Fractional leadership: Why is it slower to take off in Asia, and how to tap into this growth hack?
In the current tech and funding winter, “gig” leadership is making its way into Asia. From finance to marketing and human resources, it is transforming our traditional definitions of leadership within a company. We ask community and human resources leaders five burning questions about this trending topic.
A chief financial officer who only joined the team just for fundraising. A chief technical officer who rebuilt the infrastructure and then left. A chief human resources officer who worked with a company two days per week for six months while the company was rapidly scaling.
This is fractional leadership. It is basically an arrangement where top executives work on a strategic level but on a part-time, short-term contractual basis, often working with several companies at the same time.
It is not new. According to The New York Times, the concept has existed for decades, but became more popular during the pandemic. “It is a vocabulary that you hear being used a lot more within Silicon Valley as a resource to support organisational growth and transformation,” noted Susan Chen, Head of People – Asia at Riot Games.
This is beginning to spread to Asia as well. “To some extent, the funding winter forces people to explore other options and the tech winter is creating a greater supply of talent offering fractional leadership,” explained Susan, who is also the founder of co:grow, an organisational transformation advisory collective that offers fractional human resource leadership.
WHY DO WE NEED ‘GIG’ LEADERSHIP?
“Sometimes you cannot upskill everyone as fast as you need. You need to find a way to ‘domino in’ the talent.”
- Moritz, Portfolio Careers in Asia
The traditional view of a leader is someone who buckles down with the team, and steers it towards success. It carries with it an implicit sense of identity and loyalty.
By this yardstick, what is the benefit of a short-term, ‘part-time’ leader?
“With the development of technologies, the skills gap is accelerating not just for programmers, but in areas of artificial intelligence and machine learning products, as well as very traditional areas that are being disrupted. And this is constantly changing. Employers are saying, I need something today, something else tomorrow and something else next year,” said Moritz Kaffsack, a senior executive at a digital company, who in his spare time founded Portfolio Careers in Asia, a community of close to 100 senior talents looking to diversify their careers via fractional roles, side projects and mentorships.
“Sometimes you cannot upskill everyone as fast as you need. You need to find a way to ‘domino in’ the talent. The standard answer used to be that it will take three months to onboard somebody, but maybe not. If you're not looking for a full-time career switch at the senior level, but for a fractional role, it might be faster to find someone, faster to get it off the ground, and faster to see results,” he added.
“On the other hand, what I see in our community is that you have a senior talent entering the second half of their career. They might have just come back from maternity leave or simply want to run the rest of their career on their own terms rather than go back to a nine-to-six job, five days a week. People see the opportunity for more flexibility now,” explained Moritz, Portfolio Careers in Asia.
The fractional leader was born out of such demand and supply. Unlike consultants who simply recommend a strategy, fractional leaders have full ownership of the role and function within the organisation, and are working towards KPIs and outcomes. They strategise, execute, measure and adapt.
“In a volatile environment, it is hard to predict the difficulties and challenges that the next month will bring. There is real benefit to leadership that can take a hands-on approach to strategy, read the market, roll with the changes and pivot when necessary”, Moritz added.
HOW TO TAP INTO THIS GROWTH HACK?
“You can use fractional leadership as a bridge for six months so that you understand what type of leader you truly need,”
- Susan Chen, Head of People – Asia at Riot Games
Small companies can benefit from this model because they may not need or be able to afford full-time leadership hires in certain roles such as human resources or finance.
“Fractional leadership offers you better expertise at a scale that is right for your organisation at this moment,” said Susan. Instead of hiring a junior or mid-level manager full-time, they could get an expert for two days a week.
“The seniority of hires makes a big difference because senior executives hit the ground running much faster, they self-onboard and self-manage, and they're therefore able to give you traction faster than someone with less experience,” added Moritz.
But fractional leadership is not just about engaging a full-time expert on a part-time basis. It is an entire mindset shift where companies hire for a specific outcome such as fundraising or market access. This helps them narrow down the skills required in the fractional leader and the time commitment necessary.
For mid-sized companies that are scaling rapidly, or at other critical inflection points, fractional leadership could give them a lot more agility and interim support in planning, operations, human resources, tech, finance, marketing and sales.
This is especially useful when it is too early to fill a full-time leadership role or companies are not sure what they need. “You can use fractional leadership as a bridge for six months so that you understand what type of leader you truly need,” Susan said. This helps to prevent costly mistakes in filling leadership roles.
Even if the company already has full-time hires in certain roles, a fractional leader can add another layer of expertise and a fresh perspective, help with strategic planning and build new programmes to transform the company, she added.
CAN TALENT BENEFIT AS WELL?
Where in the past, experienced talent who want to work part-time may not have access to interesting jobs, the rise of portfolio careers gives the workforce different access points to the type of work they want to do. Instead of a full-time job, they can have three fractional leadership jobs. This introduces a new way for the talent economy to grow, reflected Susan.
“If you are experienced, it is very possible to convert full-time roles to fractional roles, especially if the role has been open for a while,” added Moritz, who had previously converted a full-time role to a fractional role for five months.
He added that this can be a very rewarding way for established talents to explore and contribute outside of their industry and transfer their skills.
WHAT ARE THE KEY CHALLENGES?
“Someone who is only partially committed will only be useful to an extent of contributing very specific experience or expertise and additional capacity but won’t have the full commitment you’re looking for,”
- Puay Lim Yeo, commercial director at Glints
Some like Puay Lim Yeo, commercial director at Glints pointed out that fractional leadership is not without limitations especially in a fast scaling startup.
“I think it can work but only if you structure it with very specific outcomes and deliverables. However, for a growth stage business, you really need ownership that goes above and beyond. Someone who is only partially committed will only be useful to an extent of contributing very specific experience or expertise and additional capacity but won’t have the full commitment you’re looking for,” he said.
He also stresses that it will be challenging to hire a fractional leader for business as usual responsibilities because they will need a lot more organisational context to be effective. “There is also the question of integration with the team, especially for very senior folks. How do you build trust with someone who is not fully onboard?” he pointed out.
Additionally, Puay Lim believes fractional leadership is not a long-term solution. “You want to optimise for certainty and continuity for your team so a fractional leader doesn’t really work in that sense,” he said.
WILL IT TAKE OFF IN ASIA?
Indeed, these are some reasons fractional leadership has been slow to take off in Asia.
Another key reason is that fractional leadership usually feels more remote. And unlike the US, Asia is still resistant to remote work. “In Asia, there is the perception of the value of having someone sit in the office and the value of face-time instead of placing value on the outcome,” Susan observes.
“The assumption is that full-time hires are strategic, and fractional is transactional. We need to move away from thinking fractional leadership is transactional in order for Asia to truly capture the value of fractional leadership,” said Susan.
It is also a common misconception that fractional leadership is cheaper. “You get more for less, but that doesn't mean you put less money on the table,” Susan shared.
“Many companies lean towards hiring someone who is cheaper and full-time, or they hire a fractional leader for two days a week but end up demanding four days from these individuals,” she added, citing these as reasons this model of leadership is not yet mainstream in Asia.
But Susan believes fractional leadership could take off in Asia in time to come. “There needs to be an understanding of an integrated approach to the workforce,” she reflected. “I believe there is an ecosystem of startups that would benefit from fractional leadership,” she said.