CEO of The Predictive Index (PI) Mike Zani talks with Kristen McAlister, co-owner and president of Cerius Interim Executive Solutions. Kristen plays matchmaker to senior executives. When CEOs are looking to fill a a specific role on a temporary basis but find there’s a gap in their senior team, Kristen and Cerius, with a behavioral understanding of what is needed for those specific roles, come in to save the day. So, how is Kristen able to pinpoint and predict candidates that will succeed? Listen to learn more!
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Mike: Hi I’m Mike Zani, I’m the CEO of The Predictive Index, quite fortunate to be here with Kristen McAllister from Cerius Interim. Cerius Interim is a really interesting company.
Mike: So, this is something that we’ve seen a lot in Europe, but sort of a matchmaker for senior executives. When CEOs are looking to grow their business and they may have a gap in their senior team, it doesn’t have to be the C Suite, but anywhere on their senior team and they’re looking to fill a very specific role on a temporary basis. And you call Cerius, they work as matchmakers, they try and get the right fit. Kristin McAllister is their president and joined the business shortly after founding and has a really interesting story. Kristen, so glad to be here with you today, thank you.
Kristin: Thanks Mike, really appreciate it.
Mike: So, not everyone is familiar with this whole element of matchmaking. So tell me a little bit about how you got involved and what you saw in the whole senior temporary element when you got started.
Kristin: I appreciate you saying not everyone because, that’s an understatement. It really is well known it throughout most of the world, except for North America, up until like say the past couple years. We’re really seeing a trend towards that way. I got involved because I was an independent executive, I was laid off in the 2008 crash, and was trying to figure out what to do, and decided why don’t I consult.
Kristin: And I did some consulting, and I would go in, we put together a great plan, and then I was out, and they didn’t have the internal resources or bandwidth to actually sustain it or execute it, and everyone was still on their day to day jobs, and that’s when I was introduced to Cerius on the interim executive concept, of why don’t we actually step into the company, and help them hands on.
Mike: I would…
Kristin: Go ahead.
Mike: No, I would tell you that we used a temp CFO right after we bought The Predictive Index, and our current CFO was in the process of selling a business, and was not able to liberate himself for six, eight months. And this temp CFO stepped in.
Mike: To say that they saved our bacon, would be an understatement, it was an amazing effort, a great fit and it was something where we needed a very specialized resource, and it was dropped upon us, and it was a marvelous solution. How often do you see that be the case?
Kristin: It really is meant to be a short and midterm solution. When you look at a full time CFO who’s going to be in there hopefully years and years to come, that interim is either on a temporary or part-time basis. It’s meant to fill a gap that’s other than full time.
Kristin: So, if you need them in their five days a week for the next three to six months, or you just need them in their two days a week for the next year or two, it’s any time you need that executive expertise in your company hands on, just not in a longer term an employee way.
Mike: So, who’s your biggest competitor and this? Is it the sort of CFO who is on the street doing some consulting on a temporary basis and is sort of well-known in their local neat niche, is that sort of the mom and pop operator, is that one of your competitors that they don’t come to you, they try and find a serendipitous connection on the street, so to speak?
Kristin: Yeah, we look at the competition much wider, because it’s not that established of an industry here in the US. Our competitor is any person or persons or company that can solve the company’s problem, maybe not the same way we do, but, they can solve the company … You needed a CFO. You could have brought in a consultant, an individual temporary CFO that a friend referred to you, you could have called us, or you could have hired someone else full time in the near term. So you had a lot of ways of solving your issue and filling that gap, that’s really our competition. It isn’t one single company. It’s any solution out there.
Mike: So how do you make sure when you parachute an executive in, we had a successful connection, but it could have easily gone sideways. How do you ensure that parachuted in executives are successful when they land at the new company?
Kristin: It’s anywhere from starting with the first conversation. Where things will start to go sideways is, if you aren’t clear why are you bringing the CFO in. what are the issues in the company, what are the needs, do we need it to fill exactly where that will CFO was, or do we have some changes, are we transitioning, like you were spotted.
Kristin: Those are very different circumstances and different expertise, compared to maybe the CFO who had been in there prior, you probably even would adjust the job description at the time.
Kristin: So it starts there to finding the right match of that expertise, to also finding the right culture fit and work style fit. We’ve had situations back early on when we purchased a company where, we had two CFO’s in there. The first one, it wasn’t a good fit, second one, great fit. Line up their resumes, almost exactly the same resume. What was different, it was the personalities and work style, this was not an easy CEO. I’m not going to say that most CEOs are…we’re entrepreneurs, business owners, definitely a very unique personality, we had to find someone whose work style matched that CEO’s personality and work style.
Mike: Yeah, I believe all my employees would say this CEO is a little bit of a nightmare. So, you have these two perfectly matching resumes, and it came down to culture and work style, are there some similarities between you and say even executive retained search on how you approach your placements?
