The backbone of every successful business is strong leadership. The strategy, innovation, and resilience a company possesses stem from the decisions made at the highest level. For most small businesses and startups, however, attracting and being able to afford full-time executives is a daunting endeavor. This is where fractional leadership comes in; a concept that allows small businesses to benefit from the extensive experience of an executive while also maintaining their budget.
Are you still trying to decide if fractional leadership is the right fit your business? You or your company does not have to worry anymore because this guide seeks to cover everything you need to know from the definition to the advantages it offers as well as the precise leader suited to take your company to the next level.
What is Fractional Leadership?
Think of fractional leadership as having an executive on speed dial. Rather than being enforced to a traditional 40 hour workweek, these professionals can work a few days a month or oversee specific strategic initiatives at a fraction of the cost. Not only does this provide targeted solutions to complex business challenges, it also allows companies to bring in someone who can actually assist them instead of being forced to pay someone full time who adds no value. This way, the executive is not committed to full time employment and is instead available on an as needed basis. Rather than every frosty Monday morning, imagine being able to decide when you need your CMO or CTO.
Common Fractional Leadership Roles
There are a plethora of roles a fractional executive can assume, these roles depend on the needs of your business.
Allowed is a glimpse of the highly sought after roles positions which startups allocate their resources towards:
Fractional CFO: Deals with strategy, fundraising, budgeting, and management of cash flows.
Fractional CMO: Focuses on marketing strategies, brand identity, and customer acquisition strategies.
Fractional CTO: Has a broad focus such as technology roadmaps, overseeing software projects, or aligning IT with business objectives.
Fractional COO: Improves business operations, process efficiency, and replication of production models.
This enables startups to compete effectively without incurring the additional cost of hiring employees on a full-time basis.
How Fractional Leadership Changes Everything
Hiring a fractional executive would optimize operations greatly and benefit the company more than simply saving money. The scarcity of resources has led companies to adopt this strategy.
1. Economically Efficient Leadership
Most C-Suite employees charge high fees as a standard measure, salary, benefits, equity, and other bonuses included. Startups unfortunately running on a tight budget will always find this challenging. Absence of budget isn’t at all a challenge for startups as fractional executives fulfill these demands.
Example: A struggling early stage software company with scaling issues was finally able to get their hands on a fractional CTO to guide their tech developing strategy.
In six months part-time working, the company was able to launch a stable product for 40 percent less than the amount it would cost to hire a full time CTO.
2. Availability of Focused Insights
Fractional leaders owned by a company bring years of experience into the company that is often built from being a Vice President or C-Level executive in known companies. Whether you’re executing a rebranding campaign, gearing up for a funding round, or putting out the flames during a manufacturing crisis, these experts provide specialized guidance.
3. Flexibility to Scale
Business priorities change over time, as do the goals set, and so do the limitations of leadership support. With fractional executives, you do not have to pay long-term for their services as you can scale their involvement as per your company’s current concerns.
Expert Quote: “As Catherine Chen, the CEO of GrowthPivot Advisors states: ‘A fractional leader provides the agility startups thrive on.’ They’re free to move along with the business in whatever stage it’s in. ”
4. Neutrality of Judgment
The absence of the fractional executives in the day-to-day culture of the company provides them with a more objective lean, new eyes, and unbiased views which is great during tough decision making, especially in transitional or crisis stages.
Challenges and Things to Think About
There is a challenge along with the advantages of implementing fractional leadership in an organization. These challenges can be tackled through good preparation and honest dialogue.
1. Team Integration
For a team, getting used to an executive they do not see on a day-to-day basis may pose some hurdles.
Cultivating trust and promoting effective collaboration requires patience, however the process can be streamlined.
Solutions
Send an email designed to introduce and properly brief the team on who the new member is and what role they will play in the organization – this personalization increases the chance of employee buy-in. Fractional leaders are often successful with team engagement because their focus is on accomplishing specific objectives.
2. Precise Expectations Work Wonders
Unclarified boundaries regarding the fractional executive’s areas of responsibility can create opportunity for misunderstanding.
Expert Tip: “As Aaron Patel, current Fractional CMO at Elevate Strategy Partners said, ‘clarity in deliverables and timelines is something we often overlook to our detriment, but the truth is, they are always guidelines – never optional.’ This is why Patel goes on to say ‘setting expectations upfront and clear avoids confusion and keeps the team aligned.’”
Contracting, KPIs, check ins and other simple tools ensure all parties are really aligned.
3. Short-Term Solutions versus Long Term?
While fractional workforce solutions are best suited for focused tasks, they do not tend to fill gaps left by long term leaders.
Solutions
Determine if the nature of your project would require ongoing support prior to sending the job offer. If a long standing organizational leader is indeed required, shifting over to the full time model when it makes sense should be considered.
Knowing now what fractional leadership is and why learning how to choose the right fractional executive is as important, below is an important guide to finding the ideal fit for your company.
Step 1: Understanding What You Really Want
Create a list detailing what your company will find most vital.
Multinational enterprises and small startups alike may wish to improve profitability, increase brand reach, and enhance operational efficiency. Therefore, identifying the motives for requesting a specific executive is imperative.
2. Seek Previous Job Positions Within Similar Business Sectors
Although broad experience is important, an executive consultant with prior work in the specific field will need less time to acclimatize. Most importantly, they will appreciate the particulars of the business.
3. Assess Behavioral Compatibility First
Members of senior management must challenge and motivate employees while also embodying the core principles of the organization. In addition, how does their working ethos and style blend with the current environment?
Interview Question Suggestion
“What would your approach be for fostering collaboration with an existing team while still challenging them to innovate?”
4. Considerable Praise and References Should Be Required
Be proactive in referencing the claims made by the candidate. Speak to previous employers to assess the candidate’s reliability, their punctuality regarding their commitments, and the actions they took to overcome obstacles.
5. Paid Platforms For Freelancers Or Recruiting Websites
Many websites focus on the matchmaking of businesses to part-time executives. Toptal and AdvisoryCloud are excellent examples.
Adjusting Your Approach Towards Business
Fractional leadership is the most practical approach for organizations seeking top-level leadership expertise on an as needed basis. This allows many new and developing companies to keep pace with established conglomerates.
You will be positioned for success by taking on a new leader that is a perfect fit for the role and developing expectations up front.
Considering fractional executive recruitment for your firm? Embrace the opportunity to experience unmatched business growth with skilled leadership.
