Ryan Moore, Wilson’s VP of Executive Search, and Nish Sampath, CEO of Switch Advisory, hosted a LinkedIn Live webinar discussing the difference between fractional and interim executives – and why these role types are gaining traction. Although both are often interchangeably used, it’s important to understand the different business practices around each to ensure long-term success for your organization according to its unique goals, revenue targets, and more. This ensures strategic alignment, especially during times of change and uncertainty.
For companies challenged by a leadership gap, interim is a natural solution to maintain continuity and steady the ship on a full-time basis. Enlisting interim leadership is helpful during big organizational changes and excels when stability is a main priority. On the other hand, for businesses that are stuck, fractional executives are beneficial to lean on. While a business may not be broken, it can get stuck in systems or experience a growth plateau against a revenue target or goal. In this scenario, a fractional leader comes in on a limited basis to help build structure, create momentum, and establish processes and rhythm – without the need for full-time support. This is especially useful when it’s not financially sensible to have someone full time, and you need a short-term push to recenter.
Real-world examples
You need an interim leader if... your CFO quits mid-audit and you need someone to step in for that current timeframe.
You need a fractional executive if... you’re at 1 million in revenue and your growth is starting to strain your systems and operations.
When asking whether a fractional or interim leader is better, it’s important to isolate business problems and criteria – including scope, required agility, and levels of complexity – to determine which role type is more fit for purpose. Another consideration is the timeframe this leader will need to be in the business for. If at first the timeframe is unclear, you can start with fractional and transition into a longer timeframe with an interim exec. This extends across senior leadership and the C-Suite, from CFOs, CMOs, and COOs. And the time needed, of course, varies based on the role, the level of operations, and hands-on work required that needs to be solved.
As an example, COOs, because of the time requirement to build foundational capacity, these leaders can stay in your organization for up to 6 months before passing it over to a full-time resource as your company scales. This is all based on growth goals, since fractional leaders can also remain for years until a certain revenue trajectory is hit.
Conversely, for CROs, their stint in a business typically ranges from 3-6 months since their primary focus is to help with developing a strategic, go-to market plan which is then passed onto another executive to execute.
It’s these considerations and business goals that are needed in order to definitively choose whether an interim or fractional leader is best suited for your organization.
Keep in mind these temporary leaders are adding capacity to an organization – and depending on what you’re building and your mission directly ties into what duration they’re needed for. Smaller companies with lots of complexity may take longer, as concrete processes will need to be implemented where none existed before.
After all, change takes time.
Oftentimes, it’s not easy to directly tie success from a single person’s effort to a revenue growth target or other KPI. While a measurable impact can still be noted, it requires clear expectations from day one of what the business needs to be delivered. This means taking annual goals and breaking them up into quarterly objectives and key results.
Additionally, when screening executives, it’s ideal to ensure there’s a demonstrated history of achievements in line with what your organization is looking to do. Transparency is key regarding project plans and milestones, and having alignment across the entire executive team helps build understanding around goals if they aren’t met.
Regardless, both types of leaders should go through the same value-based questions any other leader would have coming into your organization, because culture fit is extremely important when understanding how a leader can propel your organization into success.
This only answered a few of the questions discussed during the live. To receive all the insights, check out the full-length video below, including how to avoid hiring pitfalls and make the perfect hiring fit.