Kristin: I’ve actually never done retained search. We’ve never been an executive recruiting firm, so I don’t know that I can speak to specifically, but it’s a very different … We don’t go by a job description, we go by a situation.
Kristin: Now how we vet the executive and interviewing them and putting them through assessments, is very similar and probably is to the extent of the individual who’s doing the interview, and how well that individual understands the client situation. I think that’s the key difference between the different situations.
Mike: Right, right. So some of the same skill sets, and I didn’t mean to throw you a curve ball with that, now that you had been executive retained search. But it seems like you’re sweating as much of the details to make sure there’s a fit even if it might be two days a week for six months that someone might be for … Hopefully someone they get for the next 10 years…it seems like you’re going to that level.
Kristin: I will say, retained search and finding that right long term executive, often is more challenging. Because you’ve got a job description of what someone needs to be able to handle the next three, five, seven years, and every situation that that company is going to be in. First is on an interim basis, we’re ale to really zero in on the company situation, the people involved, and get a very precise skill set.
Mike: Right, So you maybe even able to take more risk and say, this person’s going to be perfect for six months. They may not be what you need three years from now, that’s great. So, what happens when one goes sideways, what do you do that one, prevent that from happening, and then if it kind of go sideways, what post-mortems are you doing around that?
Kristin: We do what a lot of what went wrong, and how could we have seen that, how could we have prevented that. We’ve recently changed our reference check system, and with LinkedIn and all the recommendations out there, no one really likes the reference check process, and everyone has their own opinions on it, so we’re continually staying up to date and, never had one really go that sideways, but it’s more of, the personalities may end up conflicting more with the team than you want or the leadership style, but also the business changes, the circumstances change.
Kristin: So how can we better predict and put someone in who can be more flexible to some degree of change and flexibility, because even in two months, the business situation can completely change.
Kristin: We just put in an interim CFO, and for two weeks into the assignment, the assignment took a 180. And rather than implementing a new accounting system for the next six months, they’re looking to sell the company over the next six months.
Mike: That’s pretty radical. So that must’ve been…Do you ever have the interim call you back and say, this wasn’t the deal that you talked about, and sort of come back at you and say wow, I didn’t know what I was getting myself into?
Kristin: I would say, most of the time it’s well I didn’t know what I was getting myself into, it’s probably a good eighty, ninety percent of the time. Mainly because, you can’t find out everything in the … It’s many meetings and interviews and processes you go through, as a business owner, I’m not going to share everything. I’m not going to share the nitty gritty, I’m not going to share all of my skeletons in the closet.
Kristin: So it takes a couple weeks for the interim executive to be on the job, to say okay, here’s what we didn’t know about, and what we weren’t told, and here’s how we need to adjust. Or, no problem, we’ll take it as it comes, it’s just part of why we get brought.
Kristin: We normally don’t get brought in when everything is running perfectly. So the interim man does … You just have to roll with it.
Mike: So I understand that you joined sort of concurrent with the recession in at the end of 2008. As I understand it, the recession actually really helped your business. Tell us about that, it’s unusual to find companies that do extraordinarily well in recessions. I’d love to hear about that.
Kristin: It was like, there was some type of a paradigm shift in mindset in business, and you’ve seen it over the past 10 years. We’ve got a number of clients just in the past couple months who’ve called and said, okay, I was 15 million in revenue, my industry changed, we had to pivot, now I’m five million in revenue and I’m building back there.
Kristin: Our industry changed as well. Rather than I need to own the employee, I need to have a full time W2 executive with the full benefits package here who wants to spend the next 10 to 15 years with my company, with the recession, you just couldn’t afford it, you could not afford an entire management team.
Kristin: And so they started using interim as a part-time basis, or just on an as needed basis. I need to make a shift, I just need them for the next six months, I can’t afford them for the next six years.
Kristin: And you had that … As we redid our businesses, we saw that shift of how little of my business can be overhead. From an overhead versus what’s more flexible, I need more flexible labor models.
Kristin: So, it was a big shift in business models and talent strategy.
Mike: Now we’ve been on a sort of 10 year run here, has it been go, go growth for you guys?
Kristin: Yes. We have seen nothing but growth. A lot of it is, we’ve done better at branding ourselves and focusing ourselves. I look back to when we bought the business in 2011, and, we just wanted to go after everything. But the more we niched ourselves and we really grounded ourselves in what we do and try not to be all things to all people, the more we saw growth, and the more the marketplace has started to adopt and actually seek interim management and interim executives as a talent solution.
Mike: So what would you tell your 2008 self if you had the opportunity to go back and whisper in your ear. What life lessons would you, or business lessons would you throw your way?
