Demonstrated
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"Thank you for leading our team over the last couple of years. Your leadership, guidance, and support have been invaluable and made a lasting impact on me. I appreciate all that you've done for us! It's been a privilege to work with and be coached by you."
Angie Teal
Customer Success Manager
LOFT (now Honestly)
What is a fractional Chief Executive Officer (CEO)?
A fractional Chief Executive Officer provides strategic planning, organizational alignment, and operational accountability within a growth or early scale stage company. The role is fractional because the company has strong leadership across the core functional areas but lacks an effective executive operator who can clarify the organization's strategic direction and bring those leaders into alignment. A fractional CEO's primary responsibility is to clarify the company's strategy and ensure the organization's culture, people, processes, and systems are operating consistently and effectively to deliver specific growth and health metrics on behalf of the board of directors, founder(s), or business owners.
How is a fractional Chief Executive Officer (CEO) different than a full-time CEO?
A fractional Chief Executive Officer is not a full-time role. A fractional CEO has all the experience of a full-time CEO but works on a part-time capacity because the organization is not large enough yet to require a full-time person in the role.
A contracted fractional CEO does not receive benefits from the company and is not a W2 employee under the United States Department of Labor classification criteria. In some cases, a fractional CEO may choose to join the organization as a part-time W2 employee which may grant them access to certain benefits. In either case, the size of the company or the makeup of the company's leadership team does not require the CEO to dedicate 32 or more hours per week to the role.
How is a fractional Chief Executive Officer (CEO) different than an interim CEO?
A fractional Chief Executive Officer is not full time and typically does not have a pre-determined end date for their engagement. An interim Chief Executive Officer is typically a full-time role with a defined end date by which the company intends to hire an internal, full-time replacement.
When a company's CEO resigns or the board of directors moves to terminate their CEO's employment, it is common for the organization to look for an interim CEO. If there is no internal candidate prepared to take over the role, the board may look externally for a contracted interim CEO. The interim CEO will provide leadership and stability both inside the company and with it's key stakeholders such as customers, partners, and suppliers through the transition to the hiring of a full-time CEO.
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If the company is small, it may not require a full-time interim CEO. In this case, the best choice is often an interim fractional CEO. In this role, the CEO has full authority but is only needed on a part-time basis and will step down once the company hires a permanent Chief Executive Officer on a part-time or full-time basis.
Three situations where a fractional Chief Executive Officer (CEO) services can help your company transition from growth to scale
The top three times when hiring fractional Chief Executive Officer makes sense for growth and scale stage companies are when:
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You are a founder who is much happier when you are leading a specific role.
For example, your best contribution is in building and leading technology focused teams as a CTO or leading the company's Go-To-Market [GTM] efforts as a Chief Revenue Officer.
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You no longer have the capacity to do everything yourself.
Sitting in more than one critical seat during periods of high growth can lead to burnout for founders and teams. Even though you have the skill to fill more than one role, you just don't have the time to do both (or all of them) well and if you try, the team culture will break down leading to internal issues as well as problems with customers, partners, and suppliers.
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You're responsible for more than one company (or a portfolio) and need to focus on one but don't have a leader for the other(s).
This situation happens often in patient capital and private equity funded businesses. It can also happen with founders who have started multiple businesses and find them all moving forward but none of them are really performing the way you hoped. When you need an executive operator but the business isn't big enough to justify a full-time CEO, a fractional Chief Executive Officer can often bring the right level of expertise to the growth and scale challenge so the business can grow to the point where a full-time CEO makes sense.
Still have questions about what a fractional CEO is or how hiring one can help your business scale?
Too often founders find themselves answering all the questions, making all the tradeoffs, and trying to keep the business from consuming their life.
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It almost always happens between $1MM and $10MM ARR and 12-20 people.
There's not enough work to justify bringing on a full time Chief Executive Officer but there's too much distraction. A fractional CEO might be just what you need.