As nonprofit organizations face rising demand and unpredictable funding, mergers are becoming more common, but they’re not the only path forward. The real differentiator is leadership. Bringing in experienced interim executives equips organizations to stabilize, evaluate options, and execute successfully, whether the nonprofits ultimately merge or remain independent.
Key Takeaways
Nonprofit mergers are accelerating, but success depends on strong, experienced leadership in the moment.
Interim executives bring critical financial and operational discipline, helping organizations stabilize, assess options, and execute effectively.
The right interim leader positions nonprofits to succeed as a stronger standalone organization or as a high-performing merger partner.
A Sector Under Pressure
Nonprofits today are navigating a perfect storm: escalating need for services alongside shrinking, less predictable funding streams. The result is a sector increasingly in flux, with boards and executive teams under pressure to make high-stakes decisions quickly.
When a CEO quits, companies must immediately stabilize leadership, appoint an experienced interim CEO, communicate with stakeholders, and begin the search for a permanent replacement.
Key Takeaways
Act immediately: When a CEO quits, the priority is stabilizing leadership; successful companies appoint an interim CEO within days to maintain continuity.
Control the narrative: Clear communication with employees, investors, and stakeholders is critical to preserving confidence and avoiding disruption.
Stability matters: An experienced interim CEO is the most effective way to bridge the gap while you conduct a thorough search for a permanent leader.
A fractional executive is a senior C-suite leader (such as a CEO, CFO, or COO) who works with a company on a part-time or ongoing basis, providing strategic leadership without the cost or commitment of a full-time hire.
Key Takeaways
A fractional executive is senior leadership without full-time commitment: Fractional executives provide C-suite-level strategy, decision-making, and accountability on a part-time basis aligned to actual business needs.
Offers a flexible, lower-risk, lower-cost alternative to full-time hiring: Boards gain experienced leadership while controlling costs, reducing long-term obligations, and maintaining the ability to scale involvement up or down.
Built for moments that matter most: Fractional executives are especially effective during growth, transformation, transitions, and periods where targeted expertise delivers outsized impact.
Fractional executives, including fractional CEOs, CFOs, COOs, and CIOs, are the hottest thing in the C-suite. What started as a niche workaround has gone mainstream, with companies from fast-scaling startups to Fortune 500s tapping part-time leaders for big-impact roles.
These aren’t consultants or advisors — they’re deeply embedded executives, delivering high-level strategy, leadership, and results without the cost or commitment of a full-time hire.
But what exactly is a fractional executive? How is this different from an interim or full-time hire? And when does it make sense to go fractional in the first place?
Not every company needs a full-time CFO—but choosing the wrong type of financial leadership can be costly. This guide compares fractional, interim, and full-time CFOs so you can understand the differences, when to use each, and how to choose the right fit for your company’s stage, budget, and goals.
Key Takeaways
Fractional CFOs are best for ongoing strategic support without full-time cost
Interim CFOs step in quickly for transitions, crises, or urgent needs
Full-time CFOs make sense for larger companies needing permanent leadership
Knowing when to hire a CFO can be the difference between scaling confidently and flying blind. As companies grow, financial decisions become more complex—from forecasting and fundraising to managing cash flow and expansion. This guide explains the key signals it’s time to bring in CFO-level leadership and which model fits your stage.
Key Takeaways:
Complexity is the trigger: When financial decisions, forecasting, or cash flow questions outgrow basic accounting, it’s time for CFO-level strategy.
Growth events often require a CFO: Fundraising, M&A, expansion, or operational inefficiencies are common points where companies, especially startups, bring in a CFO.
You don’t always need full-time: Interim or fractional CFOs provide senior financial leadership without the cost or commitment of a permanent hire.
Whether you’re running a startup, scaling fast, or facing financial complexity, the question eventually comes up: Is it time to hire a CFO? This guide breaks down when to bring in a full-time, fractional, or interim CFO — and how to know which one is right for your company’s stage.
When a CFO leaves a company — whether by resignation, retirement, or termination — the clock starts immediately. CFO turnover hit a seven-year high in 2025, making succession planning more critical than ever. As a consequence, demand for highly skilled interim CFOs remains high.
A whopping 262 CFOs left their jobs globally in 2025, continuing a multi-year trend of high turnover. In the S&P 500 alone, CFO turnover surged to a record 106 appointments in 2025, up sharply from 89 the year prior.
