A Rapidly Changing Business Environment Requires Flexibility
By Steven E. Sacks, CPA, CGMA, ABC
One of the revelations arising from the Great Recession was that companies could find they could do more with less human resources or at least maintain the same level of productivity. So, while the Bureau of Labor and Statistics cites the current unemployment rate at 3.8%, the actual number is higher when the underemployed or those whose unemployment ran out are taken into consideration. We now have what is referred to as the Gig economy; where important functions can be outsourced while companies can still focus on core competencies that impact growth and profitability.
Because it is increasingly challenging to maintain high standards in all functions while still focusing on core competencies that drive growth, seeking outside help is becoming an attractive option. So, when should you outsource services? The answer is not black and white — it continues to evolve. Outsourcing in not limited lower levels; executives have turned to this approach for senior-level functions, and as a result have become more flexible leaders. They are in favor of recruiting executives who act as COOs or CFOs on a limited basis to help implement and see to completion organizational goals. All this without increasing overhead or paying benefits.
Companies use a combination of internal and external services at all levels, even in the C-Suite. Many executives have turned to a new approach to investing at the highest levels of the organization: flexible leadership capacity. The notion is to identify those resources on an as-needed basis requiring senior executives with the relevant experience to accomplish organizational goals without adding to the company’s overhead.
Two common trends management teams are facing are operating with limited capacity and capabilities and evaluating technology projects that will enhance productivity.
Leaders over the past five years saw revenues decrease, which had caused them to reduce their full-time staff by a proportionate rate. The work, however, that had to get done did not decrease. While we are past the nadir reached in 2009, there are still some sectors that are reluctant about hiring more personnel on a permanent basis.
Consider large companies like Pepsi, Verizon, Ford Motor Company, Amazon, Macy’s, AT&T and Walmart have been laying off workers. Layoffs are a fact of life for those in the workforce, though that will likely be small comfort to those getting a pink slip. No longer will there be the “company lifer.” Technology, globalization, outdated business models, and a growing younger workforce are working against the mid- to late-career workers. Gone are the days when a worker could count on having the same employer through good times and bad. Also, the hiring frenzy that took place over the past several years did not take into consideration the consumer’s changing buying habits.
It does not matter how organizations seek to become leaner. The focus still remains on identifying and pursuing means to accomplish objectives based on agreed-upon objectives. But the push-pull conundrum still requires reaching goals based on pragmatic objectives and to seeing through to completion initiatives that are logical and directed to what makes sense. Whether these ideas can be actually delivered is another matter. Competitive pressures haven’t reduced simply because organizations are leaner; executives are often under pressure to accomplish more objectives, set more priorities and drive more initiatives than they can realistically deliver.
Using Current Resources or Looking Elsewhere
Outsourcing is not a new approach. We can find this is payroll and human resources. The important aspect is that core skills and activities reduce the compliance on services that are not essential. It increases bandwidth that can be accomplished in other areas and offers flexibility to manage other important functions. offers a way to remain nimble in a high-risk, rapidly changing business environment. For services, such as payroll or help support, outsourcing is a way to minimize resources devoted to non-core activities. At higher levels, it can provide the necessary bandwidth and technical expertise to help you complete an important initiative. It can also help you accelerate progress toward strategic goals.
While our economy is better than it was during the Great Recession, companies are still careful about over hiring. When combined with talent moving around companies at rates much faster than ever, this has resulted in a talent vacuum, resulting in the delay to undertake major projects or restructuring.
A way to be flexible to meet this challenge is looking to outside companies that specialize in providing rent-an-executive resources that can immediately hit the ground running in working with members of the senior leadership team.
The use of temporary skills is often found in the area of technology: planning and implementation; software identification; and contract negotiation. The existing leadership may not have the wherewithal or knowledge to function in the technology space. By outsourcing this service, the rest of the senior team can devote its efforts to the rest of the company’s operations, including finance, manufacturing and marketing.
Flexible leadership goes well beyond temp hires or the usual approach to outsourcing. The idea is to looks for those individuals with deep experience that enables them to have a temporary C-Suite position with all the responsibilities and authorities it makes sense to have. This will relieve the rest of the C-Suite of the overwhelming amount of work arising from an executive who left the company. Further, this person may prove to be a “keeper” after the initial needs for his or her skills have been satisfied.
Making a Plan
Searching for an interim executive, make sure that the person has sufficient experience with type of work experience, as well as a track record of positive reviews. The person should have served in the same type of role needed (e.g., COO, CFO, CIO) so that he or she has a “big picture” perspective, while also being able to get into some of the nitty gritty details.
You may find that you need someone a football team needs: a generalist/specialist. Someone who can return kickoffs, punts and be a wide receiver. This “flexible” player can handle multiple assignments or projects and identify the financial and human resources necessary. This takes the pressure off the other C-Suite and upper-level managers.
Technology companies are probably the best examples of users of flexible leadership. Companies like Apple, Google, Facebook and Salesforce are some of companies that look ahead to where there could be bottlenecks and will consider early on how to identify and fill capacity shortages. However, you will also find them in other sectors, such as entertainment (Netflix); ride sharing (Uber and Lyft) and hospitality (Airbnb). These latter companies have created models that other companies can model or modify while implementing flexible leadership.
Innovative companies or start-ups will in short order undoubtedly use flex leadership to manage costs and move quickly to become market leaders, and will do so with the appropriate expertise, while managing costs.
Steven Sacks is the CEO of Solutions to Results, LLC, a consultancy that specializes in helping individuals, firms and organizations meet the challenges of communicating with clarity and purpose. Visit his website at www.solutions2results.com.