When Should Companies Bring On a Fractional Executive

Emerging growth companies sometimes look to bring in a fractional COO, CFO, CMO or other executive on a part-time basis. This is typically an experienced resource that the company couldn’t afford or couldn’t make use of as a full-time employee. The intent is that he or she will provide strategy and direction—and give way to a full-time person or step up to a full-time position after the company has grown. But—companies that do this have many other needs and priorities. In what kind of situation does it make sense for a growing company to use its scarce resources to bring in a fractional executive?

Kim Denney

Kim Denney is an experienced Houston area leader with a record of solving top-level problems as an executive with broad responsibilities in the Chemical, Petrochemical, Energy, and Manufacturing industries.

"Here are two situations that seem to cry out for a fractional C-Level executive. Both involve growth and transitions. If/as the company is embarking on a significant growth strategy, there may not be cash flow to hire all the required resources with the experience needed to assure success. A few fractional, experienced, and expensive resources in the C-suite can accelerate growth and help you avoid expensive and distracting potholes along the way. These resources can then give way to full-time resources as cash-flow allows and business demands require. Likewise during a transition, like a major integration or an expansion into another geography, there may be extra C-level work to be done at the strategic level in planning, communicating and staffing for success. Short-term projects like this may not call for a long-term resource. Fractional executives who are focused and experienced can work within the leadership team over a few quarters to assure success."

Tom Henricks

Tom Henricks began his four decades in aerospace as a fighter test pilot in the U.S. Air Force before being selected by NASA to become an astronaut.  He received worldwide recognition on four Space Shuttle missions and commanded two of those flights. 

"Fractional executives make the most sense during business transitions or a crisis."

Susan Kearney

Susan is a multidimensional senior operating executive who has generated impressive results across the technology, education, B2B, B2C and social sectors in organizations ranging from start-ups to well established entities. Her approach focuses on engaging stakeholders and building consensus to develop and deploy aggressive sales and marketing strategies, customer retention initiatives and digital solutions.

"Fractional C-level executives can build a company's strategy capacity and bring powerful experience and expertise for a fraction of the cost of a full-time employee, especially when you take cash and stock upside into account. This is a proven successful approach for businesses in startup and emerging phases."

David Roberts

David brings to Newport an extensive background as a business strategist, advisor, entrepreneur and CEO. He is a highly experienced management consultant who served with Bain and Company as a Vice President and Partner for 14 years.

"It makes sense to bring in a fractional executive when the fractional exec has background and experience in an area outside the traditional business activities of the company--for example an M&A deal and integration, a special project like an ERP implementation etc. A fractional exec also makes sense when there is not enough work to occupy an individual at their talent and comp level—and they can provide supervision and direction to junior staff that gets the work done and helps to develop their capabilities."

Mark Rosenman 

Mark is a co-founder of Newport Board Group and its Chief Knowledge Officer. He specializes in content management, inbound marketing and thought leadership authoring.

"A fractional C-level executive is a good fit when bringing one in can accomplish three things: keep the trains running; capture some low hanging opportunities; and clarify your long term needs for the position. Be sure that you have enough cash flow to afford not only their fee but also some new spending they will probably recommend."

Eran Tagor

Eran has diverse experience in executive management, venture capital, private equity and M&A, including turnaround, restructuring and special situation transactions.

"We are talking here about an executive who though part time would be formally presented as an employee on a par with others. This makes sense if he or she will bring value add that can’t be gotten from an outside adviser. A good example: a Newport partner joined a start-up software company as a chief strategy officer and promptly opened up his entire Rolodex to help drive the company’s market penetration. In a case like that, approaching the market as a member of the company has more impact than if you are just an adviser making introductions.

In cases where an executive has the right skill set but does not want to take a full-time job or the company can’t afford the executive full-time, a fractional role makes good sense.

On the other hand, I would prefer to have a full-time executive since someone who is part time is going to be less focused due to their other commitments. The key decision making factors are: is the person with the right qualifications affordable? Can a part time position deliver the desired results. Is it a customer facing position—for which an advisor wouldn’t be appropriate?"

Have you thought about bringing on a fractional executive? Share your thoughts with us below, and don't forget to download our free checklist "The Fractional CMO Readiness Checklist."