What is a Fractional Executive?
Fractional executives are elite operators with functional expertise and tactics required to achieve objectives
You might have heard the term ‘fractional executive’ mentioned recently at a meeting. Or perhaps you read about the rising trend of ‘outsourced executives’ and sat back scratching your head.
You are right to wonder. When I first heard the term I thought: Aren’t fractional executives just a fancy new term for startup consultants? How effective can it be to outsource executive talent if they are not familiar with me and my companies culture.
But after working as a fractional executive for years now, I can tell you three things.
1. Fractional executives represent the next chapter of startup consulting services. They are not strategizing on the sidelines – on the contrary, they are experts at integrating into numerous different company cultures. This exposure is invaluable for themselves and their clients.
2. Fractional leadership exists in all functional areas of a company. While we hear most about fractional CIOs and CTOs, interim executives exist in many different capacities.
3. Hiring proven operators is a cost-effective ways for a startup, high growth, or transforming company to hit specific performance targets. Performance targets include an investment strategy, due diligence support, sales growth, M&A strategy and execution, turn arounds, post-acquisition integration, and more.
Fractional Executives Defined
A fractional executive is a high-level professional that works in an advisory and implementation capacity with a company. The type of company is usually an early growth startup, as the input offered by an experienced executive can propel fast growth over time. Fractional executives typically:
– Fill C-level positions in a company
– Work in a part-time capacity
– Receive payment on a retainer basis
– Offer the same reliability of outcomes you would expect from a full-time hire
– Provide strategic insight and change leadership to achieve stated objectives
I like to think of fractional executives as freelancers playing the role of executive assistant. These are folks who have risen to the top of their field and are now interested in working with growth-stage companies rather than corporations. Although they work on a part-time schedule – this is where the phrase ‘outsourced talent’ comes from – fractional executives are available around the clock to be a sounding board for founders, making them truly part of the company culture.
But what kind of roles can an outsourced executive fill?
The needs of the company should always determine the type of fractional talent to bring in. The trouble is, these needs are always changing over time. Executives can fill the role of :
- Fractional CEO
- Fractional CFO
- Fractional CTO
- Fractional COO
- Fractional CMO
- Fractional CxO
- Fractional CIO
This flexibility is ideal for startups. It is a common refrain that many startups struggle to make the right hires as their business expands. Hiring the right people, at the right time, really is one of the most crucial challenges facing startups looking to grow.
Founders might bring in too many positions too early on, hire young when they should be recruiting top talent, and/or struggle to establish a company culture because of uncertainty in who to hire. In this context of uncertainty, hiring established executives has become quite appealing for founders. Rather than risk losing resources on poorly-planned hires, bringing in a top-tier executive with ample skill and ambition is usually the right choice.
Rounding It Up
Traditional consulting is poorly suited to the needs of early stage companies because they do not offer operational assistance. Operational executives fill this gap by “getting their hands dirty” helping early stage and growth phase companies mature sustainably.
ABOUT THE AUTHOR
Stephen Giese is Head of Morgan Hill Partners’ Minneapolis / St. Paul advisory and consulting businesses, working with client technology and tech-enabled companies and investors to help maximize value. Stephen has 20 + years experience working in senior management positions at technology-enabled companies, including Account Management, Global Sales Management, Sales and Marketing Strategy, as well as CEO and COO positions. With a particularly keen eye for sales strategy and operational management best practices, Stephen has a proven track record of unlocking value and propelling growth within a company.
