One trend that has gained traction since the pandemic is fractional C-suite leadership. Deciding whether to bring in a fractional leader at the C-level will differ for every organization. Suppose your company is considering this idea. In that case, fractional leaders can provide value through their fresh ideas, perspectives, and specialized skill sets while giving the company financial flexibility instead of committing to a full-time executive hire.
According to SHRM, the C-suite has grown 160% over the past few decades. However, this expansion has also come at a time when just 40% of leaders believe their company has high-quality leadership, a 17% drop from two years prior and the most significant decrease in a decade.
With workforce uncertainty, leadership shortages, and constantly evolving needs due to technology, human resources leaders are looking for different solutions to maintain a competitive advantage.
Fractional C-suite executives, sometimes called CxOs, have become a popular alternative. The number of fractional C-suite roles is up by 57% from 2020. Fractional executives have years of experience and highly developed skill sets to support companies’ needs flexibly and in a timely manner. They also provide outside perspectives and different ways of thinking about the business that can fuel innovative new ideas.
Many fractional leaders have decided to leave the full-time corporate world behind and embraced the flexibility and variety of working in a fractional capacity. They may focus on specific industries or types of businesses. For example, smaller growth companies don’t have the financial means to hire full-time C-suite executives.
According to SHRM, bringing in a fractional executive requires an investment on the company’s part if you want to see results: “To reap the maximum value, they should become part of your organization’s culture and be fully integrated into your team. That’s where something called psychological ownership comes in, which is crucial for building open and long-lasting relationships, particularly in the absence of traditional employment. Psychological ownership refers to the feeling or perception that something is “mine” or “ours,” even if the individual does not legally own it. It is a cognitive and emotional state in which a person feels a sense of possession over an object, idea, role, space, or even another person.”
Creating psychological ownership is rooted in three aspects: developing common goals between parties that deliver value, having shared identities, and fostering feelings of belonging.
Make sure both sides are accessible and approachable. Availability and responsiveness are essential for critical needs. While CxOs will have other clients, focusing on the work at hand is crucial to building trust, even though the work may be a few hours a week.
Don’t hesitate to get to know fractional leaders personally as well. To develop a solid relationship, get to know their motivations, expectations, hobbies, etc., just as you would with a full-time hire. Investing time outside typical work responsibilities can improve collaboration and bring out the best work.
Include fractional CxOs as much as possible and work together to co-create outputs. By including them in offsite meetings, decision-making, and strategic conversations, you will build a stronger ownership bond and commitment to the work.
If you’re considering fractional C-suite talent or need to hire a full-time executive, send us a note; one of our executive recruiters will help you find the best path forward.