The Advantages of Fractional Leadership
Takeaways
Discover how fractional leadership offers expertise and flexibility at reduced costs, a strategic advantage for dynamic business growth.
In the fast-paced environment of launching and scaling an organization, we are all looking for every advantage we can find. And in most cases, our vision exceeds the resources we have to work with. One of the concepts that many organizations are using to fix this dilemma is fractional leadership. It is not a new idea to bring in a seasoned leader on a part-time, contractual basis to speed up a product launch, fill in a gap after a departure, or fix a challenging problem, but the rate at which the concept is being adopted today is unique.
So what is a “fractional leader?” Essentially, it’s an executive who assists a company and shares their expertise for a fraction of the time (which also means a fraction of the cost). Fractional leaders have been serving in back-office roles—human resources, finance departments, etc.—for years, but they are now common throughout the C-suite.
Fractional executives can also focus narrowly on key initiatives instead of getting sucked into day-to-day distractions or office politics. Fractional executives are there to get the job done, providing the benefits of specialization at a fraction of the cost.
Because they are working in multiple organizations at once, they are often more in tune with the latest efficient infrastructure for your business, ensuring it's customized to your specific stage and scale.
Fast Company, Forbes, Entrepreneur, and LinkedIn are all heralding the new era of interim and fractional leadership sometimes referred to as Expertise as a Service (Eaas) or Leadership as a Service (LaaS). Here are some of the key advantages behind the surge in this approach.
Experience and Expertise
Fractional executives have climbed the peak that you are scaling before you. They know the route, where to set up camp, and where the dangers are. How many people on your leadership team have scaled a company like yours before? Why wouldn’t you leverage the know-how of an experienced guide to show you the way forward instead of trying to reinvent the wheel alone?
Along with their deep experience, most fractional executives have a background in consulting, bringing proficiency along with advising skills. Most career executives hold 5-6 positions in their careers while fractional executives have worked with dozens or even hundreds of organizations, giving them exposure to a much wider universe of systems, models, challenges, and solutions to draw from. That extensive experience provides fractional executives with unparalleled expertise and insights, enabling them to deliver faster, more effective solutions for your organization.
Fractional executives are not only expert fire-fighters, extinguishing the flames of challenges to your business, but they will also diagnose the structural issues those challenges created, build the foundations of culture and trust, and train the team to avoid that challenge in the future.
Whether raising funds with a new segment, expanding into a new territory, or launching a new program, heading into the unknown is much easier with a seasoned guide leading the way.
Cost Savings
Hiring C-Level talent may feel like you are trying to balance quality and affordability, but what if there was a way to hire affordably and still get the highest quality? The interim and fractional model does just that. Whereas a full-time C-level leader will command a high salary, an attractive benefits package, and usually entails recruitment costs, a fractional leader works a fraction of the time for a fraction of the cost.
Unlike hiring a full-time executive, you can work with fractional executives on an as-needed basis, allowing you to enjoy the benefits of a seasoned executive without committing to a long-term, super-high expense. This can be especially attractive for small to mid-sized businesses that want to grow but have limited resources and usually don’t need a full-time executive in every post. With interim or fractional leadership you only pay for what you need.
Time Efficiency and Pacing
If you have gone through the process of an executive search, you know it can take up to a year, and that is with paying a search firm to speed things up. Fractional leaders can often start within 3-4 weeks, fast-tracking your path to scale ahead of your competitors.
Instead of waiting for a full-time hire to find their feet and start putting a plan into action, an interim or fractional leader is accustomed to making an instant impact and hitting the ground running. As fractional leaders have a narrower focus than their full-time equivalent, they can act faster and focus on a clear set of objectives right from the start.
Less Risk
Full-time hires are laced with risk. From hiring someone too senior for the nitty-gritty tasks of scaling to taking on someone who upsets company culture, getting a full-time hire wrong is a costly mistake. And it is common. A bad hire can take 12-24 months to rectify and cost the company up to 27 times the person’s salary, but fractional executives join on a short-term basis with a clear contract and no strings attached.
Instead of hiring the wrong skill set or realizing you need a leader with new skills 12 months down the road, a fractional leader is hired for the exact skills you need, right when you need them.
