The Fractional Executive
The fractional executive business model has rapidly developed over the years with the increasing popularity of firms offering fractional C-Suite Executives mostly focused on serving companies in the lower middle market segment (revenues of $5 – $75 million). The development of this business model demonstrates the unique needs companies in the lower middle market have and how the fractional executive model has been able to deliver considerable value to these companies.
The fractional executive brings leadership capacity and specific expertise to a company’s leadership team in a flexible and cost-effective manner. Many times, companies of this size 1) don’t have the need for a full time COO, CFO, CIO, CMO etc. and 2) don’t have the budget to hire someone with the level of expertise needed to bring the level of professionalism and effectiveness these companies need. Therefore, the fractional executive model delivers exceptional results for companies in the lower middle market.
In this article, we outline what key characteristics are important to a healthy and effective fractional executive relationship. Of course, each individual company and relationship is unique, but we believe that there are critical principles that create important relationship characteristics that enable a healthy relationship with your fractional executive. These are not in any particular order as they are all important.
The most important and consistent theme that runs through all of these principles is the importance of treating the fractional executive as part of your team and not as just another service provider. This important nuance can be the difference between a good and effective relationship and one that doesn’t produce the results either party is hoping for.
As you do with full-time hires, team members need to fit into your organization’s culture. The same goes for when you hire a fractional executive. Assuming you are following the core principle of treating them as part of your leadership team, then assessing for culture fit is equally important as if you were hiring a full-time leader in the same role. Effective leaders, whether fractional or full-time, need to demonstrate, and fit into, your company’s core values and culture since they will be working within your executive team and effective teamwork is necessary for success.
It is important to include fractional executives in all key leadership meetings and communication. This integration is imperative. If you don’t include your fractional executive in normal leadership meetings/communication, they miss important information, updates and trends that could be critical in them delivering results for your organization. Just because they are working on a fractional basis doesn’t mean that they shouldn’t be integrated into your team. Doing so enables everyone to be in the best position to achieve the desired goals.
How you communicate throughout your organization is a critical aspect in your ability to effectively inspire, lead and achieve objectives. Great organizations have thoughtful and regular communication that is appropriate and timely depending on the situation. When working with a fractional executive, including them in the same relevant and timely communication you provide to your other leaders is just as important. This is a natural byproduct of treating, and integrating, them as a member of your team.
An offshoot from the importance of communication, ensuring there is a regular meeting cadence with your fractional leaders is also important. This meeting cadence will vary from company to company but establishing a weekly or bi-weekly meeting cadence allows for quality one-on-one check-ins and progress updates. These regular meetings allow the fractional executive to also bring to light opportunities they are seeing or challenges they are experiencing so a plan can be put in place to address. Without these regular check-ins, it is much harder path to achieving the desired results.
Good relationships require trust, and it is no different when hiring a fractional executive and integrating them into your team. Trust is imperative for the relationship to produce results and it comes both ways – you need to trust him/her and the fractional executive needs to trust the company and its current ownership/leadership. Trust is earned and is a function of building a history of working together. This is true, but that doesn’t mean there won’t be mistakes (from either party). The key in reconciling how and when mistake occur, is making sure the communication and regular meeting cadence is occurring so they can be dealt with and worked through. Much of this comes down to culture fit, how communication is managed and being open and ready to deal with all of the challenges that an organization faces directly and as a team.
Hiring fractional leadership can be a great solution as you work to grow and scale your company. As with anything, there are key principles that are critical to maximize effectiveness. These are some of the big ones to keep in mind as you look to hire fractional leaders to ensure that everyone is in a position to succeed.