Fractional executives: all the brains for a small portion of the price
If you’re a mid-sized business, creating the ideal executive team may be a challenge. From a financial stance, having a team of full-time executives may be at odds with your bottom line. The trend among small businesses in this quandary is to add a fractional executive to the team who can offer strategy and advice in a more cost-effective and efficient manner.
What is a fractional executive? Essentially, a fractional executive takes on an executive role at a company for a “fraction” of their time, working more like a consultant and eliminating the need for lengthy interviews and high-end salaries. Fractional executives come with prior experience in the management role you need to fill. Often, fractional executives fill the responsibilities of Chief Financial and Chief Marketing Officer roles, and less so as Chief Operating and Chief Technology Officer. C-Level execs can also fill the chair of the CEO.
How do fractional executives work? There are different ways to apply the fractional executive role within your company. A qualified manager can work virtually or in person and can tailor their schedule to meet your requirements.
Why choose fractional over traditional executives? The primary reason a business opts for a fractional executive is because the cost-benefits are huge. Given the average CxO’s annual salary, many small to mid-size businesses don’t have the cash flow available to support that amount. However by engaging a fractional executive, they gain access to top talent, and spend less on payroll, retain savings on taxes, avoid retirement benefits, and minimize traditional hiring expenses.
A smaller company may also find they don’t need a full-time CFO or CMO, as long as their fractional executive generates the plan and systems to get them up and running. Having a senior temp to fill in the gaps and initiate action plans may be just what your business needs.
Where do I look for a fractional executive for my company? If you’re looking for an independent fractional executive, your contacts may know individuals who are willing to serve in this capacity. They may not market themselves as a “fractional executive” per se; they more likely identify themselves as a consultant or contract executive. C-Level has done the legwork already, by qualifying and assembling a team of execs who wish to offer fractional or interim services to an organization. The result is a pool of broad and deep expertise in all functions of business and specific familiarity with many industry sectors.
Scaling a business is hard. There is a give and take where management must develop core processes and delegate appropriately, or it is impossible to grow. And yet, there’s limited cash to hire and delegate to appropriately skilled people. Fractional executives are a tremendous benefit to companies in this stage. Firms can get through the messy middle while also staying lean.
What should you do next? Your company will need to consider whether adding a fractional executive is the right move. For small and mid-sized companies, bringing on someone temporarily to lend an outside perspective, and to direct executive tasks that may not be a strength of anyone within the organization, can be a very efficient way to build a growing business. Contact C-Level if you would like to discuss your specific situation and the next steps.