Delivering Interim Services

June 24, 2011

It is flawed logic to set an interim manager’s fee based on the pro-rata of a permanent employee’s base salary

Compiled by the Institute of Interim Management

When businesses look for an interim manager, they sometimes mistakenly value the ‘interim day-rate’ based on the pro-rata cost of an ‘equivalent’ permanent. An interim manager is not an ‘agency temp’.

This worked example shows why:

On top of an (example) £80,000 base salary, add company NI, benefits costs and variable employment costs. Then, factor in all the holidays, bank holidays, sick days, jury service, training days, burst boilers and compassionate leave days that you pay for. The following figures are approximate, but give a good sense of what your employees actually cost you:

Employee base pay (example) £ 80,000 100%

Company national insurance (limits apply. Rounded) £ 8,000 10%
Car allowance £ 6,600 8%
Medical, life insurance and other benefits £ 3,300 4%
Employers’ pension contributions (often higher or ‘final salary’) £ 6,600 8%
Bonus and other incentives (can be much higher) £ 12,000 15%
Employee holidays & absences (52 days not worked, but paid for) £ 16,000 20%

Total costs to the business for 208 days worked: £ 132,000 165%
Total cost to the business for each employee working day: £ 640 0.79%

Employers offering ‘pro-rata’ employee base-pay rate to an interim manager are offering a rate of only c.60% of the ‘equivalent’ employee’s package. That strategy significantly reduces the likelihood that a genuine professional interim manager or executive will express interest in your assignment. Once below a ‘daily-rate’ of 0.8% of ‘equivalent’ employee annual base pay, an interim manager would actually be providing services to you below ‘cost-price’, as they cover their own business costs.

Any ‘savings’ on engaging a ‘cheap interim’ may be swallowed up in time delays and recovery costs if the assignment is not implemented properly or if the ‘cheap interim’ leaves you in the lurch.

The actual value of professional interim managers and executives:

Engage in a fee discussion on the basis of the added value that interim managers offer through:

• Return On Investment – delivery of a solution that gives real benefit to the client
• Speed – being quickly available and able to make an impact quickly
• Expertise – being sensibly over-qualified with a wealth of skills and knowledge
• Objectivity – outside of company politics with a business focused perspective
• Accountability – being instrumental in an assignment’s successful delivery
• Effectiveness – with the authority and credibility to effect significant change or add value
• Commitment – a professional interim approach to deliver then exit in a good way

For real added value, don’t use an ‘agency temp’ pay calculation to attract a professional interim manager. They offer ‘Expertise as a Service’ and handle ‘Business as Unusual.’

[This common sense explanation © Institute of Interim Management (IIM) may be freely reproduced and used, with due credit, to explain interim management (03/ 2011) ]

To the IIM’s model, the DeliveryDemon suggests adding the following factors:

  • Recruitment of a permanent employee may have associated search costs
  • When the services of a permanent employee are no longer required, there are costs associated with redundancy
  • An interim takes responsibility for their own professional development whereas with an employee there are costs for training and time away to train

A Message for Micro$oft

June 18, 2011

The DeliveryDemon thought that Micro$oft had grown out of the sort of stupidity that leads it to ignore the most basic security principles in favour of a hard sell. Not so.

A few days ago, Micro$oft spewed out a massive download of fixes for Win7. Hidden in the myriad bug fixes is a nasty little payload which throws up messages  insisting that some perfectly respectable McAfee files are viruses. Having scared users with an irritating recurring false-positive security alert, Micro$oft then pops up message after message demanding that the user installs the Micro$oft antivirus product.

This is a recurrence of an old story. Micro$oft has used this trick in the past but recently it seemed to have learned a little sense. It’s clearly reverting to its old, discredited, behaviours.

Listen carefully, Micro$oft. Your hard sell tactics are making it abundantly clear that you’re not interested in distinguishing between respectable software and malware, just in scaring people into parting with money. This is remarkably similar to the behaviour of many of the scammers who lurk on the web.

Whether these false positives arise from poor software design, inadequate testing, or dishonest sales tactics doesn’t really matter. They irritate the hell out of your customers and seriously undermine your corporate credibility.

Get your act together, Micro$oft. PLEASE!

Delivering Stakeholder Management

June 14, 2011

It’s relatively easy to identify most stakeholders. Once they have been identified it’s relatively easy to put together a communication plan which allows you to tell them what they need to know. The plan can include two way communication events such as requirements analysis, Q&A events, document reviews and user tests. These are all part of the tried and tested approach to stakeholder management.

