The business landscape is always changing. It provides great challenges and also great opportunities within those challenges.
The phrase, Less is More, traditionally means that a focused approach can bring more results.
So, it is worthy of consideration in the context of business leadership due to inflation and of the charts competition.
I believe the role of fractional executives is a valid growth strategy for SMB’s and even larger companies, in some instances, to get a big impact out of a lean and strategic leadership model.
So, in this blog, Less is More, I’ll cover the differences in fractional executives and full-time executives.
In addition, I'll also give you a personal client example to show what can be accomplished.
My hope is that this blog will continue to give you the information you need to make the best decision possible on whether to scale your business through fractional leadership or not.
There are 7 main areas that show the difference between these two leadership options.
Please understand that this list is not meant to demean one option over the other. It is simply meant to show the differences for decision-making purposes.
So, let’s get into what the 7 main differences are.
Fractional executives are not merely temporary placeholders.
They bring a wealth of experience and strategic insight to the table, actively participating in key decision-making processes. They can actually become a part of your executive leadership team.
Their role is to bring informed perspectives that contribute to the overall success of the organization and actually roll their sleeves up and help get it done.
Unlike full-time executives who may oversee a broad spectrum of responsibilities and teams, fractional executives are often brought in for their specialized expertise.
They excel in targeted problem-solving, addressing specific challenges that the organization is facing, whether it be a financial restructuring, a technology upgrade, or a market expansion.
However, in some cases fractional executives can be an indefinite part of your leadership team.
Fractional executives typically have a minimum contract period of 90 days. This helps to get to know the people they are working with and do a full analysis of the current processes and procedures.
This short-term commitment provides organizations with greater flexibility than full-time executives. However, they can also become an indefinite member of your executive leadership team.
That’s the beauty of this model. You can scale up or down easily according to your needs.
Fractional executives must quickly and seamlessly integrate with the existing team and company culture.
Their role is temporary, but their impact can be long lasting if everyone accepts them as part of the team.
To make sure the integration works well, it involves instant access to the company's strategic plan, standard operating procedures and key leaders.
This will allow them to get up to speed quickly by learning and understanding the nuances of the organization, building rapport with team members, and aligning their efforts with the company's overall objectives.
Fractional executives thrive on adaptability.
They are used to entering new environments, quickly understanding organizational dynamics, and making a meaningful impact within a shorter time frame.
This agility sets them apart from full-time executives who may require a more extended onboarding period.
The success of a fractional executive is measured by tangible results.
They are on a mission to solve a problem or help solve a problem, lead a team, and/or grow your business.
In fact, if they are not good at what they do and deliver tangible and measurable outcomes then they will not have a successful fractional business.
The financial implications of fractional leadership differ significantly from the traditional full-time executive model and is one of the main selling points.
Organizations benefit from the expertise of fractional leaders without committing to a high, ongoing salary and benefits package, optimizing the business’ resources.
On average, fractional executives will cost 50-60% less than traditional full-time executives. This allows the majority of funds to go into suggested resources that will actually produce more recurring revenue.
Now let’s look at a practical example that a fractional executive leader can have on a business.
I had the opportunity to work with a company this year that was 6 years old, as their Fractional Chief Operations Officer (FCOO).
From the outside looking in, it was very successful. They were grossing almost $5M annually and they had several different entities that also had great potential.
However, once I started my discovery time with the owners we identified big issues that were holding them and their company back from true success and long-term sustainability.
First, we dove into the Mission & Vision of the company to diagnose the current state of the business.
Second, we determined the greatest opportunity to spend our time optimizing and developed a strategic growth plan for the company.
Third, we brought the team together to share our vision and get their input so that they would feel empowered and engaged in the process.
Lastly, we finalized the plan and started working together in weekly meetings that were clear, empowering and accountable, to execute the plan.
This process took about 30 days to develop and implement. After 90 days we had good data from the consistent action steps.
Through this process, it revealed underlying issues that took intentional conversations to uncover. Once we uncovered them then we were able to revise the goal and shift the planning process to achieve the goal.
The result was trimming all the entities that the owners didn’t have a strong desire to put in the work to create sustainability. This was certainly a difficult process but one that has now brought clarity for the owners and a very bright and sustainable future to their business.
Our engagement was for 9 months and was definitely a win-win business relationship.
One of the owners said this about what I helped them do.
“Ryan helped us establish a mission and vision statement for our business. Through this, we were able to see what elements of our business we needed to focus on and which we needed to let go.”
This is the type of result that fractional leaders can bring, and want to bring, to the table. In this case, a fractional leader was a great fit. It helped them completely turn around the financial situation of their business.
Now they can actually enjoy their business and reap the financial benefits for years to come.
I hope this blog has helped you understand how fractional executives differ from their full-time counterparts, so that you can continue to make the best leadership decisions that will help scale your business to sustainability.
In addition, I hope it showed you that the phrase, Less is More, can certainly apply in the business leadership category for a lot of SMB's, and possibly for larger companies that want to take a more laser focused approach to problem solving or scaling the company.
The upcoming blogs will continue to take you on this fractional leadership journey, so that you can make the best decision for your business.
However, if you have questions or you are ready to talk specifically about what a Fractional COO could do for your business,
Schedule a FREE Strategy Session to start the conversation.