{"id":121879,"date":"2026-04-28T11:51:38","date_gmt":"2026-04-28T09:51:38","guid":{"rendered":"https:\/\/www.fup-ag.com\/blog\/return-on-interim-managers-why-we-finally-need-two-key-metrics-in-interim-management\/"},"modified":"2026-08-27T14:59:55","modified_gmt":"2026-08-27T12:59:55","slug":"return-on-interim-managers-why-we-finally-need-two-key-metrics-in-interim-management","status":"publish","type":"blog","link":"https:\/\/www.fup-ag.com\/en\/blog\/return-on-interim-managers-why-we-finally-need-two-key-metrics-in-interim-management\/","title":{"rendered":"Return on Interim Managers: Why We Finally Need Two Key Metrics in Interim Management"},"content":{"rendered":"
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f&P BLOG<\/span>Return on Interim Manager<\/span><\/h1><\/div>\n <\/div>\n\n\n
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Return on Interim Managers:<\/span>Why We Finally Need Two Key Metrics in Interim Management<\/span><\/h2>

Author: Veit Velten<\/a><\/strong><\/p>

Ever since I started working as an<\/strong> interim manager, I\u2019ve repeatedly come across the term \u201creturn on interim manager\u201d<\/strong> on LinkedIn, in conversations with colleagues, or at events .<\/strong> It almost always refers to the same thing: a metric that can be used to explain to potential clients why interim management isn\u2019t just a cost\u2014it makes good business sense.<\/p>

That\u2019s essentially correct. Still, this topic has bothered me for a long time. Not because the idea is wrong, but because the discussion almost always remains superficial. After all, what I\u2019ve practically never found is a truly reliable definition of this metric. And even more surprising: I certainly haven\u2019t found any useful framework that would allow for a fair comparison of<\/strong> the performance of interim managers with one another<\/strong>.<\/p>

That\u2019s exactly where the real problem begins for me, because of course there\u2019s a significant difference between someone achieving \u20ac1 million in savings<\/strong> at a company with \u20ac10 million in revenue<\/strong> and someone doing so at a company with \u20ac1 billion in revenue<\/strong>. The absolute figure is the same. The actual performance behind it certainly isn\u2019t. Anyone who argues solely on the basis of absolute savings is oversimplifying things. And anyone who believes you can automatically infer the quality of an interim manager from this is ultimately comparing things that aren\u2019t really comparable.<\/p>

That is why I am convinced that we need not one, but two key metrics.<\/strong><\/p>

The first metric must show the client whether hiring an interim manager was financially worthwhile; the second metric must allow for comparisons between interim managers\u2014taking into account the size of the company and, consequently, the varying degrees of difficulty. Only when these two perspectives are clearly distinguished does a catchy buzzword become a truly useful tool for management and advocacy.<\/p>

In what follows, I would like to do just that: clearly derive these two metrics, assess their significance, and explain why, in my view, this distinction is long overdue.<\/p> <\/div>\n <\/div>\n\n\n\n\n

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Why the \u201ctraditional\u201d ROIM usually falls short<\/span><\/h2>

Savings divided by the cost of the interim manager.<\/strong><\/p>

Sometimes only the fee is taken into account; sometimes travel expenses are added; occasionally, other incidental costs are included as well. That\u2019s better than no economic analysis at all\u2014but in reality, it\u2019s usually too limited, too vague, and too short-sighted.<\/p>

The problem starts with the perspective: Many of the effects of an interim manager are not limited to the month they spend at the company\u2014and often not even to the current fiscal year. Anyone who changes structures, leverages procurement, stabilizes manufacturing processes, introduces robust working capital management, creates transparency, or restores an organization\u2019s ability to function during a crisis generally generates effects that extend far beyond the duration of the assignment. Yet it is precisely this sustainability that is often overlooked in the discussion.<\/p>

There is also a second point: Often, the focus is solely on direct cost savings. Yet the economic benefits of an interim manager can be much broader. They can manifest themselves in:<\/p>

  • direct cost savings,<\/li>
  • Efficiency gains,<\/li>
  • Improvements in margins,<\/li>
  • greater delivery capacity,<\/li>
  • declining error costs,<\/li>
  • improved liquidity,<\/li>
  • damage prevented,<\/li>
  • or in the fact that a company becomes capable of being managed again in the first place.<\/li><\/ul>

    Not all of it is immediately easy to measure. But much of it can certainly be quantified in monetary terms.<\/p>

    And then there’s a third problem: In the discussion, two completely different issues are regularly lumped together.<\/p>

    Question 1:<\/strong> Was it worth it for the company?<\/p>

    Question 2:<\/strong> How did the interim manager’s performance compare to that of other interim managers?<\/p>

