Introduction

The world around us is changing at stunning speed across many dimensions where signals have been present for years. Depending on your information sources or network, generally ever present are topics on the post pandemic recovery, discussion of return to office vs. remote, debate about the state of the economy, and the slow drip of invented language like, “quiet quitting” or “quiet firing”, describing the power dynamics between employees and employers. The forces of macro economics, major global workforce shifts, social upheaval, combined with the rapid adoption of emerging technologies, not limited to AI, are driving a level of change that will be trying for large and small businesses to navigate.

For many, the last few years has been a time of unpredictability in business, both positive and negative. We have seen extreme growth as well as contraction. For some, hardship has entered the scene personally and professionally. The economy has suddenly shifted, the cost of money is high and as a result, the consequences of small mistakes become amplified to bigger issues. In this business climate, the stakes continue to be raised, though there are fewer second chances. The barriers to market entry continue to be lowered with new technologies driving a hyper-competitive environment. This period of time will continue to be challenging and will push businesses beyond comfortable limits to evolve faster, particularly with pressure from AI.

Leading Through Change

Change by definition is hard, because it suggests we must do something different. It is uncomfortable for individuals and organizations alike. Navigating change as well as leading others through it requires dynamic thinking, flexibility in decision making, broad skills, resilience, low ego, and level headedness, which together are a rare combination of attributes. Leaders who possess these qualities built throughout a career of diverse experiences coupled with the right temperament, will be the difference makers in business over the next decade. Think of these business leaders as captains specialized in navigation of extreme conditions, with a unique set of experiences to commandeer this moment. In some circumstances using this analogy, they can be like harbor pilots, with a specific task to navigate such as a bridge or port.

A skills-based mindset in hiring executives seems logical enough, though few companies understand what this means, so they fall into the trap of what they know, hiring predictable talent based on company size, industry, solution, job family, the previous job description, what others do, etc. More recently, companies have no idea what is needed and churn on talent indecision. Over the next decade, right fit experience from executives with a dynamic set of cross functional skills will be essential to navigating this market moment successfully, as we transition from the golden era of SaaS to the post AI economy.

SaaS, which was born from the disruptive period of cloud computing, is reaching maturity and is facing a set of complex challenges. It’s been a rough year for SaaS companies. While some would argue that business is great, for most, this year is teaching companies the revenue significance of customer retention, real measures of activity that drive outcomes, the importance of new ideas, metrics that matter, diverse skills, authentic culture and the power of teamwork. Many are now confronted with the challenge of how to incorporate AI rapidly into their roadmaps or how they fit into the AI conversation. Some SaaS companies who have seen incredible growth and success are assuming a defensive posture, while others see the signal of a new major era upon us, quite similar to the early days of cloud computing more than a decade ago. While many experienced executives have been through similar periods of business disruption, fewer of those executives thoroughly grasp the importance of gaining an unfair advantage to capture asymmetry during a time of immense disruption by utilizing emerging technologies.

“Thinking differently about executive talent due to the unique present circumstances for business should be considered. We are in a period that will require thoughtful, intentional leadership coupled with expertise in both innovation and change. Hiring operators who are also innovators is ideal for a timeframe in business where there are no second chances.”

Bridging the Gap

Founders and CEOs are beginning to discover that fractional leaders can bridge important gaps within their business. By definition, a fractional executive is an individual who is hired to fulfill an executive role but only demands a “fraction” of the full-time work, saving the business precious capital and possibly equity, which allows them to access valuable strategic resources and a level of skill not accessible when hired as a full time role. These executives are typically hired on a part-time basis, an attractive option for companies who lack the resources to take on a full-time executive or haven’t realized a significant need for one. They are often highly experienced, having spent many years in executive or consulting positions and are well equipped to deliver the leadership and expertise required to support the company’s desired trajectory.

The consequences can be significant for companies hiring executives into full time roles, particularly during separation where equity and severance is a factor. Fractional executives become an interesting alternative for organizations, who need new thinking, rapid innovation, and deep skills that many organizations could not afford or need in a full time capacity. For fractional executives, many enjoy sharing their knowledge to see a direct positive impact on an organization based on their depth of skills, though maintain flexibility in the work they choose. This compatibility between the needs of smaller companies and executives who can fill that need with ease based on experience, becomes the silver lining during this challenging period in business, in which skills based leadership and systems thinking is a competitive advantage.

When seeking a fractional executive, however, it’s important to first understand what kind of resource your company could benefit from. Is the right fit a highly specialized individual, or should they be acting as a generalist across multiple lines of business like a Swiss Army knife? It is also important to recognize, some functions in smaller companies are part of different functions in larger organizations, so having a skills-based approach when evaluating fractional executives is key, versus hiring a job title. For example, market segmentation can be part of an offering development process residing in a product organization, though in smaller companies this responsibility may reside in marketing. As another example, growth leaders can report to a CRO, though often report to a CEO for longer term goals as to not distract from annual targets.