Before diving into some of our key takeaways, here is a refresher of what exactly fractional leadership is and how it differs from other executive positions:
Fractional leadership → A business model that involves hiring part-time executives or managers who can fill leadership gaps and offer strategic direction to an organization based on previous experience. Fractional positions exist across all functional areas of business (CMO, COO, CFO, CIO etc.) as well as within sectors that require more specific expertise. While there is more direct interaction and time commitment to the company, some benefits of holding an interim role include flexible hours, autonomy, and high income potential.
Advisor → A leader that provides guidance, time, and knowledge to companies. The specific duties of an advisor will vary depending on their area of expertise, but generally, they will offer a company advice regarding strategic planning, operations, marketing, and financial decisions.
Board Director → A member of the governing body of a company that provides management oversight, establishes strategic direction, and evaluates major decisions affecting stakeholders. This role usually lasts for at least a few years, with time commitment depending on needs of the organization.
Now onto some of the insight highlights from this conversation…
Fractional value does NOT mean limited value. Rather, it represents an important piece of the organizational puzzle, designed to be effective for as long as the company requires additional expertise. While not full-time positions, fractional roles hold equal value, as they allow the company to tap into external knowledge and experiences from executives chosen for their unique abilities. Simply put, a fractional position is not a temporary “bandaid” or “patch” to heal a part of a company; it should be as continuous and integrated as other roles.
Important considerations for founders looking to fill a fractional role:
Before seeking candidates for fractional roles, it’s imperative to evaluate your own strengths and weaknesses as a founder. Understanding where you excel and where you might need support will help you identify the areas where a fractional role can make the most significant impact. By hiring individuals who can balance your skills, you can create a well-rounded team that enhances the overall capabilities of the company.
While fractional roles can be highly valuable, some positions may be integral to your company’s core functions and require full-time attention. For instance, roles in sales might prove challenging as a fractional component unless your sales structure includes different arms like B2B, DTC, or enterprise sales. Identifying the suitable positions for fractional roles ensures that critical aspects of your business receive the necessary dedication and attention.
As a founder, networking is a powerful tool that can lead you to potential fractional role candidates. Every interaction presents an opportunity, and you never know who might offer valuable insights or contribute to your company’s success. Always be your best self, portraying authenticity and passion for your venture, as this can attract like-minded individuals who may be interested in filling fractional roles.
When considering hiring someone for a fractional role, maintain transparency throughout the hiring process. Clearly outline the expectations, scope of work, and terms of engagement to avoid any misunderstandings down the line. Honest and open conversations foster trust and set the foundation for seamless collaboration.
More often than not, leveraging the skills and knowledge of fractional leadership is better than passing on extra work to the “youngsters.” Even if it is more expensive up front, paying more for a fractional executive who has seasoned expertise in your industry, specialized knowledge, and a vast network of connections will be a far superior alternative in the long run compared to paying an inexperienced employee less for completing the base level of work. It is a strategic choice that your company must make based on the industry and stage you are in, as well as the breadth and depth of knowledge required. At the end of the day, your decision should reflect the priority to foster growth and development within your core team and to create a sustainable work environment for the future of your organization.
When deciding compensation for fractional team members, it is important to explore the various options that align with the unique nature of their roles. Traditional packages with fixed hours and limited meeting schedules might work for some situations, but having the flexibility to call on fractional members’ expertise ad hoc can be invaluable, especially for early-stage startups. In this case, having flexible hours in the fractional executive’s arrangement will allow for more fluidity and consistent access. Another compensation option is company equity. For founders interested in this option, be wary of just “giving away” ownership of your business to individuals that might not necessarily be aligned or share best interest in the future. For fractional executives considering equity arrangements, be sure to wear the due diligence hat of an investor to understand the risks and potential rewards associated with accepting ownership in the company. One final viable compensation model is project fees tied to specific success measures. This method can help to incentivize fractional team members to deliver tangible results that contribute directly to the company’s objectives.
Thank you for taking the time to read our takeaways! At She’s Independent, we value your commitment to seeking knowledge and growth, and we hope that you have found valuable insight from this conversation that will benefit you on your journey as a founder or a fractional executive. We hope to see you live for our Conversation Series next month!
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