    It’s just not the same thing.<\/p>

    From the client\u2019s perspective, a project may have been a complete success even though it took place in an environment where significant leverage was relatively easy to achieve. Conversely, a project carried out under difficult conditions, in a small company, and with limited leeway can represent an exceptional achievement, even though the absolute monetary impact may appear smaller.<\/p>

    If you don’t keep these two questions separate, you won’t end up with a clear metric, but merely a figure that looks good.<\/p> <\/div>\n <\/div>\n\n\n\n\n

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    Key Metric 1: ROIM from the Client’s Perspective<\/span><\/h2>

    Let’s start with the company’s perspective. That is the most obvious and most important perspective.<\/p>

    Essentially, the client wants to know: Was hiring the interim manager a sound business decision?<\/p>

    To be more precise: What economic value has the interim manager generated relative to the cost of his assignment?<\/p>

    That’s a classic investment question. And that’s exactly how it should be treated.<\/p>

    The Formula<\/strong><\/p>

    The ROIM from the client’s perspective<\/strong> is:<\/p> <\/div>\n <\/div>\n\n\n\n\n

    \"\"<\/figure>\n\n\n\n
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    It says:<\/p>

    • ROIMAG<\/sub><\/strong>: Return on Interim Manager from the Client’s Perspective,<\/li>
    • Nt<\/sub><\/strong> for the economic benefit in year t<\/em>,<\/li>
    • r<\/strong> is the discount rate,<\/li>
    • KIM<\/sub><\/strong> for the total cost of the interim manager.<\/li><\/ul>

      The total cost consists of:<\/p> <\/div>\n <\/div>\n\n\n\n\n

      \"\"<\/figure>\n\n\n\n
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      So, from:<\/p>

      • H<\/strong> = Fee,<\/li>
      • R<\/strong> = Travel expenses,<\/li>
      • S<\/strong> = other incidental expenses.<\/li><\/ul>

        The benefit for a given year may, in turn, consist of:<\/p> <\/div>\n <\/div>\n\n\n\n\n

        \"\"<\/figure>\n\n\n\n
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        featuring:<\/p>

        • Et<\/sub><\/strong> = direct savings,<\/li>
        • Mt<\/sub><\/strong> = monetized efficiency or margin improvements,<\/li>
        • Vt<\/sub><\/strong> = avoided damage, losses, or risks.<\/li><\/ul> <\/div>\n <\/div>\n\n\n\n\n
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          Why Discounting Is an Essential Part of the Process<\/span><\/h2>

          For me, this is exactly where a serious metric differs from a pretty marketing slide.<\/p>

          If an interim manager creates an impact that lasts not only today but also in the coming years, then that impact must, of course, be factored into the calculation. At the same time, from a business perspective, a benefit realized in three or five years is not the same as a benefit realized today.<\/p>

          That is why the formula requires a discount factor, so that a simple retrospective analysis can be transformed into a robust economic assessment. At the same time, this prevents short-term one-time effects from being overvalued, while sustainable structural improvements are overlooked. In my view, this is particularly crucial in the context of restructuring and turnaround. Those who focus solely on short-term savings in this context often fail to see the actual value contribution.<\/p> <\/div>\n <\/div>\n\n\n\n\n

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          How to Interpret This Metric<\/span><\/h2>

          A ROIMAG<\/sub> of 3.0<\/strong> means that for every euro the interim manager cost, 3 euros in economic value were generated.<\/p>

          A ROIMAG<\/sub> of 1.0<\/strong> means that the benefits exactly equal the costs.<\/p>

          A value below 1.0<\/strong> would mean that, based on the effects taken into account, the investment did not fully pay off economically.<\/p>

          This metric can also be expressed as a percentage:<\/p> <\/div>\n <\/div>\n\n\n\n\n

          \"\"<\/figure>\n\n\n\n
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          In practice, however, I often find the ratio to be more powerful because it is intuitively understandable.<\/p> <\/div>\n <\/div>\n\n\n\n\n

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          Why This First Key Metric Is Important<\/span><\/h2>

          This metric provides the right answer to a potential client\u2019s question: Why should I spend money on an interim manager? The answer is simple: Because\u2014when calculated accurately\u2014the assignment creates added value that exceeds the costs.<\/p>

          This transforms a discussion that is often driven by emotion or personal experience into a business-oriented, logical argument. And that is crucial, especially in times of tight budgets, high uncertainty, and difficult investment decisions.<\/p>

          But this is precisely where the limitations of this metric begin, because it only answers the question from the client\u2019s perspective. It does not yet answer the question of how to fairly compare two interim managers.<\/p> <\/div>\n <\/div>\n\n\n\n\n

