The New Era of Fractional C-suite Executives

A new model for navigating complexity and change

The demands and expectations for C-suite roles of the future mean more organizations are piling the pressure onto their leadership teams and widening their remits to deliver change, address global megatrends, and stay competitive.

Organizations have little choice but to ask and expect more of their leaders, with transformational skills at the top of their agenda.

In tandem, the Covid pandemic encouraged us to rethink our lives and what we want from them. Phenomena like the Great Resignation and Quiet Quitting ensued in the general workforce. For senior C-suite professionals, this included prioritizing their well-being over career progression and searching for a way of living and working that gives them more meaning, flexibility, variety, and control over their lives.

Given that the C-suite construct hasn’t been revisited since its introduction in the 1980s, it could be time to consider whether there is a better way to work with our senior leaders, one where we don’t need to employ our C-suite.

Corporates Want Superhumans

Having functional leaders making up the C-suite is popular and makes sense. These people are serial masters in their field with deep specialisms and experience in their disciplines, just what organizations require. However, we only need to look at a typical C-suite job ad today for us to realize the shopping list of desired skill sets is expanding dramatically. Global trends including climate change, political instability and war, ageing demographics, energy scarcity, automation, and digitalization to name just some, are the challenges driving organizations to ask for more from their top teams.

On top of excellent functional specialisms, organizations want their top talent to have excellent people skills, communication capabilities, and social abilities to mobilize and influence large workforce groups. These senior executives must work collaboratively to design and deliver corporate strategies and be the public face of the brand to stakeholders and the broader world. They need to have both interpersonal intelligences to assess the emotions, desires, and intentions of others, and intrapersonal intelligence such as self-awareness. These are the skills of leaders who navigate their way through organizations and inspire others to follow.

Yet the list doesn’t stop there. The Harvard Business Review article, The C-suite Skills That Matter Most [¹] refers to attributes including strong relationship-building capabilities, deep listening skills, the ability to work well with a wide range of people and groups, and what psychologists refer to as "theory of mind" – a knowledge of what others are thinking and feeling. Not to mention the importance for top talent to develop and understand the different types of power they have available to them.

Organizations also want their leaders to be good networkers. They must be able to master boundary spanning to work across different institutional, cultural, and organizational contexts externally while developing partnerships within and across functions and teams internally.

Excellent social skills and networking will also help senior executives lead the different generations in the workforce: Baby Boomers (born between 1946 and 1964), Generation X (born between 1965 and 1979), Generation Y or Millennials (born between 1980 and 1997), and Generation Z (born after 1997). All these generations have specific characteristics with different workplace requirements, which adds to the challenges of leadership and management. If you then layer this generational complexity into the customer base, you start to see just how much is on the C-suite plate. 

Our top leaders need elevated mindsets and the capacity to think holistically, not just linearly. Above all, they need to be competent in integrative thinking: able to hold several opposing views simultaneously without being overwhelmed by the difficulty and ambiguity that comes with this. Instead, they use this skill to find new and enhanced solutions, realizing that sometimes there are no perfect answers, just better or worse outcomes.

No wonder, as far back as 2001, Peter Drucker, in his article “Will the corporation survive [²]?” discovered the increased failure rate of CEOs of large US-based organizations within a couple of years of appointment. He argued then that the roles of CEOs and their executive teams were undoable, and a new way of organizing them was needed.

Expecting a single C-suite professional to have all these attributes is unrealistic. In addition, too much knowledge or dependency on specialist skills sitting with a few key fixed individuals is also dangerous and brings enhanced risk to organizations. It implies a shortage of collective thinking, varying perspectives, and diversity of ideas which will dampen innovation and creativity. 

But is it just a case of upskilling our senior people to deliver this extensive wish list of skills? We are already stretching our human capabilities to the limit. Do these superhumans, with all these attributes, even exist? And most importantly what do the CXOs themselves want?

Before describing an emerging solution, it’s worth reviewing how organizations and C-suite professionals are responding to these increased demands.

Organizational Responses

Corporates are acknowledging that many C-suite roles have expanded beyond the reach of a single individual and will continue to do so. Their response is to expand their C-suites to include more C-level positions to address the breadth and depth of transformational requirements. A trend of C-suite families with hierarchies is developing. Take the CHRO (Chief Human Resources Officer) for example, a member of the C-suite executive team responsible for several C-level positions. Their C-suite family might comprise the Chief Talent Officer, Chief People Development Officer, and Chief Learning Officer.

In addition, a study of the FTSE 100[³] reveals approximately 45 C-suite roles outside of the top nine in the executive C-suite, with the average staff C-suite member being responsible for eight other C-level positions.

The expansion in C-level positions is also backed up by Wikipedia which lists over 50 C-level roles, including less common ones like Chief Gaming Officer, Chief Visionary Officer, and Chief Cloud Officer.

This proliferation of CXOs and the associated inflation of job titles is an understandable outcome of a response to complexity. Yet, is it the best way to address it and remain agile? How many chiefs are too many? When does it stop, and do we need all these senior leaders and specialisms full-time and permanently if our environments are constantly changing?

Human Reactions

On the flip side, for the seasoned C-level talent, there are other dynamics at play. There is a growing trend of CXOs who are disillusioned with corporate life. They are searching for more meaning, flexibility, variety and control over their lives. Essentially, they want freedom of choice, who they work with, when, and how much.

