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Today's we'll be discussing how you can leverage your knowledge and career to work as a (highly paid) fractional CXO.
If you’re unfamiliar with the concept, fractional CXOs are executives who work in a chief operating role, but do so on an hourly or part-time basis.
Unlike consultants, however, fractional CXOs are expected to stay with a company for the long term.
Let’s dive in.
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Ever thought about leveraging your 9-to-5 job experience to launch a career where you help other businesses?
If so, you’ll want to pay attention to today’s issue.
While most people are familiar with the concept of consulting, fractional CXO work isn't as widely understood.
From Chief Information Officers to Chief Compliance Officers, many companies (and in particular startups) need executive level help, but do not necessarily require (or cannot afford) a full-time hire.
In the past, these needs were met by business and management consultants.
While that’s still a viable option, there are multiple downsides.
The first and most obvious is that a consultant is essentially a glorified freelancer. They’re hired on an hourly or project basis, typically work with multiple clients at once, and are in it for the short term.
Because of this, most consultants never stick around long enough to dive deep into a company’s culture, what makes it unique, or where it has advantages.
Additionally, the short-term nature of consulting gigs makes it difficult for the company’s executives to build any kind of enduring business relationship.
That’s not to say consultants cannot be hired and retained on a long-term basis, as many of them are. But consulting, by its nature, is a short-term and transactional relationship, as is freelancing and the agency model.
The second differentiator is that when you’re working with a high-priced consultant, the fees can add up extremely quickly. And the more in-demand or prestigious the consultant is, the higher their fees will be.
Fractional CXO work, however, offers many of the benefits of consulting while eliminating many of the downsides.
First and foremost, fractional CXO work can be viewed as a low-time-commitment form of employment. Because instead of being hired for a one-off or short-term project, the fractional CXO is expected to work with the company on an ongoing basis.
Which makes logical sense: While it can be advantageous to bring in a freelancer, agency, or consultant for a short-term project, companies don’t cycle through CXOs on a weekly or even quarterly basis.
Instead, most companies expect their executives to remain onboard for years / decades / forever once they’ve been hired.
What makes the fractional CXO unique is that they assume the same level of commitment as a full-time CXO, but do so on a part-time or as-needed basis.
This arrangement offers multiple benefits to the company doing the hiring.
First, it can be much cheaper to hire a CTO or CIO for 10 hours a month relative to working with a consulting firm.
Second, if the person you hire has experience in your industry - and in particular experience working with companies of a similar size - it’s likely that person will bring exponentially more value than a consultant would.
Third, because fractional CXOs are viewed as long-term team members, they can get much more hands-on with the business.
Especially as it relates to them learning the company’s way of doing things, identifying and leveraging the company’s A Players, understanding the company's strategy based on its SWOT analysis, etc.
As for how this applies to you, there are several benefits to working as a fractional CEO versus working as a consultant.
First, while consulting work may pay more (or may not), the long-term nature of fractional CXO work is more consistent.
As a result, once you land a client, your income should be much more consistent than what most consultants experience.
Second, one could argue that landing a fractional CXO client is easier than landing a consulting client. Why?
For all the reasons listed above.
From lower costs to understanding their company on a deeper level, there's a reason the fractional CXO market has exploded over the last five years.
At the same time, not every company will be open to this approach.
Freelancers, agencies and consultants still serve an important role in the business marketplace. And generally speaking, fractional CXOs are not meant to replace them.
Instead, this is a new way of doing business that aligns with modern trends.
From cutting costs to remote work, hiring fractional CXOs allows small businesses to benefit from the knowledge and wisdom of experienced executives without the cost of hiring someone full-time.
So if you have that level of knowledge and expertise, working as a fractional CXO is something you might want to consider.
💡 Takeaway: From a slowing economy to increasingly flexible hiring trends, fractional CXO work has exploded over the last five years. And given the long-term commitment involved, it's both more consistent and more secure than traditional consulting.
🎁 Resources:
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