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          Key Metric 2: ROIM for Comparing Interim Managers<\/span><\/h2>

          As soon as you want to compare the performance of interim managers with one another, that first metric alone is no longer sufficient.<\/p>

          Why? Because the playing field matters.<\/p>

          In a large company, even small percentage improvements are often enough to yield very large absolute results. In a smaller company, the same absolute amounts are usually much harder to achieve. Ignoring this fact almost inevitably leads to skewed comparisons.<\/p>

          It’s kind of like comparing two sales managers based solely on their absolute sales figures, without taking into account whether one was in charge of a multinational corporation and the other of a small-to-medium-sized business.<\/p>

          That is exactly why a second metric is needed.<\/p>

          The Formula<\/strong><\/p>

          The size-adjusted comparative ratio is:<\/p> <\/div>\n <\/div>\n\n\n\n\n

          \"\"<\/figure>\n\n\n\n
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          It says:<\/p>

          \u03b1<\/strong> represents the degree of scaling.<\/p>

          ROIMadj<\/sub><\/strong> for the size-adjusted ROIM,<\/p>

          ROIMAG<\/sub><\/strong>: Return on Interim Manager from the Client’s Perspective,<\/p>

          U<\/strong> for company size,<\/p>

          Uref<\/sub><\/strong> as a reference value,<\/p>

          What can be used to indicate a company’s size<\/strong><\/p>

          The simplest metric here is annual revenue<\/strong>. It is readily available, transparent, and easy to communicate.<\/p>

          From a methodological standpoint, however, it\u2019s only fair to say that revenue isn\u2019t the perfect metric for every project. Depending on the task at hand, other metrics may be more appropriate, such as:<\/p>

          • Use of materials,<\/li>
          • Total cost basis,<\/li>
          • SG&A expenses,<\/li>
          • Purchasing volume,<\/li>
          • Production volume,<\/li>
          • On an EBITDA basis.<\/li><\/ul>

            Nevertheless, revenue is a good starting point for a general, market-relevant metric. It makes the logic understandable and practical.<\/p>

            Why a Reference Value Is Necessary<\/strong><\/p>

            The reference value U_ref is the fixed reference point against which all mandates are mathematically normalized. You can think of it as a common yardstick: Without it, the formula would know that a company is smaller or larger, but it wouldn\u2019t know what to use as the basis for that measurement.<\/p>

            If a company is exactly at this benchmark level, the ROIM remains unchanged. If it is below the benchmark, the performance is adjusted upward; if it is above the benchmark, it is adjusted downward. The \u20ac100 million used here is therefore not a rigid rule, but rather an easily communicable average value that serves as a plausible benchmark for many small and medium-sized businesses and industrial companies. Alternatively, one could also use the median of a peer group.<\/p>

            The Role of \u03b1<\/strong><\/p>

            The factor \u03b1<\/strong> determines the extent to which company size influences the ratio.<\/p>

            • \u03b1 = 0<\/strong> means: no resizing,<\/li>
            • \u03b1 = 1<\/strong> means: a strong linear fit,<\/li>
            • \u03b1 = 0.5<\/strong> means: moderate scaling via the square root.<\/li><\/ul>

              In practice, I consider \u03b1 = 0.5<\/strong> to be particularly plausible. A linear adjustment would often be too aggressive; it would favor small companies too heavily. The square root is more robust and closer to reality because, while difficulty is related to company size, it is not strictly linear.<\/p>

              The practical standard formula is therefore:<\/p> <\/div>\n <\/div>\n\n\n\n\n

              \"\"<\/figure>\n\n\n\n
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              A simple example<\/span><\/h2>

              Let’s consider two interim managers .<\/strong> Both generate a discounted economic benefit of \u20ac1,000,000.<\/strong> Both cost the company \u20ac200,000.<\/strong><\/p>

              First, the following applies to both:<\/p>

              <\/p> <\/div>\n <\/div>\n\n\n\n\n

              \"\"<\/figure>\n\n\n\n
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              From the perspective of the respective client, both proposals look equally good.<\/p>

              Now let’s look at company size.<\/p>

              Case A<\/strong><\/p>

              • Company revenue: \u20ac10 million<\/strong><\/li>
              • Benchmark: 100 million euros<\/strong><\/li>
              • \u03b1 = 0.5<\/strong><\/li><\/ul>

                Then we get:<\/p> <\/div>\n <\/div>\n\n\n\n\n

                \"\"<\/figure>\n\n\n\n
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                Case B<\/strong><\/p>

                • Company revenue: 1,000 million euros<\/strong><\/li>
                • Benchmark: 100 million euros<\/strong><\/li>
                • \u03b1 = 0.5<\/strong><\/li><\/ul>

