How Can Fractional Executives Help Early-Stage Companies?

In the book  ‘The E Myth Revisited’, by Michael Gerber,  there’s a story of a woman who made amazing pies.  Everyone told her she should sell them.  She started a company and was quickly overwhelmed with the ‘business’ side of things and lost the passion for her culinary art.  Many companies are Founder-led, but passion can only take a company so far.  Often, these smaller businesses don’t have the capital for or need for a full-time executive team but still require that type of expertise to take things to the next level.  

What is a Fractional Executive?

I was recently featured as an industry expert by BevNET and Nosh to discuss fractional employment (side note - if you’d like access to the BevNET panel discussion on Fractional Executives, let me know). The dialogue was rich with insights and strategies about an emerging class of employment with early-stage companies: Fractional CXOs.

Fractional executives offer their services independently or as part of an organization that specializes in fractional CXO services. Early in a company’s growth cycle, the business may not have the capacity, resources, or ability to justify hiring a full-time Executive.   

The Fractional CXO role differs from full-time employment.  Fractionals often work with 2-3 companies simultaneously, on a part-time basis, as CEOs, COOs, CFOs, CIOs, CMOs, etc., providing companies with serious firepower for a fraction of the time and cost. The popularity of fractional executives is increasing as early-stage companies realize they can now afford an outstanding, experienced executive without having to pay the big bucks, benefits, and other costs associated with hiring a full-time executive.

How Does a Fractional CXO Help Early-Stage Companies?

Fractional Executives are highly skilled individuals who have been there, done that.  They’re dedicated to helping early growth start-ups flourish.  Their role is to align their areas of expertise with the needs of the organization.  They become part of the leadership team, providing strategic guidance and rolling up their sleeves to implement and initiate fast growth over time.  They operate inside the business, possessing the same passion and commitment as the founding team.

“Jamie is that fractional executive or business leader many businesses need yet is so hard to find”.

- Tuni Schartner, Executive Director, Venture Café and District Hall Providence

Dating Before Marriage

Fulfilling a fractional CXO role allows the company and Fractional Executive to “date before marriage.”  Both parties test out the arrangement with a short-term commitment. Good fits between the company and the Fractional CXO may lead to a transition into a longer-term fractional engagement, may result in full-time employment with the organization, or may prepare the company to hire a full-time Fractional CXO.

What’s It Like to Be a Fractional CXO?

In a word:  Rewarding!  My first Fractional CEO opportunity was with a local New England brand called Granny Squibb’s Iced Tea.  The company received funding from new owners who needed to figure out how to take the business to the next level. I was hired to develop a strategic roadmap, a plan to drive scale and growth for the 10-year old business. 

After reviewing the plan with the Granny Squibb’s team, Aperture CPG was asked to lead the team and execute the plan.  We ‘dated’ for 5 months as I provided management consulting services, which allowed both sides to get to know each other.  It was a good fit bor both, and Granny Squibb’s hired me as their Fractional CEO. We worked out a special arrangement and a budget for 6 months.  In addition to leading the team and company, the new owners engaged me to mentor them and teach them as much as possible about running a successful business.

“Working with Aperture CPG was instrumental in effectively articulating our growth goals as a business, developing & implementing a plan to reach those goals, and equipping us to sustain that growth into the future.”

- Kelley McShane and Nick Carr, Managing Partners, Granny Squibb’s Iced Tea

“Dating” gave both of us the chance to ensure we’d work well together to accomplish objectives.  I’ve learned over time that it’s essential to find the right founders who are willing to bring in someone with expertise and work alongside them in a fractional capacity.  For me, I look to partner with companies that are open to mentorship, actively seek advice, and work collaboratively to lead and help run the business.  

Tips for Moving Into a Fractional CEO Role

It can be tough to transition from a full-time Executive to a fractional role.  You’re not a full-time employee.  Actually, you aren’t an employee at all - you’re a 3rd-party contractor.  But that doesn’t change how you operate.  Great Fractional CEOs embed themselves in the company’s day-to-day operations and immerse themselves in strategic planning and leadership.  They’re key leaders and often act as the face of the organization.  You are the CEO.  You represent the company just like you would as a full-time employee. This is a key differentiator to calling yourself a “consultant.”

Final Thoughts

The fulfillment I receive by being able to help and support growing companies is overwhelming.  As a Fractional Executive, I am able to impact a larger number of businesses than I would as an employee of just one company, and they, in turn, have the opportunity to touch thousands of lives.  I appreciate the variety of my day-to-day experiences, the innovation and enthusiasm of each founding team, and the complete satisfaction that comes from having a hand in their success.  If you have questions about Fractional CXOs, feel free to reach out.