In years of pairing executives with companies in need, we have learned that there are times when full-time is too much time. That’s when companies benefit from choosing a fractional executive. It’s a way to get top-notch skills for a fraction of the time at a fraction of the cost of a full-time hire.
On a webinar, InterimExecs CEO Robert Jordan laid out the 5 situations when hiring executives on a fractional basis makes the most sense for companies:
Fractional executives are the hottest thing in the C-suite. Once a rarity, fractional executives have gone mainstream, especially since the pandemic. Companies across the spectrum, from start-ups to Fortune 500 firms, are considering hiring fractional or part-time executives.
During a webinar, InterimExecs CEO Robert Jordan took a look at the trend and some situations when a fractional leader might make sense for your company.
CEO resignations for the first nine months of 2023 hit 1,425, the highest number since search firm Challenger Gray and Christmas began tracking the data in 2002. That figure is up a whopping 47% from the 969 CEOs who left their jobs in the first nine months of 2022.
That means companies across the US are scrambling to fill a leadership void. And, if the trend continues, it means that every company should be preparing for the sudden need to find a new chief executive.
Here, we look at the most important steps a company should take when there is a vacancy at the top of the leadership team.
Every business owner dreams of gaining major traction in the marketplace. Fast-track growth, however, often comes at a cost. Things get taped together. There’s no process to speak of. Systems? Ha. Things go missing, including clients and team members. Lack of resources means that even the crown jewel – the company’s ability to out-innovate — may be put on hold just to keep up.
When a company grows faster than the capabilities of the leadership team, the company can hit the wall.
Smart fast-growing companies have started looking to part-time or fractional executives to provide C-suite leadership, mentorship, and the operational upgrades needed to help a company break through the ceiling to growth.
Fractional executives bring the fresh perspective of experienced C-level executives quickly and affordably. With a focus on getting results, companies find that renting the rock star exec outweighs getting 100 percent of the time of a lesser light.
What is an interim executive? It’s a highly knowledgeable and deeply experienced C-suite executive ready to step into a company in need of superior leadership.
As veterans of the interim business, we know that pairing the right interim executive with the right company is a delicate balance. After all, private equity funds or venture capital funds get one use of their dollar. Just one. Fund managers have a sacred charge of evaluating opportunities and investing the funds they’ve been entrusted with by their limited partners in hopes of maximum returns.
Likewise, we get one chance to make a great match. We must identify the interim executive with the right skills and experience and catch that executive during the brief period of time they are in between assignments assessing the next opportunity they want to take on.
So how do we best deploy genius leadership when we only get one chance every day to maximize everyone’s time, unique skillset, and results? We start by being selective about our clients.
Cash flow mismanagement is a common problem among small and mid-sized businesses. But many owners do not have the experience to precisely pinpoint where cash flow mismanagement has occurred, nor the background to develop plans designed to counter those cash flow issues.
A typical small or mid-sized business owner can spend hours examining the company’s financial statement and nevertheless fail to see the underlying causes of cash flow problems, whether they be mismanagement of receivables, problems in pricing strategy, erosion of margins, escalating operational costs or other cash flow problems.
When you were growing your business, filled with an overriding sense of potential, did you also start thinking about your exit plan?
Likely not. And with good reason. Entrepreneurs, business owners, and boards of directors are enthusiastic about their potential for success. They aren’t thinking about that moment when they are ready to retire. Or move on to a different business challenge. Or want to while away the days on a desert isle, sipping margaritas and reflecting upon their many successes.
But that day has come for you, which is why you’re in need of an exit strategy for your business.
We’re here to help.
Our six-part Business Exit Guide for Business Owners is the place to start your journey to the next chapter of your life and business.
Here’s what we will cover:
When it’s time to step away from the business you’ve built — because you’re ready to retire, you want to pursue another opportunity, or for some other reason — what’s the right way to exit your business?
The short answer is: It depends.
Here, we lay out five examples of exit strategies and look at who should consider each one.
The Roy family of “Succession,” the critically acclaimed series about which of the Roy family offspring would take the reins of the family-owned media conglomerate Waystar RoyCo., should serve as a cautionary tale for any business owner considering retirement. Business succession planning cannot be left to underlings to duke it out for control.
Succession planning is important for any business — family-owned or not. It’s critical for business continuity, preserving the legacy, and a smooth transition.
When it’s time to step away from the helm and choose a successor, there are three options available:
Actually choosing the person who will be your successor is the second step in this process. The first step is identifying where the company will be when it’s time for the successor to step into a leadership role. Do you expect the company to be sailing along at an even keel, continuing to do what it already does so well? Or are there rougher waters ahead that will require more creative leadership?
Having a keen idea of where your company will be when you plan to step away from daily leadership is critical to understanding what competencies and skills the new leader will need – and to maximizing the worth of the organization as you convert your ownership interests into cash.
Once you have a good idea of that, it’s time to begin searching for just the right person to lead your company into the future.
And, a side note: Even if your exit strategy is to sell the company, you cannot skip this step! The buyer will want to know that you have made plans for a smooth transfer of leadership.
Association Membership Application
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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