Fractional Attraction
When Businesses Fall for Part-Time Executives
You're probably reading this article because you're wondering what's up with all of the hype surrounding "fractional executives." The goal of hiring a fractional executive is to provide executive-level guidance and insights on a part-time or temporary basis. In this article, I'm going to cover the basics of what a fractional executive is, how to know when you need one, and finally, how to know when you've outgrown one and it's time to hire full-time. Ok, let's get right to it by addressing the obvious question: how does a fractional executive differ from a full-time hire?
Fractional Executive vs Full-Time Hire
Fractional executives are part-time positions where an expert with executive experience is hired for a fraction of the cost of a full-time hire. You benefit from the executive's full experience but at a fraction of the cost. The benefits of hiring a fractional executive go beyond just cost savings, let's unpack the benefits.
Benefits of a Fractional Executive
The benefits of hiring a fractional executive include:
Cost-Effectiveness: You'll benefit from their full experience for a fraction of the price of a full-time hire.
Flexibility: By leveraging a fractional executive as needed it allows you the flexibility of adjusting to changing business needs over time.
Expertise: A wealth of experience is a key component for any fractional executive.
Objective Insights: An outside perspective can be invaluable to your company when it comes to problem-solving. Being an outsider frees your fractional executive from the constraints of office politics and groupthink.
Common Examples of Fractional Executive Roles
Offering an executive role in a "fractional capacity" necessitates that the role doesn't require the full-time attention of the executive providing the service. If the role requires full-time attention, then you need a full-time hire. The following are a few examples of fractional executive roles:
Fractional CEO: A fractional CEO provides strategic leadership and helps set the company's overall direction. They often work with businesses that are in transition or need experienced leadership to take them to the next level.
Fractional CFO: A fractional CFO manages the financial actions of a company. They are responsible for financial planning, tracking cash flow, analyzing financial strengths and weaknesses, and proposing corrective actions. They are ideal for companies that need financial expertise but do not have the budget for a full-time CFO.
Fractional CMO: A fractional CMO leads the marketing strategy of a company. They are responsible for overseeing marketing efforts, brand management, and customer acquisition strategies. Fractional CMOs are often hired by startups and SMEs that need marketing leadership but cannot afford a full-time executive.
Fractional CTO: A fractional CTO (Chief Technology Officer) oversees the technological needs of a company. They manage the company's tech strategy, research and development, and tech-related initiatives. For startups and small businesses, a fractional CTO can provide technical leadership and guidance without the cost of a full-time executive.
Is a Fractional Executive Right For Me?
Determining if a fractional executive is right for your company depends on more factors than just cost. Let us unpack each of these below.
Budget Constraints: Hiring a full-time executive is expensive. For example, the median salary for a CTO in California is currently $324,908 according to Salary.com. Hiring a fractional executive will be a fraction of the price.
Skill Gaps: If your team is lacking specific areas of expertise, such as technology, finance, or marketing, a fractional executive can fill those gaps without the need for a full-time hire.
Growth Stage: Maybe your company is growing rapidly but you don't know how to scale. A fractional executive with the right skill set can be invaluable for making sure your growth is scaleable.
Project-Based Needs: When your company has a specific project requiring executive oversight, a fractional executive could be a good choice. Perhaps you're launching a new product or SaaS and you don't want to let your engineers loose without technical guidance.
Lack of Time: Your current executives are overloaded and unable to devote the time necessary for strategic planning and leadership. Bringing in a fractional executive can help ease the burden on your executive team.
Before you decide, it's important to carefully evaluate your company's needs and resources. If you decide to move forward, take the time to find the right fractional executive who has the skills and experience that align with your company's needs.
Signs It's Time to Dump Your Fractional Executive
It was great while it lasted right? Alas, all good things must come to an end. As your organization grows there will inevitably come a time when it's time to dump your fractional executive and opt for a full-time hire. Here are some signs it's time to move on.
Growing Business Needs: The demand for your fractional executive has outgrown their capacity.
Financial Capability: Your company has grown to the point where you can comfortably hire a full-time executive.
Need for Dedicated Leadership: There is an increased need for a dedicated leader that shares the long-term vision of your company and can give you their full attention.
Employee Feedback: Your team members express concern that they're not getting consistent leadership or the guidance they need to work effectively.
It's important that the transition from a fractional executive to a full-time hire be handled with care and managed in a way that provides continuity to minimize disruption to your employees.
Final Thoughts
Despite the potential challenges, many companies find that the benefits of hiring fractional executives outweigh the downsides. Before deciding if a fractional executive is right for you, it's important to examine your organization's needs and budget. If you know another company that has used one it can be helpful to ask how that experience went and what they would change in the future.