According to the management consulting firm Russel Reynolds Associates, which keeps track of CFO comings and goings, “Global CFO appointments reached a seven-year high in 2025, with 316 incoming CFOs (+10% YoY) and 12% above the seven-year average of 281 appointments. This continued upward trajectory is a clear signal that elevated CFO churn is now a persistent feature of today’s governance landscape.”
That means even big public companies are at risk of CFO turnover, whether by resignation, retirement, or termination, and every company needs a strong succession plan to ensure continuity in financial leadership.
Delayed exits have left private equity funds with a new challenge: Figuring out how to get their portfolio companies to execute for longer periods. So we found it enlightening to read the Reddit thread that asked how PE funds would know whether a portco would struggle with execution. The answers from operators, consultants, and embedded PE partners surfaced a brutally honest list of execution warning signs.
Here, we summarize the 10 warning signs a portco will fail at execution and offer the fix we know works.
If you’re seeing even 2–3 of these warning signs in a portfolio company, execution risk is already rising. If you’re seeing 5+, the clock is ticking.
The good news? These problems are highly fixable with the right leadership, at the right time.
In today’s crowded interim and fractional executive market, standing out is everything. According to RED Team interim CMO and brand expert Mary Maloney, “the one thing that executives need to know about building their own brand can be summed up in one word, and that is clarity.”
Clarity isn’t just a nice-to-have, it’s a strategic edge, she says.
“Clarity is a competitive advantage, especially in fractional and interim work. The competition is fierce. And those who can articulate the value they bring to the table with crystal clear clarity, they are the ones who are going to win.”
As artificial intelligence takes the business world by storm, leaders tend to assume that success will go to those who move fastest. But in practice, the companies that benefit most from AI in business operations are not the fastest adopters; they are the most deliberate.
Those are the leaders who take a critical look at their operations to ensure the organization is ready for AI. Why? Because AI won’t fix problems, it will emphasize them. The first step to success: eliminating operational friction.
What Is Operational Friction?
Operational friction refers to the small inefficiencies that slow down work, create confusion, or reduce effectiveness across a business.
It shows up in familiar ways:
Information entered more than once
Customers transferred between teams to get answers
Conflicting priorities across departments
Delays, workarounds, and inconsistent data
No single issue defines the problem. Instead, friction accumulates across systems, workflows, and relationships. Together, they create drag on performance.
If systems are aligned, AI can accelerate performance. But if systems contain inefficiencies, AI will scale those problems faster and more consistently.
A Familiar Pattern: Technology Without System Design
This is not a new challenge.
During the Industrial Revolution, manufacturers adopted new-fangled technology like mechanized looms and steam power. But the companies that simply layered new technology onto poorly designed workflows failed. The organizations that succeeded designed systems that reduced friction.
Take Henry Ford, for example. He did not invent the automobile or the assembly line. His contribution was identifying friction in production, breaking work into discrete steps, and redesigning the system so each step flowed into the next.
The result was not just faster production, it was smoother production.
How Friction Shows Up in Business Operations
Even strong organizations experience operational friction in everyday work:
A customer calls for an update and is transferred multiple times
An employee re-enters information that already exists
A salesperson makes a commitment that operations must scramble to fulfill
A leader asks a simple question and receives conflicting answers
That is not the way the work was designed. But it’s what happens over time. The friction accumulates, not as one major failure, but as hundreds of small inefficiencies.
The Risk: AI Scales What’s Broken
AI is touted as the answer to so many challenges. But without addressing friction first, AI will not be a benefit. It does not step back to question whether a process makes sense. It does not ask why multiple teams are duplicating work. It operates on existing systems and data.
As a result:
Poor data becomes faster poor data
Workarounds become embedded in workflows
Miscommunication becomes automated
Customer friction becomes more consistent
AI doesn’t eliminate inefficiencies; it scales them.
Four Areas Where Operational Friction Lives
Reducing operational friction requires understanding where it originates. The “Walk This Road System” identifies four key areas:
1. Capital: Skills and Relationships That Carry the Work
Both human capital (skills, training, problem-solving ability) and social capital (relationships, trust, and access to resources) shape how work gets done.
Understanding who people rely on to solve problems and how those connections function reveals hidden opportunities to reduce friction.