Kristin: Focus. It’s probably the biggest thing that I tell any entrepreneur, and what I really wish all of those opportunities that we chased, all those well we should try this and try that, let’s not miss any business, let’s be all these 10 things. You got to our web page, and you really had no idea what we did. Because we’re trying not to miss any opportunity. But the more we grounded ourselves, we focused what we did, our messaging and our interactions, that helped immensely.
Kristin: There’s a lot of opportunities that still come our way, and we say no that’s not part of our strategy. It’s not part of our focus and where we want to be in the marketplace as the leading interim executive firm.
Mike: Yes, sometimes the toughest decisions are the no’s not the yes’s and it seems like you’ve gotten tighter at saying no. That’s great, that’s great. So, what do think the future looks like domestically for your business, for placements that might be temporary in nature?
Kristin: We’re seeing across the board, traditionally in the marketplace, everyone knows a fractional or temporary CFO. More and more, we’re seeing that director of operations, COO on a part-time basis, really take hold. Or we’re seeing at HR, HR, interim HR, we’ve gone from probably the number eight or ten most requested role, this last year, it bumped up to number two or three.
Kristin: That focus of US business and talent being such a thorn and such a pain point, and that the limiter of the growth, the bringing in, interim HR to help with the…it’s not so much human capital anymore, it’s like talent strategy, how do we retain the employees we have. How do we switch our business models to be more nimble with our talent.
Mike: So with the scarce resources a company is looking for interim, or is it high quality people who are willing to work on an interim basis?
Kristin: For us, we have well over nine thousand and growing in our immediate network of interim executives,. I can tell you I don’t have 9001 companies looking for them. So, by far, you’re always going to end up with more on the talent side. However, if you’re a company looking for something very specific, and you’re having a tough time finding that just the right executive, I guarantee you, you’ll say, oh well it’s scarce. Really depends on how niche and how specific you’re looking for.
Mike: Right, right. Well fantastic. I heard you stumbled across The Predictive Index in one of your post-mortems. Tell us about how you use it and how it comes up in your world?
Kristin: You know what, we actually found it’s useful in a number of ways. Originally we thought, alright, we’re going to use this assessment to tell us whether there were good interim executive or not. Because not everyone can do interim executive work as you mentioned. You need to be able to parachute in, assess quickly, get a plan in place and start executing.
Kristin: And more so over the years, we’ve looked at it in comparing the works styles and how well they fit, with the company, the CEO. We look at it compared to probably at least 10 different data points that we gather, and we’ve had one or two situations where all our interactions and all our data points show the executive and their background and their story in one way, and The Predictive Index, show a couple of inconsistencies with that story that we had.
Kristin: And it really gave us a big, not a red flag, but this pointing fingers, saying go down that hole and investigate further.
Mike: Oh so places to double click on someone’s background or work style and you try and uncover are they … Is it just the interview process or the resume that’s speaking as opposed to the real person?
Kristin: Yeah, and their values, what is it about that some of the scenarios in The Predictive Index that we didn’t see elsewhere and we dug into it.
Mike: Do you ever use it to on board, to help … Say the CEO is getting a temp Chief Operating Officer for the next six months, do you to ever say, here’s what you’re getting from an experienced resume perspective, but here’s what you’re getting from sort of the behavioral, just to manage expectations and help the onboarding go more smoothly?
Kristin: As you know, my favorite thing is, I call it the crystal ball. So when the CEO … The CEO takes the job assessment, the work style assessments on the executive side, and even before they interview them and they meet with them the first time, we give them what we call the cheat sheet.
Kristin: Here’s some suggested questions that, based on matching you two together, these would be some good things for you to discuss now. Then we’ll use the comparative, and even after the fact, once they’re working together, we’re able to give the CEO almost a crystal ball of, here’s who you’re working with, here’s a few things they’re not bad, but, you two just may need to adjust your styles, and here’s how you’re going to need to adjust them in order to work with each other, and avoid the conflicts that normally come out at 90 days, you go, okay, we had a couple of rough situations, we now know how to handle each other, we’re doing great.
Kristin: The Predictive Index actually helps you discuss that upfront, you get some common language, and it can predict those situations that will happen. You just discuss them up front and have that open communication.
Mike: I’m understanding your business model a little better, the match making and then there’s a little bit of marital counseling from time to time.
Kristin: Absolutely, business is not static, CEO’s are not static, there is nothing static about it, so you’ve got to be able to go with that flow as we say. And yes, it is helpful.
Mike: Well Kristin, thank you for sharing. I really think this is new for a lot of people, they don’t have that much familiarity with interim executive roles, and it seems like it has a, not only a really important niche, but a growing need and demand, both in times of growth and in times of recession.
Mike: So, it’s great to hear from an expert, so, Kristin McAlister, thank you, I really appreciate you bringing your story to bear today.
Kristin: I appreciate it, thank you Mike and all that you do.
Mike: Great, thank you.