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  • Marc S.

What is Fractional Leadership?

**Written Entirely By Human (WEBH)**


Approximate read: 5-6 minutes


Fractional Leader

INTRODUCTION


Most articles about Fractional Leadership focus on the client side of the equation.

This is understandable given that the concept is a paradigm shift from traditional recruitment. It can therefore take some getting used to. However, to best help explain this type of profession, we feel it is better to present it from both the perspective of the Fractional Leader and Client.


DEFINITION - FRACTIONAL LEADERSHIP


Before we get too far into the subject, let's start with some definitions:


"Fractional Leadership" is a type of professional service where a skilled resource is contracted by a client to be embedded within its organizational structure in lieu of hiring a full-time leader. Their mandate is usually to lead a specific vertical function (such as Finance, HR, IT, Sales, or marketing) or enterprise initiative (business excellence program or brand development).


Why not call them Fractional CXO or VP?


Fractional Leaders are often referred to as Fractional CXOs or VPs. However, given the lack of standardized definitions of "CXO" and "VP" titles, the potential legal implications of an organization providing anyone with that title, and the unfortunate watering down of such important titles, we have chosen to refer to the profession as "Fractional Leadership" throughout our website.


Other types of similar (but distinctly different) advisory professionals


Fractional Leadership is distinct from several other types of confusingly similar relationships including, but not limited to:

Engagement type

Description

Consultant

Typically have defined scopes of work related to a specific outcome.

Interim Executive

Typically replacing an outgoing executive until a permanent replacement can be found

Advisory board

Typically part of a group that provide guidance to the CEO and have little/no direct work responsibilities


Prevalence of Fractional Leaders


There are Fractional Leaders in almost every type of function including: HR, Finance, Sales, Marketing, IT, Strategic Planning, Program Management, and Project Management. It is less likely to find a Fractional Leader in Operations because of the requirement for continuity, but they definitely also exist!


Embedded nature of Fractional Leadership


To the extent that they may do so, Fractional Leaders may present themselves to the outside world as a full member of their client's organization. General acceptance of this approach is gathering pace.


The next sections discuss Fractional Leadership both as a profession and as a potential solution for SMBs (Small and Medium Businesses) who are yet to explore this avenue.


FRACTIONAL LEADERSHIP AS A PROFESSION


Many Fractional Leaders enter this profession as part of a recent career change. Perhaps they want to pause their full-time career and think of Fractional Leadership as "Rest stop on the way to somewhere else". Some have heard of it and consider it a means of providing them with the career fulfillment they seek, since it generally brings more flexibility than full-time alternatives. The flip-side is the potential instability, since the relationship is not one of employment. However, careful client selection can lead to very stable mandates.


Potential Advantages of a Fractional Leadership career

One of the least discussed advantages of Fractional Leadership is that is it is a career hedge. Imagine going through 6 months of career search to land a leadership role only to end up in an organization that is in terminal disarray. Fractional Leaders hedge themselves from this possibility by having a portfolio of clients. In other words, Fractional Leaders are not held hostage to a single strategy. They can have a mix of engagements exposing them to multiple businesses in varying conditions. A mix of clients that includes both thriving and distressed organizations can be extremely fulfilling.


Other advantages include flexible time planning, leaving time for other activities such as other client engagements, networking or personal.


One of the hidden advantages of Fractional Leadership is the portability of solutions from one client to another. Often, clients feel their business is so unique that external solutions won't work. However, as we will discuss in our next article (What is a Business Operating System)" article, many practices can be transported from one business to the next.


Potential Disadvantages of a Fractional Leadership career

There are very few downsides to this profession. One in particular is that the contractual relationship between a Fractional Leader and a client is not one of employment and is therefore generally not protected employment regulations. It is a commercial arrangement, subject strictly to negotiated terms and conditions.


At times, perfect storms can emerge where multiple clients require something or even presence simultaneously. In such cases, choices must be made. In general clients are flexible since they understand that such resources are, as the name suggests, "Fractional".


Moreover, most Fractional Leaders create entities to market their services, leading to administrative burden.


Improve chances of success as a Fractional Leader


To put all the chances on your side, consider some of the following as part of your evaluation of Fractional Leadership as a career stream:


  1. Client profile

  2. Client's financial situation

  3. Client's expectations in terms of results

  4. Client's prior or current experience working with fractional leaders

  5. Personal requirement for steady income

  6. Possibility of having to rely on resources that you did not select

  7. Political climate within the client's organization

  8. The clarity of the mandate, as described by the client

  9. Access to supplemental partnerships that can improve chances of success


FRACTIONAL LEADERSHIP FROM CLIENTS PERSPECTIVE


A client's decision to engage with a Fractional Leader often comes as a result of a compelling event, including:

  1. Loss of a previous leader

  2. Organizational restructuring

  3. Rapid growth where the business leader can no longer handle a specific function

  4. Decline in business performance

  5. M&A activity


Regardless of the reason, clients have a few options. Among others, they can hire a full-time leader, hire a consultant for a defined period of time, or hire a Fractional Leader.


There are several considerations to make as part of the decision to hire a Fractional Leader, including:

  1. The ideal resource may only be available on a Fractional basis.

  2. The goal and duration of the role

  3. The expectations in terms of measurable impact and time required (some mandates require a longer runway than others)

  4. The alignment of goals between the Fractional Leader and client

  5. The budget


Potential Advantages of a Fractional Leader


  1. Generally less costly than full time executives, but can vary widely from one firm to the other

  2. In some cases are willing to have flexible compensation, hybrid fee arrangements


Potential Disadvantages of a Fractional Leader

  1. Not always available

  2. Split loyalty


Improve chances of success hiring a Fractional Leader


To put all the chances on your side, consider some of the following as part of your selection criteria:


  1. Have a well written agreement with a clear scope of work and deliverables

  2. Ask for references and the Fractional Leader's motive for choosing this career path (you may be amazed at the responses)

  3. Ask for evidence of the processes used and some of the "work products" that the Fractional Leader has been instrumental in delivering in the past

  4. Discuss upfront ability to travel (if the mandate requires it)

  5. Ask the Fractional Leader for their "definition of success" within a typical engagement

  6. Establish fair termination clauses that allow you to pivot to a new solution at a reasonably high speed.



Conclusion


For professionals seeking a career where they can make a positive impact to several organizations, in parallel, there are few better options than Fractional Leadership. The key is to identify the ideal clients and leverage proven tools.


For many clients, the decision to hire a Fractional Leader is not an easy one. To add to the complexity, there is an explosion of options. A clear expression of your vision and goals, as well as a thorough selection process is a vital step to ensuring success.


We will expand on Fractional Leadership, focusing on more specific aspects in future articles.

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