2. Clarity: What Matters Most
When priorities are unclear, people work hard, but in different directions.
If individuals across the organization define “what matters” differently, friction increases. Alignment reduces unnecessary effort and confusion.
3. Capacity: How Work Actually Gets Done
Capacity is reflected in day-to-day workflows.
Moments when employees hesitate, double-check, or create workarounds signal friction in systems. These are the points where processes need redesign.
4. Collaboration: How Work Moves Across Teams
Many breakdowns occur not within teams, but between them.
Every handoff, from sales to operations, operations to logistics, customer service to accounting, creates the potential for friction. Improving these transitions reduces delays and errors.
What Creates Operational Friction?
A common underlying issue is that organizations design systems for a “standard human” who does not exist.
These systems assume people:
Have unlimited time
Process information quickly
Remember details easily
Navigate complexity without difficulty
In reality, both employees and customers operate under many constraints, such as deadlines, competing priorities, and limited attention.
When systems fail to reflect these realities, friction increases. When systems align with how people actually work, outcomes improve.
The Business Impact of Reducing Operational Friction
Organizations that address friction before or alongside AI adoption see measurable results:
Stronger customer experience: Faster, more consistent responses
More engaged employees: Less time navigating obstacles
Better use of data: Greater confidence in decision-making
Revenue impact: Improved retention, growth, and performance
In these environments, AI supports people rather than replacing them and its value increases accordingly.
__________________
Why Leadership Matters
Reducing operational friction is not a technology problem; it’s a leadership challenge.
Identifying where work breaks down, aligning teams, and redesigning processes requires experienced leaders who can see across the organization and act decisively. With that kind of leadership, AI becomes a true force multiplier.
That’s where InterimExecs comes in. Our RED Team-vetted executives bring the experience, objectivity, and execution focus needed to reduce friction, realign operations, and position your organization for successful AI implementation.
If you’re preparing for AI, or not seeing the results you expected, call us at 847.849.2800 or contact us online for a confidential conversation about how to move forward with clarity and confidence.
Operational friction refers to the small inefficiencies that slow down work or reduce effectiveness. This includes duplicate processes, unclear priorities, miscommunication between teams, delays, and inconsistent data. While each issue may seem minor, collectively they create significant drag on performance.
Why does AI fail in organizations?
There are many reasons AI implementation fails, including lack of skilled leadership. Another reason: flawed systems. Instead of fixing underlying issues, AI accelerates them, scaling poor data quality, inefficient workflows, and misaligned teams. Without addressing these problems first, organizations see limited or negative returns on AI investments. One good way to address these challenges is to bring in highly skilled interim or fractional leadership from the InterimExecs RED Team to oversee AI implementation.
Does AI improve inefficient processes?
No. AI improves the speed and scale of existing processes, but it does not inherently fix them. If a process is inefficient or poorly designed, AI will typically make those inefficiencies happen faster and more consistently.
How can companies prepare for AI adoption?
Organizations should first identify and reduce operational friction by:
Clarifying priorities
Improving data quality
Streamlining workflows
Strengthening collaboration across teams
Bringing in skilled leadership, such as hiring an interim CIO who has experience with AI implementation.
What are common signs of friction in an organization?
Common signs include:
Employees re-entering the same data
Conflicting answers to simple questions
Frequent handoff issues between teams
Delays in responding to customers
Workarounds becoming standard practice
These are indicators that systems need to be redesigned before introducing AI, a job that is made for strong interim leadership such as a rock star interim CEO who can streamline operations so the company is ready to take advantage of AI.
Our agentic AI series explores how AI is reshaping operating models, workforce strategy, and the future of software. Across this series, InterimExecs CIO leaders examine the rise of agentic AI and what it means for companies navigating AI strategy and execution.
AI-native competitors, collapsing software margins, and the rise of autonomous agents have many leaders asking a simple question: Is our entire business model about to be disrupted?
Maybe.
But disruption is only half the story. What we’re really seeing is the rise of agentic AI. Those are systems that do far more than assist users; they execute real work.
To explore what this shift means, our InterimExecs CIO leaders look at how AI is reshaping operating models, workforce strategy, and the future of software.
First-year Change Agent members have access to the Interim Institute’s 4 hour audio program on the Fundamentals of Interim Management, and a one-hour strategy session to help jumpstart their interim career.
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