Meet fractional executives, the growing number of C-suite leaders combining the best of the gig economy with dynamic leadership.
Thanks in part to the proliferation of remote work and a growing desire for flexible schedules, more executives than before—from chief financial officers and chief marketing officers to chief executive officers—are being tapped for fractional executive services. In fact, as today’s workplace shake-up continues, demand for fractional executives is predicted to rise, the Wall Street Journal reports.
In this article, we’ll outline what fractional executive services are, why they’re important, and the role of fractional CFOs, fractional CMOs, and fractional CEOs.
What is a fractional executive?
Fractional executives are members of the C-suite who offer their expertise for a “fraction” of the time. Fractional executive services go far beyond the role or functions of part-time contractors or freelancers. Whereas contractors are typically project-based, fractional executives offer top-level insight, strategy, and management “on an ongoing basis to help the business achieve its goals,” per the U.S. Chamber of Commerce.
Sometimes known as part-time, gig, or on-demand executives, fractional executives often work with start-ups and early stage businesses. Fractional executive services span the gamut, though. In more established organizations, fractional executives may be invited to guide certain segments of business, such as marketing or finance.
Fractional executive roles “often attract executives who have reached a point in their careers at which they want to choose their own clients and design their own schedules,” according to the Journal. Plus, hiring a fractional executive is often financially advantageous for companies too, especially when hiring a full-time executive may not make sense at an early stage, for example.
Ahead, we’ll dive into the three most common fractional CEO services: fractional CFO, fractional CMO, and fractional CEO.
Fractional chief financial officers can play integral roles in the C-suite, taking “a 360-degree view of the organization—financially and operationally—and [using] the numbers to create meaningful projections to guide the business toward a sustainable future,” according to the NJCPA.
Fractional CFO services are invaluable for startups, offering them the capabilities of seasoned financial experts without the full-time salary and benefits. Fractional CFOs also work with mid-size businesses and established organizations to upgrade accounting systems, position the company for a merger or acquisition, and tackle complex financial issues.
Some fractional CFOs split their time between a handful of companies, working about one day a week for each or more, depending on any pressing needs or projects. The fractional executive set-up is attractive for its flexibility, variety, and even the option in some cases to take an equity stake. As it concerns fractional CFO services, fractional CFOs say “being an external contractor sometimes makes it easier to give the right recommendations, as one’s career isn’t tied to a particular startup.”
According to the U.S. Chamber of Commerce, “the CFO is one of the most common types of positions for which fractional hiring works well.”
Fractional CFOs were especially in demand last year, as venture-capital firms poured funds into start-ups, contributing to a “deal-making craze” that upped demand for fractional financial services, the Wall Street Journal reported.
Hiring a chief marketing officer is often the next step for growing companies, but not all marketing services are equal. For many companies today, a fractional chief marketing officer is the ideal arrangement for C-suite collaboration, digital marketing savvy, and high-level strategy and expertise. Plus, as in other fractional executive roles, fractional CMOs offer extensive expertise “at a fraction of the cost,” per the U.S. Chamber of Commerce.
“Digital marketing is more complicated every day, and it’s often difficult for an organization’s in-house marketers to be experts in all aspects of marketing. That’s where a Fractional CMO comes in to act as an extension of a company’s team, augmenting the skills and expertise of their in-house talent,” Sheila Kloefkorn, an expert on fractional CMOs, said in an interview for Forbes.
“A part-time CMO or Vice President of Marketing can give you the expertise and strategy of a full-time Chief Marketing Officer without the full-time cost,” Kloefkorn said. “So if companies do not have the resources they need to staff a full in-house marketing department or move fast enough to support their growth, a Fractional CMO plus marketing team can step in and bridge the gap.”
Fractional CMOs aren't new to the marketing landscape, but they are growing in demand, according to the Wall Street Journal, thanks to advances within the industry, the flexibility that comes with working "fractionally," and competitive pay.
Fractional leadership isn’t just for finance or marketing; fractional chief executive officers are also taking ground amidst today’s workplace reconfiguration. Most often, fractional CEOs take the helm on a part-time or short-term basis, offering fractional executive services and operational support until an initiative is met.
Often, that means working themselves out of a job, according to one fractional executive’s story from Entrepreneur.com. But the beauty of working as a fractional CEO is getting to dive deep into an organization or business’ strategy to make an impact on your own terms.
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