Why Would a Small or Medium Business Hire a Fractional Executive
Being a business owner is challenging. Those who are not business owners often can not understand the struggles that entrepreneurs go through to ensure the success of their business and in turn their employees. There comes a time when a business owner needs help and expertise to support their objectives and meet their goals. Those that come to the realization that they have expended as much expertise as they possess into the business may look at a few different options when considering how to continue to develop their business with less struggle. When considering options on how to get the expertise and resources to grow their business, owners often consider three different options:
Grow the expertise with the current team through training
Hire a full time senior leader
Hire a fractional executive
A company should build capacity within their current team no matter the size. As the team’s skill set grows so will the company, by opening up new opportunities for both the company and the employees. However, building specific expertise in house can take a lot of time. This can prove costly in the short term as building capacity internally is a long game approach for business growth and development. There are also risks associated with employees leaving and taking with them their expertise. Additionally, the risk of having the wrong expertise for the challenges faced by the company also rise as talent is built within. In other words, it can be tough to get the training needed for the specific challenges faced by the company in a timely manner especially as the challenges change over time.
Hiring a full-time executive level employee with the right skills and expertise is an impactful way of adding value to a company. Someone that can step in and help the company face their challenges by bringing their specific skill set to that opportunities and challenge can be very efficient. However often in small to medium sized companies a full-time role does not exist for these positions. So the company is left with a few options: hire for the role and then utilize the person on other projects and tasks which do not match their skills or continue along without filling the role. Neither of these options are ideal for the company and both can prove costly in both direct costs of salary and potential missed opportunities.
A Fractional Executive is hired by a company to fill a role for a fraction of full-time work. This eliminates the cost of full-time salaries, employee benefits, and other commitments. A Fractional Executive can give a company access to expertise before they would hire for the position. When considering finding the right expertise for a challenge faced by a company, a Fractional Executive with a specific skill set can be brought on to help. Since they are experts in their chosen area, they are able to provide a low risk, faster to impact approach. The risk associated with hiring a part time executive who is only paid for the time needed by the company is greatly reduced as compared to hiring a full-time role or trying to build capacity internally. These executives understand that small companies have scare resources and therefore use their expertise to get results quicker than the company may otherwise be able to achieve them and drive value for the company and employees.
By working on the inside with the leadership team the Fractional Executive provides part time expertise with full time accountability. They are able to respond to situations and work with the team as if they were a full-time employee. They can take on projects and execute effectively ensuring the rest of the team are able to focus on their areas of expertise. With the whole team working in areas that match their competencies the team is able to drive value and opportunities for the company that may otherwise be missed. The in-house team also gets the benefit of working beside and learning from an executive that has “been there and done that” creating opportunities for development within the team which ultimately leads to less need for the fractional executive over time and can help with organic development of the team leading to promotion within the ranks.
Often a company has a great team who are able to execute on day-to-day operations. Fractional Executives are also able to bring an outside perspective. Usually, a team is highly knowledgeable in their specific market and industry. Bringing in someone with an outside perspective to ask the tough questions can force the team to look differently at their decisions and ultimately drive additional value for the company, shareholders, employees, and the communities where they operate. A Fractional Executive can also add a level of strategic leadership to make sure that someone is working on the company rather than in the company turning out product or services. Often in small and medium sized companies this level of expertise is missing within the business which can lead to inefficiencies, missed opportunities in long term planning, regular analysis of the operations or financials, etc.
By bringing on Fractional Executives, business owners are able to get the time they need to understand and work on their business in order to drive value and opportunities for the shareholders, employees, and the communities where the business operates.
