Fractional or full-time CEO: a job, or a phase?

Almost everyone asks this as a budget question.

It is not a budget question, and treating it as one is how businesses end up paying twice.

I get asked this most weeks. Usually it arrives dressed as arithmetic: a full-time chief executive, or a CFO, commercial or marketing director, costs this, a fractional one costs that, which is better value? It is the wrong comparison, because the two things are not different sizes of the same purchase. They answer different questions.

Here is the question that decides it. Is the work in front of you a job, or a phase?

A phase has an end. A job does not.

A phase looks like:

• We need a leader to bring together our talents and help get us to the next stage.
• We need to find product-market fit before we spend another pound on marketing.
• We need to rebuild the sales function completely and set up to grow.
• We need to get through a funding round with our numbers intact.

Each of those has a shape, a finish line and a moment where the intensity drops.

A job is different: someone has to run this every single day, indefinitely, and the business will feel it within a fortnight if they stop. If that is what you are describing, hire someone. A fractional leader is not a discounted full-timer, and asking one to be will disappoint everybody.

What you are actually buying

With a full-time hire you are buying availability. They are there for the unglamorous middle of the week, the corridor conversation, the thing nobody put on an agenda. That is worth a great deal and it is precisely what fractional cannot give you.

With a fractional leader you are buying judgement at a seniority you could not otherwise afford or attract, applied to a defined problem. Someone who has done the thing before, several times, and can tell you in week two what would have taken your team until month six to work out.

The trade is obvious once you say it out loud: less presence, more pattern recognition.

The mistake is buying one and expecting the other. A business that needs daily availability and buys judgement feels abandoned. A business that needs judgement and hires availability gets a competent pair of hands who is learning your problem on your money.

Three tests, and they are not subtle

Can you write down what “done” looks like? If you can describe the outcome and roughly when you would expect it, that is a phase, and fractional fits. If your answer is “well, it is ongoing”, that is a job.

Does the seat need seniority more than it needs hours? Some problems are volume problems. Most growth problems are not. If the difficulty is knowing what to do rather than having enough people to do it, hours will not help you.

Can the business absorb the pace? This one gets skipped and it is the one that bites. A fractional leader moves fast because that is what they are for. If your team cannot make decisions between sessions, you will pay senior rates for a queue. I would rather tell you that before we start than bill you while we find out.

Sometimes the honest answer is neither

Occasionally I have this conversation and conclude that the business does not need either one yet. The foundations are not there. There is no clear value proposition, no defined market, no evidence of fit, and putting an expensive leader of any kind on top of that just gives you a better-qualified person to be frustrated.

What that business needs is two or three months of getting the basics honest, and then this question answers itself.

Sometimes the answer is a piece of advisory work and the right tools, nothing more. I would rather say that and lose the work than pretend it was bigger. It is a shorter conversation than the one you have in month five.

The hybrid nobody names

The pattern I see work most often is not either of the pure options. It is a fractional leader who runs the phase and, as part of the mandate, defines and often recruits the full-time seat that follows. You get the judgement now, and you get a job specification written by someone who has done the job rather than by a committee guessing at it. The handover is the deliverable, not an afterthought.

That is usually the cheapest route in total, which is funny, because it never looks like it on the spreadsheet where this conversation started.

If you are weighing this up, the useful next step is not a comparison of day rates. It is half an hour working out whether you are describing a phase or a job, because everything else follows from that.

← All insights