Maintaining a carefully honed culture is difficult as you scale, but as interim and fractional leaders are short-term external hires, they don’t disrupt the team dynamic and avoid office politics.
Flexibility and Scalability
You may know that you only need a leader in a post for a season or want flexibility for a variety of reasons. Interim and fractional models give you exactly that. You can create short-term contracts and walk away when they end without any severance or feeling like it was a messy breakup.
For many full-time executives in small or mid-sized companies, 80% of their time is spent on tasks that could be done by more junior staff if they are given good training. This means the vast majority of companies don't necessarily need a full-time executive, as the role doesn't require constant high-level devotion. Fractional executives can be hired on a flexible basis, ranging from a few hours a week to a few days a week. The term can be for just a few months to a longer-term commitment over several months. This allows the business to scale up or down as needs change, ensuring that you have the right amount of support when you need it.
In addition, instead of joining with a wide-ranging portfolio, cross-functional responsibilities, and promotion aspirations, fractional leaders join with a set of pre-agreed tasks and are already aligned with the CEO’s vision.
Objectivity and Perspective
Interim and fractional leaders’ outsider status removes the chance of burnt-out status-quo thinking, enabling them to make impartial strategic decisions more easily. Often that external perspective removes pressure from the CEO, helping them ward off silos and tunnel vision.
Fractional executives offer an outsider's perspective on operations and strategy, providing unbiased feedback and advice to help make better-informed decisions. Done well, it feels somewhat like a partnership, allowing for a more even relationship, working at eye level rather than the traditional, more restrictive manager-employee relationship. This approach can be especially valuable when identifying blind spots or areas for improvement, as fractional executives bring a unique perspective thanks to their experience with a multitude of businesses.
What’s the difference between a Fractional and Interim Leader?
Interim Leaders typically fill a gap between permanent hires, which can take 6-12 months, and your business can’t afford to wait. They’re often required for between 3-5 days per week for 4-8 months.
Fractional Leaders or executives are used when a company isn’t quite ready to hire a full-time, permanent leader. They give organizations access to world-class talent at a fraction of the cost. They’re often required for 1-3 days per week for 6 - 12 months.
How Do You Know If You Need a Fractional Leader?
You have outgrown your systems and can’t support growth
You need more leadership during a period of transition or restructuring
You need expertise in a particular area
You are up against a challenge and need an advisor to get you through it
You feel that you are stuck working in your business but want to be working on your business
You want to launch into something new but know your team lacks the leadership horsepower to do it successfully
You feel you are lagging behind best practices and need help getting caught up
You want to create a healthier culture and better leadership practices but need help getting started and a roadmap for lasting change
You feel stuck strategically and need help envisioning the next stage of your business
Choosing the Right Fractional Leader for Your Organization:
Define what you need - Knowing what functions need to be filled, what projects need to be managed, and what goals you have will help clarify what type of fractional leader you need. Often a fractional leader will be happy to meet with you and help define the scope of the work as part of their engagement process.
Assess their fit – Make sure that the fractional leader will work well with you and your team. Their expertise may be high but if they do not have a personality that will be complementary to you or your team, it may not be the right fit.
Look for alignment of values – Choose a fractional leader who will share your passion for your work, value your team, align with your culture, and live out your values. Just because someone is fractional, because you are placing them in a leadership role, they still need to embody the ethos of the organization.
Ensure you and your team are ready – Most fractional executives will expect you to delegate a certain amount of control and consult them with key decisions, listening closely to their advice, and will expect dialogue when you don’t follow their advice. They will see this as a partnership in which you empower them with other team members, giving them authority to make decisions. If you’re not prepared to treat this as a partnership and loosen the reigns, you may not have found the right fractional leader, or engaging one may not be the right fit for you.
When you partner with a fractional executive, you can tap into their specialized skills and expertise, giving your organization a competitive edge and positioning it for long-term success. Some companies have mistakenly assumed that short-term leaders are not as desirable because they aren’t invested in long-term success. Instead, organizations are realizing that they may actually help them find it. Ready to explore it further? Let’s chat.
