Four Ways Fractional Leadership Can Help Your Business

The ever-changing world of business, built on flexibility, innovation and the ability to pivot as needed, requires a new form of leadership. With 90 percent of the global business population made up of small and medium enterprises (SMEs), the majority of businesses around the world may not need or have the budget for C-suite executives. However, it is also clear that access to the unparalleled expertise and experience of the C-suite is invaluable to businesses looking to scale.  

This global need has given rise to fractional leadership—also known as strategy and leadership as service—referring to where an organization engages with a C-suite leader on a flexible basis. While it is primarily owner-managed, fast-growing businesses that can perhaps see the most noticeable advantages from tapping into the fractional leadership revolution, fractional leaders offer businesses of all sizes—from startups to organizations on the Financial Times Stock Exchange 100 Index (FTSE 100)—many powerful benefits. 

Let’s take a closer look at four of the most prominent benefits fractional leaders offer businesses, and how fractional leadership can usher organizations of all sizes into an exciting new era of growth and profitability.  

Fractional Leadership Vs. Consulting: What’s The Difference?  

Before we move into the myriad benefits offered by fractional leadership talent, it’s important to outline how fractional leadership differs from the established consultancy model.  

While consulting has clear business value, consultants also represent an “outside in” approach—entering a business, diagnosing roadblocks to growth, presenting a solution, and then making their exit. While some consultants may then be on hand to offer future advice, they are not part of the business, uninvolved in implementation, and feel little to no psychological ownership of the businesses they work with.  

Fractional leaders, on the other hand, are insiders and form a true part of the leadership team—whether they be chief financial officers (CFOs), chief marketing officers (CMOs), chief human resources officers (CHROs), or another function of the C-suite. This means that not only will fractional leaders work in step with in-house teams to develop long-term strategies, but they also execute and take responsibility, just as a full-time employed executive would.  

Four Key Benefits Of Fractional Leadership 

1. Flexibility And Affordability Due to the part-time nature of the work, fractional leadership is a flexible and affordable model available to SMEs that may not need, or have the capacity to accommodate, full-time C-suite executives. Using this agile talent strategy, businesses of all sizes can tap into powerful leadership talent, and dial this resource up and down, at a fraction of the usual cost, according to business needs.  

Importantly, leaders at larger corporates can also utilize fractional leadership to leverage world-class C-suite talent on a flexible basis, providing invaluable internal resources to support overstretched internal executives. For example, a business engaging in mergers and acquisition (M&A) activity may need the expert business acumen of an experienced CFO, who can either spearhead this activity or act as a “fractional twin” supporting the internal, full-time CFO during this intensive period.  

2. Building For The Future In an increasingly saturated marketplace, businesses must always consider how best to scale and stand out from the chasing pack. This is another area in which fractional leaders offer a powerful advantage, mentoring internal talent in their field to support their professional growth.  

Looking to the long term, companies can even bring a part-time fractional leader on board to design and build out entire in-house teams and divisions—such as finance, marketing, or HR—attracting, hiring and mentoring the right team members for future leadership and succession. 

3. C-Suite Capabilities, Without The Competition Particularly in larger corporates, while overtaxed executives would, without doubt, benefit from the expertise of an experienced fractional leader, there may be internal concerns that new leaders being brought into the company could increase competition at the top level, harming advancement opportunities.  

On the contrary, however, incoming fractional leaders have no desire to climb the company ladder at the expense of existing in-house leadership talent. Fractional leaders have already “been there and done it” in the corporate world and, having done so, have instead left the traditional career ladder behind in favor of a more flexible portfolio career that better meets their needs.  

Additionally, when companies bring on board a fractional leader, they often gain access to the incredible bonus expertise of their network. When leaders join a corporation on a full-time basis, their knowledge and networks frequently narrow and become internally focused on their employer. By contrast, fractional leaders will naturally have a larger, more varied network of peers and clients that allows them to bring broader perspectives to their work, remain on top of the latest trends, and support ongoing professional development. 

Far from acting as a bottleneck to the advancement of existing leaders, fractional leaders therefore instead become an effective channel through which in-house company executives can access the most up-to-date thought leadership, upskill, and grow their professional network.  

4. Psychological Ownership When bringing on an interim team member, consultant, or fractional leader, there may be fears amongst internal leadership that a member of staff not bound by traditional employment will not be truly invested in their business—particularly at the executive level, given its strategic importance. 

However, opting to work with a fractional leader does not mean they would have less accountability or ownership than a full-time executive—quite the opposite. Fractional leadership is a lifestyle choice to which its members are fully committed, with portfolio careers often appealing to executives juggling other life commitments such as raising a family, those coming towards the end of their career who aren’t quite ready to retire, and those who simply prefer the variety of a diverse portfolio of clients to one steady role.  

Because fractional leaders have shaped a career that better fits into their wider life commitments, they are more likely to stay with a business longer-term. Through this, fractional leaders develop psychological ownership of the business’s long-term fortunes, better align with organizational vision and values, and, when utilized correctly, form an integral part of the senior management team.  

About The Author 

Sara Daw is the Group CEO of The CFO Centre and The Liberti Group, and the author of Strategy and Leadership as Service – How the Access Economy Meets the C-Suite, published by Routledge, out now.