Endless joys come with being a small business owner or CEO: independence, control, creating employment opportunities for others, and seeing your passion come to life. However, leading a company solo, without another executive partner, can be lonely, not to mention the stress associated with being the main decision-maker for everything from finance to marketing to HR. You may have considered bringing another executive on to help you lead because of those reasons. Unfortunately, the average executive salary for 2021 is $204,000, with some roles requiring around a $300,000 price tag. That doesn’t even include the executive benefits package or expected bonuses!
That level of talent is out of reach for most small businesses or start-ups, where resources can be tight. But what if you could get that same expertise for a fraction of that cost? Well, now you can because the future is fractional. Fractional executive, that is. There is now a way to get decades of executive-level experience for less commitment and money. As a small business owner, the fractional executive trend is fantastic news for you and your payroll. If you haven’t heard of the fractional executive trend, think of it as the gig economy for the C-suite.
What is a Fractional Executive?
Fractional executives are perfect for small businesses and startups or companies that are trying to scale. They help bridge the gap between your need for executive brainpower and your limited resources. They can provide a time commitment equivalent to 20% to 50% of a full-time executive at a third of the price. Imagine getting the expertise of a 30+ year industry veteran for a discount.
They exist for every position of the C-suite: CFO, CMO, CIO, CHRO, CTO, COO, CRO, VP Sales, and even Chief of Staff. Because there are so many variations of C-level executions, they are often known as “CxOs.” If you’re a small business owner, you’re probably already fulfilling all of these roles on your own.
Fractional, of course, means they aren’t a full-time employee. And, instead, are working limited hours each day or week. Or serving full-time for a shorter period of time. Therefore they don’t require the retirement benefits or bonuses that a typical executive would. It’s a “pay for what you need” model that is a win-win for everyone.
Another benefit to using a fractional exec is the fresh, outside experience. Most of them are 20- or 30-year subject matter experts and have prior experience as full-time executives. They have worked – and are working – in that type of role in other companies and industries and can apply their learnings to your business. This experience means they can also challenge you to do things differently. And can see new opportunities for growth you may have overlooked, along with other blind spots.
How Fractional Leadership Can Transform A Startup
Integrating fractional leadership into your startup can be a game-changer, ensuring agility and strategic prowess. These seasoned professionals enhance decision-making speed, optimize resource use, and provide vital expertise without the overhead of full-time executives. They focus on specific, short-term goals, aligning teams with the startup’s strategic objectives. By bolstering leadership, fractional executives not only drive efficiency but also support sustainable growth, making them invaluable for startups navigating the complexities of scaling up.
So that’s an overview of how a fractional executive (CxO) may help your organization. Let’s take a look at what this role means for operations, in particular.
What is a Chief Operating Officer?
The Chief Operation Officer (COO) is often known as the “second-in-command.” Apple’s Tim Cook and Facebook’s Sheryl Sandberg are some of the most well-known people who have held this position. They are responsible for the daily operations of their companies. COOs usually oversee internal functions so that the owner or president can be free to deal with external matters, like business development.
Some of the teams or efforts that a COO oversees include:
- Corporate strategy
- Sales operations
- Marketing
- HR
- Project management
- All administrative functions
What Does a Fractional COO Do?
This role does most of what a full-time COO would do but on a fractional basis. Think operations expert who can be brought in on a part-time or project basis to organize, set up, and manage your company’s operations.
A fractional COO can:
- Review your operations and make recommendations for efficiencies
- Implement new processes and technology, including software and other SaaS tools
- Maximize your resources
- Define employee responsibilities
- Lead strategic planning
- Optimize your sales funnel
- Get your bookkeeping/accounting/payroll processes in order
- Establish project management practices
- Coach your employees and identify top talent/resources
- Be your confidant, but also challenge your thinking
When Should You Use a Fractional COO?
If you’re a small business owner who’s working in your business but not on your business, it may be time to consider a fractional COO. Cash flow doesn’t support a $200,000+ executive position, so having someone come in at a fraction of the price for a short period of time is advantageous.
Here’s when it makes sense to bring in the role:
- You are in growth mode (or need to be in growth mode)
- Business development has become stagnant or declined
- You need to scale operations
- When you need the partnership of another leader but can’t afford an executive salary
After a Fractional COO comes in and creates a plan to get things running for you, you might get to a place where you can afford a full-time COO in the future. Or, you might be able to maintain the systems set up yourself. You also might want to keep the person in the fractional role long-term.
Beyond the Chaos is a Fractional COO
Susan Fennema is the founder and Fractional COO of Beyond the Chaos and helps overwhelmed small business owners figure out how to systemize their world. She has 30+ years of experience in operations and project management and serves as a Fractional COO for her clients. Not only does she offer decades of operations experience, but being a small business owner herself means she knows what’s required to support you, the small business owner.
Beyond the Chaos also has a team of other fractional COOs, operations directors/manages, project managers/coordinators, and Executive/Virtual Assistants – the Chaos Killers – who can continue the work so businesses get end-to-end operational support.
Some of the benefits of working with Beyond the Chaos as your Fractional COO include:
- Your location doesn’t matter; we operate virtually.
- You pay a fraction of the cost of a full-time executive.
- We scale with you – you only pay for what you need, with no long-term commitment.
Find out which fractional is right for you with a consultation.
Frequently Asked Questions:
What are the signs that indicate a company needs to hire a fractional CxO?
When a company experiences rapid growth or faces strategic challenges beyond its current leadership’s capacity, it may be time to consider hiring a fractional CxO. This option provides expertise and guidance without the long-term commitment of a full-time executive, ideal for navigating transitional periods or specialized projects.
Signs a Company Needs a Fractional CxO:
- Rapid Growth: Scaling faster than current management can handle.
- Strategic Gaps: Lack of expertise in critical business areas.
- Financial Constraints: Need for senior leadership without the full-time cost.
- Project-Specific Needs: Major projects require specialized leadership.
- Innovation Stagnation: Need for fresh insights to drive innovation.
How Do Fractional CxOs Differ from Other Contingent Workers?
Fractional CxOs are seasoned executives hired on a part-time basis to fill strategic leadership gaps without the long-term commitments associated with full-time positions. These leadership roles differentiate them from other contingent workers who typically focus on specific, operational tasks rather than strategic, executive-level positions. Fractional CxOs bring a blend of high-level oversight and practical execution to drive key initiatives and strategic change within a company. Here are the key differences:
- Strategic Focus: Directly influence company strategy and decision-making.
- Executive Experience: Bring years of high-level leadership experience.
- Part-Time Engagement: Serve in an executive capacity without full-time obligations.
- Impact on Direction: Shape the company’s future, unlike operational contingent workers.
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