Fractional Leadership and the Fractional COO

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As a small business owner, are you at the stage in your company’s growth where you’re experiencing poor cash flow, stagnant business growth, increasing overhead, or low or dipping conversion rates? Perhaps your operations can’t keep pace with your sales revenue or are slow or mistake-ridden. You’ve tried several solutions, but nothing has worked, and you’re not sure what to do about it.

At this stage in your entrepreneurial journey, your company has likely grown big enough that you can no longer afford to continue without senior executive leadership of your operations, and you don’t have the time to fill in. The challenge is that you’re not yet big enough to afford a chief operating officer (COO) with the kind of experience you desperately need on a full-time basis.

Or, in some instances, people are ready to hire (or replace) a COO full-time but know that the selection of the right person is so critical that they don’t want to rush it and are willing to spend the six to 18 months it might take to find the right person. They engage with a fractional chief operating officer (FCOO) on an interim basis because they cannot afford to leave that seat unfilled and lose precious momentum during the search process.

How Does an FCOO Engagement Work?

If you’ve decided that hiring a Fractional COO is the next step for your business, begin with the end in mind. This is the typical mantra of FCOOs. At the beginning of an engagement, they will work with you to learn about your business and determine where you are now and where you want to go.

Once you’ve determined that, they will work with you to map out a plan for getting you from point A to point Z. Depending on the critical issues weighing you down or causing you the most pain, they may tackle people issues, process issues or data issues first.

If successful, your Fractional Leader (FL) will help you grow and scale in a way you could never do on your own. They will ultimately help you interview full-time COO candidates, collaborate with you in the hiring process, and then transition a new COO into the position. Alternatively, using your new structure and processes, you may be able to transition the head of operations role to someone internally. The FCOO can help you train and mentor that person to level them up into the role.

The next step is to decide what type of FCOO is best suited for your business.

What Type of Leader Do You Need?

In terms of size and scale, I’ve seen two major types of businesses engaging the help of a Fractional Chief Operating Officer — small and midsize businesses. There are Doer Leader and Manager Leader FCOOs custom-made for each.

The Doer Leader

If you’re a small business, you probably have five to 20 employees and one person, or maybe no one besides yourself, on your leadership team. You need help with organizational structure, processes, and better data, but you also need someone to get higher-level stuff done. I call the kind of FCOO you need a Doer Leader.

FCOOs of this type typically come at a lower price point relative to Manager Leaders. Business owners often engage them for one day per week or more. Because, in addition to their leadership role, they’re also doing more tactical operations leadership or getting multiple cross-functional projects done, they may work two or two and a half days per week.

The Manager Leader

If you’re a mid-sized business, you probably have 20 to 250 employees and have a leadership team of two or more people. Your primary need is the leadership of someone who’s already built a business as big or bigger than yours and can put into place the structure, data, management systems, and processes your business needs to get to the next level. I call this kind of person a Manager Leader.

This type of Fractional COO typically has experience with larger organizations and engages with their clients at a higher level to determine the proper structure for an organization, define its goals, establish the right metrics to ensure it achieves those goals, and then drive implementation of those goals at the leadership team level.

These FCOOs typically, though not always, work for about one day per week or less. They frequently come at a higher price point relative to Manager Leader FCOOs for the same time commitment because of the more strategic nature of their leadership and their experience running larger organizations.

What to Ask When Hiring an FCOO

As with any FL, it’s critical that you communicate your desired outcomes and deliverables. By doing so, you can ensure that you’re on the same page with your potential FCOO. Consider the following when interviewing candidates:

  • If industry experience is essential and you believe the learning curve is too great and would take too long, ensure that the FCOO candidate has the industry experience you need.
  • If you need help on a specific kind of activity or transaction, whether that’s an M&A transaction, a due diligence process, a new product rollout, or a new system rollout, make sure you’re satisfied the FCOO candidate has experience with these types of operations.
  • Be clear about whether you need or expect them to physically work in your office, whether the engagement will be fully remote, or some combination.

Although each Fractional COO engagement looks different depending on the industry, your style and values, and the organization’s size, they result in improved team health, standardized better processes, real traction toward goals, and less stress. It also means that as a business owner, you can finally regain the feeling of satisfaction and enjoyment from the businesses you founded.


This blog is part of a series that outlines some high-level considerations and offers insight into the five major types of Fractional Leadership: marketing, sales, operations, finance, and technology.

The information is a consolidation of my personal experience as a Fractional Leader (FL), retaining other FLs in businesses I managed or manage, interviews with FLs on my podcast, Win-Win—An Entrepreneurial Community, and my network and relationships with other FLs.

