As businesses struggle to find executives who can be both specialists and generalists, a new model of leadership is emerging. Leadership author Sara Daw examines how fractional C-suite leaders are pioneering a flexible approach to executive talent, reducing organizational risk while bringing diversity of experience to growing companies.
Compliance and risk are top concerns for all functions of a business. C-level leaders will need the skills, processes, tools and resources to keep ahead in these areas, perhaps no more so than the chief financial officer.
A CFO’s detailed knowledge of company data and insight into revenue and operational expenses are what inform the business decision-making process. Without this data and insight, decision-making is based on gut or instinct — and is much riskier.
Yet an over-reliance on one CFO and other individual C-suite team members also increases risk in organizations. It jeopardizes the completion of critical tasks or risks omitting them altogether. Too much knowledge or dependency on specialist skills sitting with a few key individuals is dangerous.
And with the complexity, uncertainty and increased pace of today’s business environment, it is becoming harder to find all the skills and knowledge required to fulfill a functional C-suite position wrapped up in a single individual. In fact, 66% of UK businesses are still struggling with skills shortages, including at C-suite level. Most high-caliber executives fall into the categories of generalists or specialists, not both. Organizations’ unrelenting desire to have the best talent join their teams means they are searching for the impossible.
A better, lower-risk approach could be acknowledging that many C-suite roles have already expanded beyond the reach of a single individual and will continue to do so. The turbulent and changing external landscape requires a broader range of skills in a team of specialists rather than a single generalist. We need to revise our expectations and think differently about the C-suite of the future.
Hiring a fractional CFO can be a lot less risky; think of it as the access economy for the C-suite.
Fractional leadership explained
Fractional leaders are high-caliber executives who work with multiple businesses on a flexible basis, moving their positions from the payroll to an access role. Operating across the disciplines of finance, marketing, people, technology and so on, these individuals with extensive knowledge and experience have left corporates to gain more flexibility, variety and control over their lives. They have chosen to become self-employed and work with a portfolio of growing entrepreneurial businesses or larger organizations, each on a part-time basis, say, one day per week or two days a month to fit the needs of the organization, dialing their time up and down as required.
Instead of feeling the constraints of having a full-time, traditionally employed C-suite, using the access economy in this way allows businesses to layer in expert skills in several disciplines over time or even simultaneously. The organization then gets accelerated benefit from these functions developing in tandem. For example, a fractional CFO working alongside their part-time chief marketing officer, chief information officer and chief HR officer means the marketing, technology and talent strategies are properly funded, phased and coordinated, reducing risk and increasing certainty in outcomes.
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Read moreDetailsFilling specialist skills gaps
For growing and entrepreneurial businesses that don’t have a full C-suite, fractional leaders can fill these critical gaps. As part of their role in leading their function, they can also take responsibility for compliance, helping to develop the strategy and build internal capabilities while working with key advisers for industry standards. These leaders will be familiar with what’s needed, have the experience from their corporate roles and be scanning the horizon for future risk.
For larger organizations, many full-time corporate leaders have an overflowing to-do list, which in itself brings risk to their organizations due to over-reliance on these key individuals, overwork, risk of burnout and lack of time to fully address issues. Fractional leaders can help by supporting the incumbent C-suite. They can fill skill and capacity gaps, help to up-skill internal teams and deliver specialist advice for specific problems, innovation and opportunities. This serves to de-risk situations considerably.
Successful succession planning
Another area where fractional leadership can play a significant role is with succession planning, a key risk time for every business. Passing the baton to the next level of leadership is a critical aspect of long-term business sustainability yet is fraught with challenges — and often overlooked, to the business’s own peril. A shocking 37% of UK businesses do not have a succession strategy in place — and a further 10% haven’t even considered it. This is hugely risky; should the existing leadership team exit, they take their knowledge with them, leaving the business floundering, but it can be incredibly difficult for time-strapped CEOs and other business leaders to mentor new talent.
By reducing the strain of running the business, fractional leaders give the gift of time back to the existing leadership team, freeing them up to mentor upcoming talent, or to focus on the aspects of running the business that most interests them. Moreover, they bring an objectivity that can be extremely useful when it comes to identifying and mitigating risks during the succession process. Ultimately, fractional leaders can contribute much needed objectivity, wider perspective, outside knowledge and best practice to ensure succession gets the focus it needs.
Fractional leaders for the future
Having the ability to bring in specialist senior executives in a flexible way based on time, skills and budget requirements will de-risk a business considerably. While this new access economy model for the C-suite does have its limitations, such as in heavily regulated industries where having an employed compliance leader may be legally required, businesses can still engage with fractional leaders in a way that reduces risk. For example, C-suite executives can outsource non-core and tactical activities in the finance arena to specialists who deliver at scale, cutting down the time required for supervision and freeing up valuable headspace for the C-suite.
Ultimately, professionals from this C-suite access economy can bring broader industry perspectives, access to wider networks and most importantly cutting-edge skills for innovation, all of which reduce risk in a cost-effective way where the alternative is more a rigid, fixed cost investment or missing out completely on this talent.
Sara Daw is 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.” 