                  Then we get:<\/p> <\/div>\n <\/div>\n\n\n\n\n

                  \"\"<\/figure>\n\n\n\n
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                  The message behind it<\/strong><\/p>

                  Both managers achieved a very attractive financial outcome for their clients, but the performance contribution at the smaller company\u2014relative to the company’s size\u2014was significantly more difficult to achieve and therefore deserves greater recognition.<\/p>

                  And that is precisely what this second metric highlights: it does not replace the client\u2019s perspective. Rather, it complements it with a second perspective that I consider absolutely essential: the fair comparability of performance<\/strong>.<\/p> <\/div>\n <\/div>\n\n\n\n\n

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                  Why This Distinction Is Important for the Industry<\/span><\/h2>

                  I believe this discussion is long overdue, because interim management is often marketed based on speed, experience, resilience in crises, implementation skills, and seniority. All of that is true. But the market is becoming more professional. Clients are becoming more critical. Budgets are getting tighter. Decisions are being scrutinized more closely.<\/p>

                  This also increases the pressure to clearly demonstrate the actual value added. And that\u2019s exactly where it\u2019s no longer enough to rely solely on general statements such as:<\/p>

                  • “The manager was worth the money.”<\/li>
                  • “It had a quick effect.”<\/li>
                  • “He stabilized the company.”<\/li><\/ul>

                    All of that may be true. But it remains speculative as long as the economic impact isn’t clearly demonstrated.<\/p>

                    • A robust ROIM from the client’s perspective<\/strong> helps make the benefits of interim management compelling from a business management standpoint.<\/li>
                    • A size-adjusted ROIM<\/strong> helps to compare market performance more fairly and finally move away from purely absolute narratives of success.<\/li><\/ul>

                      This could be a real step forward, especially for providers, platforms, and larger customer groups. After all, it would make the market a bit more measurable, transparent, and professional.<\/p> <\/div>\n <\/div>\n\n\n\n\n

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                      What we mustn’t forget, despite all our enthusiasm<\/span><\/h2>

                      Of course, these two metrics don’t solve every valuation problem either, because it remains important to clearly define,<\/p>

                      • which benefit components are actually recognized,<\/li>
                      • how long the effects are likely to last,<\/li>
                      • which discount rate is used,<\/li>
                      • which benchmark for company size is appropriate from a technical standpoint,<\/li>
                      • and effects that, while real, are difficult to quantify in monetary terms.<\/li><\/ul>

                        Especially during crises and extraordinary situations, there are contributions that everyone in the company feels but that cannot be quantified in euros at first glance: clarity, structure, speed, decision-making ability, credibility with banks, composure among leadership, or simply the ability to keep a company together during a delicate phase. That, too, is part of effective interim management.<\/p>

                        Nevertheless, I am convinced that this is not an argument against key metrics, but rather an argument for better key metrics.<\/p> <\/div>\n <\/div>\n\n\n\n\n

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                        Conclusion<\/span><\/h2>

                        The term \u201creturn on interim manager\u201d<\/strong> is frequently used, but surprisingly rarely clearly defined. That is precisely the problem: as long as we simply say that an interim manager costs money but delivers more than he costs, this may be intuitively correct\u2014but it remains vague.<\/p>

                        In my view, we should therefore consistently keep these two things separate.<\/p>

                        First:<\/strong> the economic benefit to the company. From the client\u2019s perspective<\/strong>, this requires a ROIM<\/strong> that compares the total discounted benefit to the total costs.<\/p>

                        Second:<\/strong> the comparability of interim managers’ performance. This requires a size-adjusted metric<\/strong> that takes into account the fact that achieving the same absolute savings can be significantly more difficult in a small company than in a large one.<\/p>

                        That is exactly why we need two key metrics<\/strong> in interim management instead of just one<\/strong>.<\/p>

                        • The first one highlights the benefits for customers.<\/li>
                        • The second one makes it easier to compare performance fairly.<\/li><\/ul>

                          And only when taken together do they form a picture that comes much closer to reality.<\/p>

                          Perhaps that is exactly the next step our industry should take: moving away from catchy buzzwords\u2014toward a more precise, robust, and professional way of discussing impact, because ultimately, it\u2019s not just about whether an interim manager costs money, but about what he has actually achieved in relation to that cost\u2014and how well that performance truly stacks up in the market<\/strong>.<\/p> <\/div>\n <\/div>\n\n\n\n\n

                          <\/p>\n","protected":false},"excerpt":{"rendered":"

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                          f&P BLOG<\/span>Return on Interim Manager<\/span><\/h2>\n<\/div><\/div>\n

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