What the [beep] is a Fractional CxO?
We get the same “What the [beep] is a Fractional CXO exactly?” question dozens of times a year. With the shortage of experienced and diverse start-up and scale-up leaders, this number is increasing more and more.
The fractional CXO term CXO has come to fruition and is slowly maturing on its own since you can actually Google it, read about it in Harvard Business Review (HBR), and have Forrester report in 2020 that the number of CX executives is projected to increase by as much as 25% as companies across the globe start to realize the emphasis that needs to be placed on user experience right from their inception.
The Fractional CXO title has been composed of three principal elements:
- Fraction
- C & O
- X
1. “Fraction” refers to the relationship of a C-level executive to a start-up or scale-up
Most startups can’t afford another full-time leadership level role on their payroll but need leadership level work done ASAP. They often would prefer having one senior-level executive take on several hats at once, at least until they can justify several FTEs. Mostly, a fractional leader takes on few engagements simultaneously (typically 2 to 5) and work part-time for each venture for a pre-determined period (usually 6 to 24 months). Nowadays, the gig economy is in full swing and this is becoming more and more common. Furthermore, many leading tech startups are doing away with the traditional 4-year equity vesting schedule and are now offering a one-year vesting schedule to sought-after candidates. This trend is the beginning of a new era where talented knowledge workers and executives will increasingly have the ability to work for several startups simultaneously, or have the ability to pivot from one startup to another after they’ve completed short-term engagements.
2. The “C” and “O” stand for Chief Officer
This attribute to the title refers to the fact that a fractional leader takes on an interim C-level role complete with responsibilities and sometimes with direct reports. Institutional investors often frown at startups that come with a stable of consultants. Somehow, most don’t seem to mind when part-time leaders wear one or more official hats for the company for a pre-determined time horizon. Investors can value the CEO’s choice to manage their money and the equity in the company responsibly. Fractional C-level executives are even often featured on the official website under the leadership team. Their LinkedIn describes their role at the company for added legitimacy. Most importantly, fractional C-level executives and leaders have well-defined roles and responsibilities and are accountable for specific deliverables. They are often a Board Observer and usually they report to one person: the CEO. Sometimes a GoCXO fractional leader has been asked to mentor the newbie CEO or a Founder by a lead investor.
3. The “X” = Experience
The “X” has evolved over the years. It started by meaning pretty much “anything.”: Co-Chief Executive Officer, Chief Marketing Officer, Chief Commercial Officer, Chief Revenue Officer, Chief Financial Officer Officer, Chief Information Officer, Chief Technology Officer, Chief Operational Officer and Chief Risk Officer. Basically, the “X” stands for Experience. A jack of Trades, a Swiss Army Knife but a master in a specific topic. The best CXOs are a rare breed of professionals with cross-functional experience at start-ups and scale-ups alike.
So that’s about it; now next time when you are at a party and someone talks to you about Fractional CXOs, you can give your best shot in answering the question.
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