How a Fractional Executive Can Add Fuel to the Fire and Spark Growth
There is a lot of buzz out there about “Fractional Leadership” and/or “Fractional Integrators.” The idea isn’t that new, however, it has evolved a great deal in recent years. It began primarily with the CFO and then migrated to the CMO and now there are many high-level leadership positions that people think of as “Fractional” and, in some cases, that’s appropriate.If you look at the small business profile in 2014, according to U.S. Census Bureau data, there were 5.83 million employer firms in the United States. Firms with fewer than 500 workers accounted for 99.7 percent of those businesses. Firms with less than 20 workers made up 89.4 percent of businesses.Lets breakdown average incomes for these roles. These will be very low in some industries and remarkably high in others, so it’s important to keep in mind the average income. For this exercise I am going to use PayScale.com, however, there are many reliable resources you can use. Be sure to plug in applicable experience, marketing information, and experience to make your data relevant to your business. CMO - Median $168,494 total $313,236CRO - Median $167,909 total $315,022CFO - Median $131,644 total $260,267COO - Median $137,305 total $285,623 So you have now started your own business around a great idea. Most people have the tendency to think they need to staff every role with full time employees. However, how many startups or small businesses can afford one or even two of these senior-level staff? Simply put: they cannot. So instead, they get by with a bookkeeper serving as CFO, a sales person as CRO, and an intern for marketing and then expect a hard charging team that can plan and flawlessly execute a vision. It just doesn’t work that way. This afternoon, I was on the phone with a small business owner who was self-implementing EOS®. Here are some high level statistics on his business:
- The company has been in business for over ten years.
- There are fewer than 20 employees.
- The leadership team has been with the company for ten years.
- According to the owner, the leadership team is both young in age and in experience.
- They stated plainly that they don’t know how to manage or grow the team.
- They are experiencing significant challenges with driving accountability and results.
- They are considering expansion through new channels and ways to go to market.
If you look at just these points you can begin to see the gaps and challenges the business is facing. Like most small companies they can’t afford to hire someone like myself or others and pay them $250k+ per year, so what do they do instead? In the conversation he began to realize that any COO that would step in would have to wear multiple hats; one day they are the COO and the next day they might be on the ground floor painting walls. He believed he needed to get someone who had a dual purpose. I asked how likely he thought it would be that he’d find a solid executive to fill all the gaps, including painting walls? I said to him, “I don’t, won’t and cannot.” His response was, “Great point, so how do I grow?”I told him to put together a gap analysis of where his team is, what it’s missing, and what it needs going forward. I said, “I have the feeling that once you paint that picture you will find you are lacking leadership, understanding of operations, track record for growth, and that you are not lacking painters. Once that is complete, let’s talk again and map out a solution. In the end, I believe you can go hire a painter (if you still think you need one) while I cover your true business needs. You’ll get the growth you deserve and, ultimately, have your cake and eat it too!” He loved the idea and we are mapping out a plan.If you are a company of $20M or below, and unless you have plenty of cash and/or have gotten very good talent in exchange for an equity position, you have just a handful of choices:
- Hire full time employees and take on the costs and risks;
- Settle like most do as with the painter / COO type of staffing;
- Hire fractional staff and get full-time results, way below market price.
Here Are Some Reasons To Hire A Proven, Been-there, Done-that Fractional Executive:
- You need scalability and growth
- You need to drive results through your profit and loss statements
- You need help focusing and being accountable for results
- You have special projects that need attention such as a merger and/or acquisition.
If these sound like you, let’s talk! Send us an email and let's talk about how we can help you achieve the success you deserve. We can help you run the math and quantify the dollars we could impact, not just from a cost perspective but profit and results as well.