My experience in operations and being a Fractional Leader in companies running on EOS certainly contribute to my knowledge of operations. I am not, however, a subject matter expert in marketing, sales, finance, or technology. I’ve written these topics with reliance on business owners and FLs in those fields — from a 30,000-foot perspective.

If your company’s marketing or sales efforts aren’t generating the level of performance you need, check out my blogs discussing the Fractional Chief Marketing Officer (FCMO) and Fractional Chief Sales Officer (CSO).

What Is Fractional Leadership and Can It Help Your Business?

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As a small business owner, have you reached the point in your journey where you’ve hit a “ceiling,” or what I call the Entrepreneurial Catch-22, in your business growth? A point where you can’t scale without bringing on an experienced C-level leader, but you also can’t afford someone like that until after your business has scaled.

Most entrepreneurs who survive the startup phase experience some variation of this. Don’t worry — there’s a solution: It’s called Fractional Leadership (FL). Working with a fractional leader can help your business break through that ceiling and escape the Entrepreneurial Catch-22.

Fractional Leadership means engaging with an experienced C-level executive who’s already scaled an organization like yours. By hiring a fractional leader and making them a part of your leadership team, you will fast-track your ability to break through the ceilings holding you back for a fraction of what it costs to hire someone like that full-time.

Why do so many founder-led businesses hit the ceiling again and again after passing through the startup phase? I believe it is usually because the people on the founding leadership team have never run a business that size before. And they certainly haven’t led a company as big as they want theirs to become.

The data backs this up. Contrary to the stereotype of entrepreneurs as experienced, savvy serial business starters, about 90 percent of startups are founded by people who never started a business before. If you’re feeling alone, like there’s something wrong with you because you don’t know how to solve the problems your business is facing now, you’re not. You’re just like 90 percent of the other small and midsize business owners out there.

Fractional Leadership Can Work for Any Small Business

My first FL client was a media company that creates ad placements on popular websites. In doing so, the media company gives their clients more revenue than they could get on their own. They grew 25 percent revenue in the first quarter I worked with them.

This was not because I have magical or mystical powers or am an ad tech guru. It was because I’d built a business from smaller than theirs to much bigger before. I knew where the pitfalls were and what challenges they were facing, and I’d already learned what to do through trial and error. I helped them skip past the learning curve.

Because they had me on board, there was no need for them to reinvent the wheel. I helped them gain the focus and discipline they needed to immediately attack some of the low-hanging fruit — the little things that were holding them back. They simply didn’t know how to do it.

Another of my clients was a cybersecurity firm that contracts with federal agencies. Their sales team had been hitting the ceiling for a while, and no matter what they tried, they couldn’t breakthrough. When I suggested they consider a fractional chief security officer (FCSO), the CEO was initially hesitant even though he had already retained me as a Fractional Leader!

I assured him he would get a lot further by trying it out than continuing to bang his head against the wall. So he bit the bullet and interviewed three FCSOs I introduced him to, each with relevant federal contracting experience.

Fast forward three months later. Kristen McGarr of Adroit Insights, the FCSO he chose, had embedded herself with the team on the days she spent there. She cost much less than the salary, bonus, benefits, and taxes they would have paid hiring someone full-time, and as a vendor, she started and ramped up in weeks, not months, as a major executive hire would have.

Kristen hit the ground running, learning how things worked and using her past success and knowledge to restructure the sales process. She knew what was important to track, coached the existing team to dramatically increase their closed sales, and hired and trained new team members to position them to grow. They grew more in the first year after retaining her than they had in the previous four.

Outsourcing Customer Service — Fine. But C-Level Leadership?

People know about outsourcing and utilizing freelancers for less-skilled activities like answering phones, data entry, and virtual assistance. In fact, the global outsourcing market for IT alone was $333.7 billion in 2019. But it sounds crazy to think of outsourcing C-level executive Leadership. Right?

But the truth is that Fractional Leadership isn’t as foreign a concept as it initially appears. There are elements of it in the way we have been using attorneys and accountants for decades, if not centuries. We consult with someone about the most sensitive parts of our business and accept their guidance and leadership in our financial, compliance, and legal decision-making even though they aren’t full-time employees and only bill us by the hour.

If your business is hitting the ceiling and you and your leadership team aren’t sure what to do about it but aren’t scaled big enough to bring the experience and expertise you need in-house, full-time, you aren’t the only one.

In the United States alone, the latest data available (2017) from the U.S. Small Business Administration Office of Advocacy shows 5.3 million businesses with 1-19 employees and nearly 6 million with up to 499 employees, with total small firms making up 99 percent of U.S. businesses.

Let me remind you, the vast majority of those business owners have never done this before either. But the fact that you’re reading this blog right now means you’re ready to explore how your business can break through that ceiling and grow!

Visit fractionalleadership.io or contact us today to learn more about how to take your business to the next level.