Rather more difficult is the management of stakeholder expectations. The project manager can issue crystal clear bulletins about what has been agreed and what is actually happening. At some point these butt up against stakeholder assumptions, recollections and aspirations. The bits which match will bolster the stakeholder’s world view. The bits which don’t match may provoke a reaction. If they do, that’s all to the good as it allows the project manager to identify and deal with any mismatch between the project as agreed and stakeholder expectations. But not all readers will bother to react. The danger comes when stakeholders skim project communications for the bits which confirm their expectations and ignore the rest. Then expectations may begin to diverge substantially from the project aims. Once that happens to any extent the project will never be a success. It may deliver to scope, cost and timescale but it won’t be viewed as successful because it’s not delivering what stakeholders have come to expect.

For a project manager to become a good stakeholder manager, it’s necessary to look beyond the project’s formal structured communication, and apply the black arts of expectation analysis and expectation management. Catch a straying expectation before it’s far from the straight and narrow and it’s easy to nudge it back on course. Let it stray long enough to become feral and you may not catch it in the lifetime of the project.

Becoming a curator of expectations requires a diverse set of skills, but the core skill is networking. Informal chats can alert the project manager to straying expections much more quickly than any formal discussion. It’s not just the obvious stakeholders who can be useful sources of information. Other projects and BAU targets may hide a reliance on invalid expectations, and people may set such targets as a means of pressurising a project to change its remit.

Sometimes divergent expectations arise because the business has moved on from the original project requirements, and the project may need to change in order to deliver business benefits.

It may not be easy to decide whether expectations should be brought in line or the project changed to meet expectations. This is where stakeholder management feeds into risk and issue management, and through that to the broader project governance and sponsorship if it appears that problems are going beyond the authority delegated to the project manager.

You can, in isolation, deliver a project which meets all its objectives. But unless you step outside the ivory tower and keep abreast of events in the wider context the project may not be seen to be successful. That’s why a project manager needs a taste for coffee, beer and cocktails, not to mention a tolerance for the smoky, windy conditions endured by the huddles which gather outside the doors of most office buildings.

Slavery in the Modern Commercial World

June 2, 2011

Slave – a person legally owned by another and having no freedom of action, according to the DeliveryDemon’s dictionary. The slave formed part of the wealth of the master, and was often used to generate more wealth. Supposedly slavery has been outlawed in most areas of the modern world, but is this true, or has it been replaced by a more subtle equivalent?

Suppose a company is sold in its entirety, or decides to sell some or all of its book of business. You, the customer, can be sold as part of that deal irrespective of whether you would choose to deal with the buying company. If you have a long term contract for a service such as utility supply, it is highly unlikely that any such sale will trigger a get-out clause in your contract. But the selling company is making money by selling you.

If your employer is sold, again you have no freedom of action. Some roles may be made redundant, others retained. If you occupy a retained role which is unchanged by the takeover you have no right to redundancy, not even if the new employer is one you might never have chosen to work for. Again the seller makes money by selling you.

The bureaucracy collects data on its citizens. Should you be born, or marry, divorce, or die, it becomes a matter of record and those personal details can be sold. Should you become a company director, your details may be sold. Should you decide to exercise your right to vote, your details will be sold unless you opt out, and that doesn’t provide a 100% guarantee. If you require hospital treatment, the consent form hides a proviso that your details will be passed on to a commercial benchmarking organisation called Dr Foster. Yes, our bureaucracy is selling our personal information.

Try being economically active, and it’s no longer a matter of exchanging currency for goods. The seller will move heaven and earth to acquire as much data as they can about you in order to boost their profits. We have become so used to loyalty cards we no longer think of how these little plastic objects are used to capture our likes and dislikes so that we can be targeted with marketing. Buying car insurance? Try doing that without giving away details of your house insurance. Buy a one-off gift online from Mothercare for a friend’s new baby and you have to set up an account which demands a much wider range of details than are needed for the transaction. Set up an Amazon account and every time you log in your transaction history is used to try and make you buy Amazon’s own products and that of the many organisations which use Amazon as a trading platform. Buy an iPhone and you give Apple a record of your movements.

Organisations tend to justify the commercial extraction of your data by saying it is used to give you a better shopping experience. In the DeliveryDemon’s experience, most people are capable of making their own shopping decisions. And targeted marketing models are usually based on such unsophisticated assumptions that random recommendations may well be as effective as their targeted suggestions. The only exception the DeliveryDemon has noticed is in the case of small specialist organisations whose principals have a great deal in common with their customer base.

So who’s making money out of you? And are they paying you for the value they get from you?