One growing trend in business management is the hiring of a fractional executive who can offer strategy, planning and management services for specific functions of your company. This practice is becoming more common for startups and growing businesses that either don’t need a full-time executive in the C-suite or require a more cost-effective solution.
So what is a fractional executive?
In most cases this is an executive or senior business leader who agrees to devote a fraction of their time to a company for a defined or on-going period. The contracted nature of this agreement typically allows the company to more readily identify a candidate without the complication of a long-term commitment that comes with filling a tradition executive position.
For many businesses looking to add a fractional executive is to gain skills and management support in area where the current team might not have expertise, or where the business is experiencing growth beyond what the current team and effectively support. While fractional executives often bring strong strategic skills, in many instances companies also need execution and organizational development skills to carry their plans forward and provide a level of on-going leadership to existing staff. A recent Forbes article stated that, “…the most important trait of a successful fractional CMO is his/her ability to translate the CEO’s vision into an insightful, measurable, and actionable marketing plan.”
As companies experience growth, they may find that their current leadership no longer has the capacity, and/or the operational skills it takes to manage the many different functional activities of the organization. We have found that many organizations have the staff to support their activity, but may not have the leadership available to ensure they are coordinating their resources effectively.
So how does this work?
The work performed by a fractional executive may be different for each of their clients. Fractional executives will often perform some of their work in the client’s office and some outside. The executive might commit every Tuesday and Thursday to work on your business and be in the office one or those days each week. In some instances, particularly during intense activity or for key projects, the executive many work in the client’s office full-time for a short period of time. However, because the fractional executive typically has a number of clients simultaneously, they will often have to meet regularly with each of their clients. Some executives seek out business partnerships on their own, but it is becoming increasingly popular to work within organizations that take care of paperwork, find prospective clients, offer branding, accounting and legal support and oversee many other company overhead functions.
Our experience at Apprize Solutions
Over the last five years our business has transitioned from a traditional consulting focus to this fractional executive or contracted management services model. Early on we determined not to become one of this consulting firms that just made a lot of recommendations but was never available to help implement the plan. Prior to launching our firm, I served as a VP/General Manager for a global manufacturer and system integrator. I saw plenty of examples where consultants made recommendations that were never implemented. Sometimes this was because the business leaders didn’t agree with the consultant’s conclusions, but many times, it seemed to me, that the business leaders weren’t actually capable of carrying out the plans. Of course, that wasn’t always capability, sometimes it was capacity.
As a result, from the launch of our firm, we began talking with customers about a phrase we coined as “business engagement”. The concept was that instead of just making recommendations, we wanted to hang around and help effect the changes we proposed. We wanted to model good management practices, we wanted to be available to coach and reinforce new ways of operating, and we wanted to ensure that new processes actually got adopted. So, as we began operating in this fashion, we found the our client’s liked it and in fact, many of them asked us to stick around and not only help them implement these new strategies and processes, but to manage key aspects of their business. In one case, we took on the sales and marketing role for a small business, expanded their product offering, implemented new lead generation processes, realigned the team, and then hired staff.
Results and Conclusions
So what happened to that client? Once these plans took hold and this functional area was operating successfully, we helped hire a full-time sales and marketing manager. By the time we identified this new leader, the business had grown to support the role and the new leader walked into a business with a plan for continued growth. Of course, not everything was finished and we purposely looked for a leader with strengths in process and organizational leadership who could continue the progress made up to that point.
While it is certainly true that hiring a full-time executive might provide for a faster implementation of key initiatives, for many businesses it is just not realistic, or even necessary to have someone on-site every day. In our experience, many businesses are better off investing in the growth of their “operating” staff (sales persons, shipping clerks, purchasing agents, engineers, customer support reps, IT personnel, production operators, etc.) then hiring additional full-time executives.
Fractional executives can fill gaps in many C-suite roles – COO, CMO, CFO, CRO, CTO, etc. If your looking to expand your business, or finding that your current leadership team is stretched thin, it might be time to consider whether a fractional executive might just be the catalyst you need to help jump-start growth. Adding a fractional executive can help you deliver on your promises to customers and take your business to the next level. ApprizeSolutions is here to help!