The requirements in Corporates to be ‘always on’, to have all the information at their fingertips in real-time and to be both generalist and specialist are exhausting. Heavy workloads and the constant expectation to meet shareholder returns at all costs are demotivating and leave no time for anything else, making both work and home lives unenjoyable. Many are asking themselves "Why are we doing this?" Others are unhappy, stressed, worn out, and at risk of burnout.

Covid put a break into the system and gave us time to reflect. Some of us used the time to reassess our priorities and for many, we were able to experience working from home for the first time. This new perspective and the introduction of hybrid working allowed us to re-evaluate our lives and make changes. Some left the workforce entirely and others changed jobs. The Great Resignation and Quiet Quitting followed. These phenomena, together with the annual Gallup polls which show that only around 23% of our workforce are engaged, point to our working experience needing an overhaul.

If we focus on the C-suite specifically, a study by Deloitte and Workplace Intelligence in 2022[⁴] found that 70 percent of the C-suite were seriously considering changing their current role in favor of one that better supported their well-being citing heavy workloads, stressful jobs, and not having enough time off due to long working hours as the main contributors.

It’s clear that a new way of working for the C-suite is called for: one that enables access to a broader range of skills from a team of specialists rather than relying on a single generalist and which encourages us to think differently about the C-suite of the future.

The C-suite Access Economy

This is a ground-breaking approach gaining traction globally and involves moving the C-suite from the ‘pay-roll’ to an ‘access-role’. It requires organizations to put their preferences to employ their top talent to one side and instead embrace an access-economy team-based approach that utilizes deeply knowledgeable, committed, and connected portfolio C-suite executives working fractionally and on-demand.

It meets the needs of experienced C-suite executives who want more flexibility, control, and meaning in their lives, and who are breaking free from traditional employment to become self-employed. They get to concentrate on their specialties and work with a portfolio of clients, each on a part-time basis.

It satisfies the corporates who have realized that it is unrealistic to expect a single individual to have all the C-level skills they need, and it brings increased risk. In addition, they recognize that building extensive C-suite families increases the full-time headcount and complexity but lacks the important benefits of agility which are crucial in these unpredictable and changing times. This is their opportunity to think differently about how they resource up, with whom, and why.

How does it work?

The most flexible and wide-ranging solution will be from a firm of CXO providers, a new breed of organization, who have the depth and range of experiences in their CXO teams to get all the answers these larger businesses need to relieve the pressure on the employed C-suite team. They provide increased bandwidth, flexibility, and on-demand, from a team of deeply capable CXOs who don’t need micro-managing to get the job done, and probably at a lower overall cost compared to full-time equivalents. These firms enable corporates to gain access to the critical C-suite skills they need to grow and develop. They typically specialize in a particular function like finance, technology, marketing, and people and provide a community for like-minded C-suite professionals within that function to share knowledge and best practices, while supporting them to work fractionally and build their portfolios of clients.

There are two ways they can help larger organizations.

First, we have the Peer Solution where a Corporate requires the CXO skillset at the divisional or functional level across the organization to support the Group CXO. It’s likely that not all these roles are permanent and full-time – that’s just historically been the only option available, so they are often padded out with other responsibilities to make them full-time. In a shortage of CXO talent or until it’s clear the role is full-time; creativity is called upon to think differently. 

By using a team-based approach from a firm of CXO providers, and carefully designing the function, a Group CXO can gain access to the range of CXO experience they need on a flexible and joined-up basis to fit the dynamic nature of the business issue. Alternatively, organizations can use this approach to develop and grow their employed CXOs as the company expands. For example, they can use the access economy to bring in fractional or part-time CXOs with a proven Group CXO track record to mentor and transfer skills to up-and-coming CXOs, those new to a larger business, or first-time into the Group seat.

The best thing here is that these fractional CXOs will make the employed CXO look good and aren’t a threat. They don’t want that role; they’ve been there and done that. They do know what it feels like to sit in that seat though, and can advise, empathise, and help deliver. This, of course, saves the Corporate from employing fixed C-level talent when they need to remain agile and flexible, or the business case doesn’t warrant it.

Second, is the Full Team Solution. In this situation, the whole CXO function could be filled with a team-based approach from a firm of CXO providers. In this case, there would most definitely be a Lead CXO holding the function and relationships but on a part-time basis, and they would be supplemented with fluid capabilities from a team covering all the geographical, functional, and sector skill and capacity gaps. Some of these roles will be full-time interim and project-based interventions, while others will be ongoing part-time. This works particularly well when there are market shortages of CXOs, or the business is going through deep complexity and change meaning they can’t commit to long-term, stable, full-time roles.

Conclusion

The C-suite access economy is a new way of living and working for our top talent that challenges traditional employment. It provides organizations with access to the functional, emotional, and collective intelligence they need to thrive and forms part of an exciting pathway to the Future of Work for senior leaders. Most importantly, it shows that we don’t need to employ our C-suite.

Notes:

Sara Daw is Group CEO of The CFO Centre and The Liberti Group, and the author of Strategy and Leadership as Service – How the Access Economy Meets the C-Suite, published by Routledge on 09 May 2024.