🙃 Part time CEO???

This is The Level Ups - modern business content for the future business leader (in plain-jane English).

Having a part-time CEO, CMO, or COO would've been strange twenty years ago. Today, it's "newish." Tomorrow, fractional executives will be "normal."

If your company is hiring a CEO (or any executive) part-time, it's a big deal.

• What is a "fractional" executive

• Is hiring one a good idea or not? We've listed the pros and cons.

• Who should hire a fractional executive?

• Are employees under them screwed? (It can get ugly be careful).

Estimated reading time: 3 minutes & 40 seconds

Let's get into it. 

What is a "fractional" executive? 

A senior business person who uses a fraction of their time to do an executive job is a fractional executive (pretty obvious so far).

They operate as their own "company of one" and are hired like any other company whether a freelancer or a cleaning company (so they're not on payroll). 

Instead of being a full-time CMO at one company, they often work with multiple companies on it can be a contract with a set period (anywhere from 6 - 18 months).   

Fractional executives sit in between a freelancer and a big consulting company but closer to a freelancer. The differences are very technical. Freelancers usually don't think/work at an executive level. Big consultancies can, but for huge fees. 

They're great in some cases because you get a fully qualified executive for a fraction of the cost actually working in your company. That's the ideal. Sometimes it's not so simple, and we'll cover both the pros and cons below. 

Here are some examples: 

• Future State COO - fractional COO services.

• Stella Pop - fractional COO, CMO, and more.

• Crisp Media - fractional CMO services.

Is hiring a fractional executive a good idea? 

This is controversial, but the answer is often yes.

Especially for companies under 100 employees. It seems weird because we often think of executives working 80-hour weeks, so how could someone do it part-time?

It's absolutely possible, and people are doing it. But is it optimal? 

Let's walk through the pros and cons before breaking down the details. 

Pros of hiring a fractional executive: 

• Save money - "fractional" refers to time AND PAY (funny how nobody talks about this).

• Save time - they'll dump years of insight all over you in a couple months.

• Flexible contract - hire them for 6 months and extend later (keeps options open).

• Experienced coach for you and your team - and executive help with HR in general.

• Pay them based on results - always an option and puts their skin in the game.

Cons of hiring a fractional executive: 

• Would you want execs who will leave "soon" firing/hiring people? Big risk.

• May never understand company culture (normally takes a year or more).

• If they're bad, it's 10 steps backwards - small companies may never recover.

• Saving money doesn't mean it's "cheap" - CMOs making $30k/month full-time may charge "less," but you can't expect this to be a $2k/month agreement.

• Less committed than a full-time executive (this is important with technology startups where execs often work for a future payoff when the company exits).

Who should hire a fractional executive? 

Growing companies who need help with "growing pains"

Fractional executives can help because they bring proven systems and best practices to the company for sustainable growth. Unlike a consultant, a fractional executive will also implement these systems for you. 

Things like:

• Hiring teams of people - A fractional COO builds and implements the hiring pipeline, candidate scoring system, interview process, etc (and teaches everything to the team).

• Scaling marketing/sales - A fractional CMO builds and implements dashboards, content strategy, and brand and hires the 3rd party freelancers/agencies.

• Keeping finances in order - A fractional CFO can set companies up for major long-term success here, and it's (usually) worth it.

Struggling companies that can't figure out the problem(s)

Most fractional executives are fantastic at identifying and solving problems. It's the key skill to look for in senior people. The bonus: companies are hiring people who have already found and solved the same problems. 

Companies with young leaders

Fractional executives support young, perhaps inexperienced leaders who need more than just a mentor. Someone who will teach while also leading by example and hands-on implementation. Better than paying just for advice. That's a fractional executive. 

What do fractional executives mean for employees? 

This is for you if you're an employee with little to no say in who gets hired. 

There are some risks, especially if your company is already in a downward spiral. Ask, has your company? 

• Been making less money?

• Announced a hiring freeze?

• Fired senior leaders? (or have they quit?)

These are signs that it will get worse before it gets better. A fractional executive (in this case) would lead the company through the worst of it. That's why they would be hired, which may involve letting people go.

But, if the company is doing okay, fractional executives won't look to fire people. 

Keep this in mind: 

• Be positive. There's no benefit to hating on a hire like this (especially) in public. 

• Focus on how to help the company during the conversation, not yourself. Ask about their mandate and responsibilities.

• Remember, fractional executives are short-term hires. Permanent employees are (usually) seen as long-term assets.

This next part is important.

Deep down, you know if you're a problem at your company. There may be valid reasons, but you already know if you're a problem or seen as a problem. In this case, fractional executives will likely notice the same and do something about it.

Since you're subscribed to this newsletter, you're probably not one of those people. We still have to say it though. 

All of this is subject to context. Without all the facts, we can only offer so much advice. 

If you have any questions, reply to this email, and we'll respond. Everything stays confidential. 

Fractional executives are new but here to stay, and you'll continue hearing more about them.

We hope this helps you get ahead of what's to come in the market. Trust, you'll hear more about this in 3-6 months. 

Thanks again for reading,