Edition 30: Overcoming Your Fears of Hiring Fractional CxOs

A Guide to Confident Fractional Leadership Decisions

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Dr. Michael Thiemann

COE/Founder of Strategy-Lab SAS and Entrepreneur & Leadership Academy

Startups are a balancing act—balancing growth against risk, innovation against stability, and ambition against limited resources. When it comes to deciding to bring in external expertise, startup founders often face a series of fears that seem overwhelming. Questions around cost, control, confidentiality, and commitment come to the forefront, making it hard to pull the trigger on a decision that could transform the business. Today, we will explore these common fears about hiring fractional CxOs and offer practical, real-world solutions to help you move beyond them.

The Cost Fear: Is It Worth the Investment?

The perceived cost is one of the most common fears that prevent startups from hiring fractional executives. Bringing in an experienced executive, even part-time, feels like a daunting financial commitment for a company still trying to get its feet under it. But let’s examine what happens when this fear takes the wheel: in many cases, the lack of experienced guidance can become even more costly.

Consider a promising fintech startup that was growing faster than its founders anticipated. They faced operational chaos—product delays, missed deadlines, and confused customers. They chose not to hire a fractional COO because of cost concerns. Eventually, their issues grew, leading to a substantial loss in revenue. In this case, the cost of hiring a fractional COO would have been significantly less than the compounded losses from disorganized operations.

Fractional CxOs come at a fraction of the cost of full-time executives while providing targeted expertise precisely when needed. They often prevent costly missteps by making informed decisions early, thus saving a lot more money in the long run. Instead of looking at the upfront expense, consider it an investment in the company’s ability to avoid pitfalls and capitalize on growth opportunities.

The Control Fear: Will I Lose the Reins?

Startups are deeply personal for their founders. Entrepreneurs invest not just money but their energy, heart, and soul. So, the idea of bringing in an external leader, even for a fraction of their time, can make founders fear a loss of control over their business. This fear is valid but often exaggerated in practice.

Fractional executives don’t take over—they help founders stay in control by providing the tools and insights necessary to make better decisions. Imagine a startup where the founder acts as CEO and CFO, making complex financial decisions without the required background. The founder isn’t giving up control over finances by hiring a fractional CFO. Instead, they’re empowering themselves to understand their financial position more clearly and make more strategic moves.

Let’s take the example of a tech startup struggling to get its MVP off the ground. The founder, an excellent engineer, was hesitant to bring in a fractional CTO because he feared losing control over the technical direction. However, after months of slow progress, he realized he needed help. Rather than taking over, the fractional CTO worked alongside the founder to streamline the development process. The founder still had control but with added expertise to direct their vision more effectively.

The Confidentiality Fear: Can I Trust an Outsider?

In a startup environment, information is currency. Proprietary technologies, customer data, and business strategies need to be protected. Understandably, sharing sensitive information with an outsider can make founders nervous. However, the founder can effectively address confidentiality concerns with the right structures.

First, hire only fractional executives with a proven track record and stellar references. Most fractional CxOs operate under strict confidentiality agreements, and their reputation relies on their trustworthiness. Their experience in different companies often means they have handled sensitive information before and are well aware of the stakes.

For example, a health-tech startup worried about sharing proprietary research data with a fractional CFO, fearing leaks that could benefit competitors. However, they vetted several candidates thoroughly and brought in a CFO with extensive healthcare experience and impeccable references. With well-drafted non-disclosure agreements (NDAs) in place, the startup felt confident that their sensitive information was in safe hands—and they were able to benefit from a financial strategy that accelerated their funding round.

The Commitment Fear: How Committed Are Fractional CxOs?

Another common fear is whether a fractional CxO, who isn’t working full-time by nature, will be genuinely committed to the startup’s success. Founders worry that these executives might not be as invested in their vision or dedicated to seeing the company through its challenges.

Fractional CxOs are, in fact, highly motivated to deliver results. Their value lies in the tangible outcomes they achieve within a set period of time. Unlike full-time executives, who may be balancing internal politics or focused on climbing the corporate ladder, fractional CxOs are there for one thing—achieving specific outcomes. Their reputation and future engagements depend on their ability to make a significant impact quickly.

Take the case of a consumer goods startup that brought in a fractional Chief Marketing Officer. The founder initially worried that the CMO wouldn’t be committed since it was a part-time engagement. However, the CMO’s dedication was evident from day one—they set clear, achievable goals, held weekly check-ins, and provided transparency throughout the entire process. Their marketing campaign resulted in a 30% increase in customer engagement within just a few months. The founder realized it wasn’t about the number of hours worked but the value delivered.

 

Practical Solutions for Overcoming These Fears

Clarity, alignment, and communication are essential to overcoming these fears. Here are some practical steps:

  • Define the Scope Clearly: Start with a well-defined project or set of objectives for the fractional CxO. When goals are clear, both parties know what to expect, which helps build trust quickly.
  • Set Regular Check-Ins: Establish regular check-ins to discuss progress, address concerns, and adjust course if needed. This keeps communication open and ensures everyone remains aligned.
  • Confidentiality Agreements: Establish robust confidentiality agreements to ensure that all parties are clear about the sensitivity of the information shared.
  • Trial Periods: Consider a short-term engagement as a trial. This allows both the startup and the fractional CxO to assess fit without long-term pressure. If the arrangement works well, it can be extended.
  • Ask for References and Case Studies: Trust is built over time, but you can start the process by asking for references or case studies from previous clients. Fractional CxOs with proven success will have examples of past achievements that align with your needs.

Moving Forward with Confidence

The fears around hiring fractional CxOs are understandable but also surmountable. With the proper preparation and mindset, bringing in fractional leadership can help startups overcome growth hurdles, fill critical expertise gaps, and bring stability in times of change. Instead of seeing fractional executives as a loss of control or a risky investment, consider them as seasoned navigators who can help chart a clearer, more efficient course for your startup’s journey.

The actual cost of not hiring the right leadership at the right time can be far greater than the perceived risk of bringing in a part-time expert. For startups ready to scale, it’s time to move beyond fear and toward informed, strategic action.

Are you curious how fractional CxOs could transform your startup’s growth path? Reflect on the hidden costs of leadership gaps as discussed in The Real Cost of Leadership Vacuums in Startups. And if you’re ready to take the next step, stay tuned for our upcoming post, Strategic Hiring: Which CxO Does Your Startup Need First?

Create Future Today ~ Dr. Michael Thiemann

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Image of Dr. Michael Thiemann who offers services: Consulting, Project Management, Non-Executive Diector, Fractional CxO, and runs the Entrepreneur & Leadership Academy

Michael Thiemann, The Future Shaper, is an Author, Forbes Contributor, Keynote Speaker, Podcaster, and Global Business Leader. 

As a founder of Strategy-Lab, he is a trusted senior global advisor and results-driven business & transformational strategies for today’s and tomorrow’s visionary and innovative organizations.

Dr. Michael Thiemann
CEO, Strategy-Lab SAS & Entrepreneur & Leadership Academy

Michael helps entrepreneurs and leaders Create Future Today by creating an adaptable and innovative culture that generates people and customer-focused business ideas and makes the organization sustainable for the future. Click here to learn how Michael can help you and your organization.

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