The Perils of the People Business

This weekend I read an article by Jason M. Lemkin on SaaStr.com covering Fractional CMOs and CROs that was headlined “The Only Times I’ve Ever Seen Them Work.” I ended up commenting and adding to the use cases Jason highlighted. I also feel there is more to this story, especially with a focus on the Fractional CRO or, with titles aside, more broadly, the Fractional Sales Leader, hence this article.

Jason, again, thank you for highlighting Fractional CROs and CMOs, and sharing where you have seen the concept work:

• “If the Fractional CRO/CMO works at least 60% time and owns the function and its core KPI for real.” I absolutely agree ownership is key; the time invested, though, is not so much since we all want to pay commercial functions for outcomes, not time spent.
• “If the Fractional CRO/CMO, as part of the job, finds and closes the full-time VP of Sales/Marketing.” Replacing yourself with a FT resource is, in most cases, the ideal outcome of a fractional assignment.
• “If you have a strong existing sales team that needs some mentorship.” A perfect opportunity to bring in experience and an outside perspective.
• “If you have a new, stretch sales leader doing it for the first time.” Another perfect opportunity to have a seasoned Fractional work alongside them.

Based on my years of placing Fractional Sales Leaders, I would add the following scenarios:

• If a technical founder lacks the experience in building a sales engine (Process & People) to move beyond selling to friends and family. And to Jason’s point, this Fractional Executive has to own the function and the KPIs.
• If a sales team is stuck and revenue is plateauing. Instead of firing your VP of Sales, bring in a Fractional Sales Leader and their fresh ideas and experience.

After almost four years in the Fractional Executive space, I have seen a myriad of scenarios. Fractional Sales Leadership is not a one-size-fits-all; it is not the right solution every time. Writing to that effect about a year ago, I identified six factors to consider in the decision:

1.???? Size of the sales team: It is the span of control question. How much time does it take to develop strategy, messaging, process, tools, and tactics, as well as train and coach the team on those, keeping an eye on the need for changes and executing them?

2.???? The ambition of the business: Maintenance or growth, preservation or change? Preserving the status quo is something almost anyone can lead. Change and growth require the skill and expertise a seasoned sales leader brings to the table.

3.???? The openness of the executive team: A fractional sales leader works intensely with the other functional leaders; executives heading operations, manufacturing, or legal are critical partners. They need to be aligned and accept a fractional executive as an equal.

4.???? Transparency regarding the engagement: A Fractional Sales Leader becomes a full member of the management team of the client company for the duration of the assignment. They will operate as part of the team rather than as an employee of an external organization. Unwillingness to operate under this transparency will lead to failure.

5.???? Compensation: As Founder, Owner, or CEO, consider what you need to, want to, and can afford to pay your Sales Leader. And since the simple formula is that you get what you pay for, this becomes a very transparent decision.

6.???? The openness of the owner or CEO: An outsider brings a fresh perspective, especially when this outsider doesn't need to think of a career or other benefits but rather focuses solely on what's best for the organization. This will produce new ideas, strategies, products, habits, culture, and so much more. The owner or CEO needs to be prepared to hear those truths and act upon them. Otherwise, it is a failed investment.

When it is not a fit every time, what is it them?

It is an option, one that is newer, one that has a rightful place in many SMBs looking for growth, change, and a fresh perspective. And it requires two fundamentals to be in place to ensure a successful Fractional Executive assignment:??

• In order to achieve the desired outcomes of the business, the expertise and leadership of a Fractional Sales Leader are not required full-time.
• The Fractional Sales Leader with their experience is a perfect match to those desired outcomes, been there, done that.

It is people's business, after all. When Founders, Owners, or CEOs comment that their Fractional Executive did not work out, when they complain equally about hiring and firing salespeople because they didn’t perform, or when the average tenure of their first full-time sales leader is somewhere between 12 and 18 months, it often goes back to not selecting the perfect match.

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Contact us if you would like to explore the Fractional Sales Leader option for your business.

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Jason Lemkin – Fractional CROs and CMOs: The Only Times I’ve Ever Seen Them Work