A fractional executive is a skilled and experienced executive working in senior-level management, as a director, VP, or other C-level roles. For instance, they provide the particular set of skills and experience of a C-level executive at a fraction of the cost to small or mid-size companies that don't need to hire them full-time or don't have the budget to do so. This changes the status quo of the acquisition of talent for small and mid-size companies because these experienced professionals can fill an executive role for a fraction of the cost of hiring a full-time employee.
Your business needs a fractional executive if you require professional help to manage through a tough spot like a shift in the economy, moreover, it is possible that your growth may have exceeded your operating capacity, therefore, your company needs to have access to a C-level executive to assist you even if you’re lacking the funds for a full-time hire.
Fractional executives are highly skilled professionals with experience in several companies or industries, a broad network of contacts, and a problem-solving track record to help your business scale and grow. Having a part-time executive in critical leadership spots of your business creating effective action plans may be what your company needs.
For instance, within the first years of a company, it is more than likely to make mistakes while recruiting new talent, costing your company money and time. Due to this, it is critical to make the right hire in order to achieve the results that you are looking for.
Fractional executives work creating action plans according to your business-specific needs, running their own consulting companies, or as independent contractors. Also, they could join your organization as a part-time employee. Certainly, this flexibility allows both parties to establish a customized work relationship.
This flexible relationship allows the company and the fractional executive to have thorough conversations to address goals, desired outcomes, strengths, weaknesses, and opportunities.
Overall, you can find fractional executives for every C-level management role with different skills and responsibilities. For example, a Chief of Staff to be in charge of bringing everything together between departments to improve your organization’s strategy and help achieve its goals. Also, a Sales executive who will be tasked to develop marketing and sales plans, analyze and improve your sales process and make recommendations to improve revenue. And finally, even a CEO to help redefine your company’s vision, services, or daily operations to improve capabilities and relevance.
This type of professional is likely to have more than one client, meaning they would have a schedule to accomplish all their commitments with each one of them. In addition, they can work virtually or in person and, most importantly, will do it with a goal-oriented perspective. In other words, they won’t be sitting idle in an office when not required, instead they will assess, diagnose and propose a strategic plan to solve a situation for your business.
Your business may need a fractional executive when you have outgrown your operating model and need to level up. For instance, if you are in a spot where your current operations are not keeping up to your expectations and are negatively affecting your revenue, then you need the experience of a fractional executive to help you improve.
Then, if there is a specific problem that needs to be solved but it is not mandatory to have a permanent hire for the task, like a shift in the economy, financial crisis, or a new product launched by a direct competitor, all these situations are potential crisis that will require specific experience but without the need to keep that addition to the team after the crisis is solved.
Besides, in the event of an untimely loss of a key executive that must leave your company, it may be a tough challenge to find someone as experienced to replace it. Fractional executives require almost zero training and for this reason, it becomes a great alternative in this situation.
They are also needed when you have a team with lagging peers, stagnated growth, or a decline in revenues that need to be updated and motivated back again with a new perspective. In other words, highly talented teams could be poorly aligned within a company, at this moment a fractional executive with experience as a CEO will help you solve this situation.
You may need a fractional executive when there is a lack of accountability for performance metrics, therefore, hiring an unbiased fractional executive to quantify this data will result in an honest analysis of your performance and an opportunity to improve it.
Why does it allow them to have more work freedom?
It is more than likely that when a business is starting, it could fail to recognize the right talent when hiring new employees. As a result of this, extra cost, pressure, and a deviation from a growth route are expected. For instance, this would result in founders or CEOs taking up responsibilities that they are more than likely not suited for.
For example, having the possibility of hiring a fractional executive for a new marketing or sales strategy, will free and allow the CEO to focus on management, dealing with potential investors, and helping employees to thrive to the best of their capabilities.
In addition, fractional executives require almost zero training, therefore, saving time since there is no need to train new talent, especially in times of crisis. Most importantly, instead of a full-time hire, having a fractional executive for a fraction of the cost becomes a cost-effective solution for small to midsize businesses.
A fractional executive tends to have monthly or goal-oriented fees, for this reason, after an honest and direct conversation with your fractional executive, you can have access to a top-level executive for a fraction of the cost. In addition, they provide freedom because they allow management to stop worrying about recruiting talent or paying high-level salaries that will break havoc on their budget.
To summarize, the cost of opportunity of not having the right person for the job is eliminated because it is possible to find the perfect executive who fits the specific needs of a company. For this reason, fractional executives allow small and mid-size companies to focus on scaling and growing instead of dealing with interviews and reviewing applicants in the middle of a crisis.