial for maintaining continuity, driving key initiatives, and managing change until there’s a permanent CEO.

An interim CEO has a successful track record and helps achieve specific goals quickly. These goals include crisis management, stabilizing the company through a critical transition, preparing it for a sale or merger, or leading a turnaround effort.

Because an interim executive’s role is temporary, they can perform objective assessments and make tough decisions without long-term repercussions, which can be invaluable in times of significant change or restructuring.

However, the organizational solidity and strategic improvements an interim CEO offers are only effective when supported by a robust change management strategy.

"I believe great leaders separate themselves from the rest by role modeling strong sponsorship in times of change. Sponsorship requires remaining active and visible throughout changes, building strong coalitions of support, and communicating directly with impacted employees in a candid, authentic manner."
— Scott McAllister, Prosci Chief Executive Officer

The Role and Impact of an Interim CEO

Hiring an interim leader can have three main advantages for your organization.

1. Stabilizing the organization

Economic uncertainty and increased competition have led to a staggering surge in companies requiring interim executive talent, with the demand for interim CEOs rising 220% YOY in 2023 compared to 2022.

During turmoil or transitional periods, CEO interims provide immediate leadership presence and highly specialized skillsets that can stabilize the company and alleviate employee anxiety. This gives organizations time to vet permanent candidates for the CEO position and support change management processes.

2. Implementing strategic changes

CEO interims can also be catalysts for change. They can execute strategic pivots to improve operations and help businesses recover or grow. Examples include digital transformation and projects that require leadership beyond the existing team’s expertise.

Companies rely on the interim CEO’s extensive experience to provide an unbiased perspective of current projects or processes and make quick, data-driven decisions.

3. Managing transition

An interim CEO is often an expert in managing organizational change. They can help navigate complex processes within significant transitions, such as leadership changes or a merger or acquisition.

Stakeholders and management teams expect CEO interims to resume business operations and reduce their workload during a transition.

Key Skills of an Interim CEO

Given their strategic importance, an interim CEO often possesses unique strengths. The image below describes just a few of the qualities needed to be successful. 

Change Management CEO Interim

Let’s take a look at a three common scenarios in which companies look for a CEO interim and the value they bring to each.

During a leadership transition

An interim CEO can provide leadership continuity when a company’s CEO suddenly steps down without a successor. Importantly, they prevent operational or strategic vacuums during the search for a permanent replacement.

The interim CEO’s expertise can help your business run smoothly, maintain stakeholder and employee confidence, and make valuable changes.

During crisis management situations

An interim CEO specializing in crisis management is vital during financial distress, scandals, or significant operational challenges. They can make quick, data-driven decisions that lead the company through the situation without entrenched issues from long tenures and personal biases.

During turnaround situations

In turnaround situations threatening a company’s viability, an interim CEO experienced in restructuring and transforming businesses can help revitalize an organization. They can support the leadership team in the short term or even in a mentorship capacity.

Challenges of Introducing an Interim CEO to Your Organization

Although an interim CEO can significantly help your organization, their introduction poses challenges.

Authority and leadership acceptance

Stakeholders and leadership might not view the interim CEO as a legitimate or “true” leader. Sometimes, the lack of respect or authority can lead stakeholders to ignore the interim CEO or modify decision-making processes to bypass the temporary leader. This skepticism can undermine the new CEO’s efforts to take decisive actions.

Change teams and practitioners must help interim CEOs gain sponsorship commitment from other leaders for change initiatives. They can do this by equipping the leader to fulfill their critical role as executive sponsor during changes. Change teams should also provide solid reinforcement plans that ensure the short-term CEO’s decisions have a long-lasting impact.

Resistance to change

Employees and management may exhibit resistance behaviors when an interim CEO sponsors changes, especially if these changes are rapid or significant. This resistance can stem from uncertainty, fear of job loss, or loyalty to previous leadership.

Prosci Top 10 Tactics for Managing Resistance

The Prosci ADKAR Model® Mastery Level 1: Prevent Change Resistance program can help practitioners improve change readiness and adoption and prevent resistance.

Cultural fit

An interim CEO might need help with fitting into the existing work culture, especially if they come from a different background or have a contrasting leadership style. This mismatch can lead to internal friction and hinder strategic initiatives.

Practitioners and change teams can work directly with the interim CEO or executives to bridge the gap. However, this might not always be possible, given the magnitude of their daily tasks.

Data from Prosci Best Practices in Change Management research can help change practitioners understand the cultural impact of a new leader and customize their change management approach to solve any issues.

How To Prepare for the Transition

Hiring an interim CEO is a great business strategy that can keep companies operating efficiently during a crisis. The right interim CEO offers stability and leadership to ease worries and leverages their expertise to provide fresh perspectives and solve problems.

But they can only succeed if their transition into the company and eventual departure are handled effectively. For change practitioners and organizations, this means preparing to make a smooth introduction, helping build sponsorship, and reinforcing changes to be sustainable.

You can use the Prosci ADKAR Model to develop change management strategies that streamline the CEO interim’s transition:

Prosci ADKAR Model

This model enables you to identify barriers to change an individual’s experience as they go through a transition. By scaling the model within an organizational process, you can help 10 people, 100 people or even thousands adopt the change. This minimizes disruption and helps ensure continuity during the interim CEO's term.

Create a Smooth Transition for Your Interim CEO

While the interim chief executive officer’s tenure is temporary, the impact of their leadership can resonate far beyond their time with your business. To take advantage of their expertise without disrupting your operations further, your organization should have an efffective change management strategy in place to help smooth the transition to and from the company.