Growing demand for interim managers on the Czech market

Illustrative photo: Bartlomiej Stroinski / freeimages

The concept of interim management is gradually catching on in the Czech Republic, with a growing number of firms turning to interim managers for help in the event of financial problems or the need to effect a radical transformation. The Czech Association of Interim Management was set up five years ago and at present it has 500 members. I spoke to its chairman Tomáš Pastrňák about its work and the companies that request its services.

Tomáš Pastrňák,  photo: archive of Czech Association of Interim Management
“Generally the biggest group of companies in need of crisis managers are middle-sized companies –meaning 250 to 2,050 employees.”

And what do they need them for –is it for transformation projects or is it companies facing bankruptcy?

“At the moment there are two groups of companies that require our services. One group is made up of private-owned companies, like family businesses. These companies after 20 to 25 years when they were owned by one family or one owner are often at a crossroads and are thinking about the future. Sometimes they lack new managers and need help in preparing a sales strategy. That is one group, the other is ailing companies that have big problems. These companies usually have new owners who need to make significant changes and who need help with the transformation.”

Do you help new companies –if someone sets up a company do you help to get it rolling, do you create a vision and so on?

“Yes, that is part of our business, but generally it is a bigger project, not just helping a company get off the ground. Very often we help incoming investors from abroad.

They will establish a company but very often also take over another and we assist with that process.”

Your association was established five years ago. Can you tell us what firms you have helped over that time?

“We have two groups that very often ask for help. One group is big companies from Germany, Austria and the UK who need skilled managers with a good knowledge of the market. They are big, but they are new in the Czech Republic. The second is Czech companies looking for a change of management or in need of tackling some special project.”

How long does it take for an interim manager to get a company back on its feet or effect a transformation project?

“After 20 to 25 years of being in the business, many companies are at a crossroads – they need to make changes and look for interim managers to help with the process.”

“In twenty-five percent of cases it takes longer than 12 months. In this we differ from other countries, such as Germany. In the Czech Republic the projects take a little bit longer. We very often work for more than 12 months. In Germany and Austria the average interim management project is between six and nine months.”

If you compare the number of crisis managers here (500) and in neighbouring Germany (14,000 ) is there still room for growth here?

“A big increase in interim managers in Germany came in the 1990s. That was because West German companies were taking over many companies from East Germany and experienced crisis managers were needed to effect mergers and transformations. Now there is a similar situation in the Czech Republic. After 20 to 25 years of being in the business, many companies are at a crossroads – because of the crisis or because of a change of management or ownership. They need to make changes and look for interim managers to help with the process.”

Are owners not worried about letting someone –essentially a stranger - get inside information about their firm and then move on?

“I think this is a general problem and it is something we have to explain to the managers and owners of companies. The way we see it is that the interim manager is a true professional –they work for one company at a time and after that will not work for a similar company or a rival company. A professional interim manager does not have a problem with this. But in the Czech Republic there is this concern and this is why we speak with company managers, organize conferences and explain what interim management entails. So generally, they had this problem but knowledge of interim management in the UK, the Netherlands, and Germany has made it easier and we have never had a problem with a leak of information or data from any company that we have assisted.”

So you are still doing a lot of PR in spreading awareness of the concept of crisis management in this country?

Illustrative photo: Bartlomiej Stroinski / freeimages
“Well, yes, interim management in the country is quite new. We need to inform owners, companies, managers about this service and yes, we need to organize a lot of conferences and meetings with them to show what is possible. What is absolutely impossible in the Czech Republic at the moment is projects for the government, for example. It is very useful in Germany, the UK and the Netherlands, but I do not know of a single project for the government here in the Czech Republic.”

And why is that?

“Probably it is that we are not ready, generally speaking. It is work for politicians, not for professionals. But it may come in the future.”

What are your goals for the future?

“I expect a big market created by ingoing owners. After 20- 25 years we have a generation that is leaving the business. These people are 60 -65, very successful owners who were strong leaders and who do not have followers, do not have anyone in the firm to succeed them – and this is a window for interim managers to step in, create a project for a year, a year and a half and prepare the company for sale or establish a new managerial team which would be ready to manage the company for the next 5 to 10 years. I feel that there will now be a very big market for interim management in the Czech Republic.”

When you send interim managers to companies – what problems do they come up against? Are they respected and given a free reign or do owners try to interfere in the process of reshaping the company?

“After three months I am ready to manage a firm as if it were my own.”

“It depends on the manager. But speaking from my own experience- I very often work with the owner and after a month or so I have to be respected by the owner or manager, because I am helping the company. After two or three months the owner is given a free hand in selecting the strategy and I have a free hand to manage his company. My role is to make time for the owner, to show them different scenarios and after three months I am ready to manage his firm as if it were my own.”

Are interim managers in the Czech Republic as well paid as in Western Europe or is it still not the same?

“I think it is still not the same. Generally this information is not published, but if the average rate in Germany for example is around 1,000 euro per day in the Czech Republic crisis managers get on average 60 – 70 percent of that rate.”