The fractional services model—where experienced industry professionals deliver strategic leadership to multiple companies on a flexible, shared basis—has been around for decades. But it gained real traction in the 2000s.

​

The term fractional CFO emerged during that time and has since expanded across the C-suite, including COOs, CMOs, CTOs, CHROs, and others.

​

Fractional services, in each of these areas, help smaller companies who can’t afford or don't need the C-suite executive full-time.  By working under a fractional arrangement, they get the expertise of the C-suite executive for the amount of time they need, at a cost they can afford.

​

However, because fractional had really started to catch on, the term fractional suddenly seems to be everywhere. And that’s both good and bad. 

​

Good, because of increased market awareness of the value a true fractional executive brings to the smaller business.  But bad, because most people still don’t fully understand what it really means, and that’s often because the term isn’t being used correctly.

​

Let’s be clear: fractional isn’t a buzzword and it isn’t a fad.  Fractional is a specific business model—and it’s here to stay.

​

Fractional isn’t consulting, interim, project-based, or temporary work.

​

It’s none of those.

​

And it’s certainly not like a traditional outsourced service.

​

Traditional outsourcing is deliverable (or report)-based. You might outsource bookkeeping, marketing, payroll, data entry, tax preparation, HR, or IT. Your outsourced service provider handles a particular task or series of tasks, and in return, you receive a specific product or service deliverable (or report).

​

Outsourced services are vital, and nearly every organization depends on them. But fractional is fundamentally different.

​

When you work with a fractional professional, you hire an individual (sometimes part of a fractional team) who works with you on a part-time, ongoing basis—essentially a fraction of a full-time executive. For example, a fractional CFO might spend one day a week working with your company, meeting with your leadership team, joining strategy meetings, and functioning as an integral part of your company.

​

Fractional work, in other words, is time-based. You get a certain amount of time each week or month. Deliverables follow naturally as part of the role. You see and work with the person just as you would with an in-house team member.

​

Unfortunately, because the term isn’t regulated, “fractional” is now slapped on all types of services that have nothing to do with genuine fractional work. Many traditional outsourced service providers have started to rebrand their commodity services as “fractional” to ride the wave of popularity. The result: confusion in the market about what fractional really means.

​

But those of us who have lived it know the difference.

​

True fractional work involves an experienced executive—someone with years of industry expertise—who becomes part of a company’s leadership team on a recurring, long-term basis.

​

Many fractional executives typically serve two to four companies each week. But just because they’re not there every day doesn’t mean they’re not fully engaged.

​

At FocusCFO, we emphasize that fractional means our CFOs are embedded within the companies they serve. Being embedded means being involved in everything—from high-level strategy to day-to-day details—just like any other member of the leadership team. Others may define it differently, but this is how most experienced fractionals see it.

​

We also emphasize that true fractionals have worked IN industry, not FOR industry. 

​

That’s really important—and it’s worth saying again: