What is Executive-as-a-Service?
In the Executive- as- a- Service model (also known as the Fractional Executive) a business contracts an expert to fill an officer role as opposed to hiring a staff member. This allows the business to acquire the advanced expertise and performance of a top-tier executive without exceeding its budget to meet the compensation packages many of these experts would require as full-time employees.
This model isn’t new. Companies have been hiring consultants since the first stone wheel chiseling business was incorporated eons ago. The new aspects of the executive-as-a-service model are twofold. First, companies are now trusting the management of whole divisions of business to outside subject matter experts, rather than putting them on the payroll. Second, this effective practice is exploding in popularity.
Much of the growth in this industry can be attributed to the funding structure behind businesses today, particularly the influx of private equity funds purchasing and merging more and more businesses. As ownership changes hands, there is sometimes movement in management to better align with the vision of the new majority shareholders. Some of these firms will bring in trusted executives to drive the new vision forward for a year or two while they find a suitable long-term staff member to take over full-time.
Common Business Areas for Executive-as-a-Service
In some areas of business the part-time-executive concept works extremely well; in others…not so much..
The most common executive-as-a-service roles include:
- Marketing Officer
- Financial Officer
- Legal Officer
- Sales Officer
Many companies hesitate to hire a part-time chief executive officer since that role is primarily responsible for the long-term vision of the company, and are less concerned with short-term results. It’s also uncommon for major businesses to outsource the human resources executive role; the HR executive plays such a critical role in setting company culture that its success depends on full-time engagement..
Why is a Marketing Executive-as-a-Service a Good Idea?
Marketing executives are the most popular roles to hire on a fractional basis for many reasons.
The average salary and total compensation package for a CMO in the United States today is roughly $250,000. Using New York, Los Angeles or San Francisco as examples, you’ll need to to double that amount. At Ebner.Marketing, part-time marketing executive packages start at $3,500 a month. So yeah, it’s cheaper to hire part-time to get things rolling.
The second reason is the expertise. For those companies that don’t need a CMO, but are in need of a VP or director skill set, not only is a part-time marketing executive cheaper, but the skill set of a fractional marketer usually outweighs that of most mid-level staffers. In other words, no amount of hard work compensates for expertise. Even an employee giving you 200 hours a month can’t match the ROI that a 20-hour-a-month executive can provide. It’s no fault of the employee, you simply can’t know what you don’t know.
Most part-time marketing executives bring a hefty rolodex to the table (If you’re under 30, think social media followers). Side note: I looked it up, Rolodex is still in business and that kind of surprised me: http://www.rolodex.com/
This set of contacts probably includes some amazing marketing vendors that can help you train your current staff on specialty marketing areas like paid search, website development, and content marketing.
Lastly, for those companies in growth mode, using executive-as-a-service will often drastically shorten the sprinting distance between your business and a minimally viable marketing ROI. If you’re growing, you’re often budget-strapped and need results faster than your large, fixed-revenue competitors. Hiring a marketing director or VP for $70k to $100k will leave you in test-and-see mode. There is nothing wrong with this, but if you need more rapid results, you’ll want someone running your marketing who has built complete lead generation and nurturing systems from scratch. Making the wrong bet on a piece of software, a website build, or an ad plan can cost you a lot of money and time. Hiring someone who bears the hard-earned scars of previous experience can save you hundreds of thousands of dollars.
The boom in the executive-as-a-service industry is a natural and effective adaptation to the current state of the digital economy. Companies that embrace this new way of business can benefit greatly.
If you’re in need of marketing expertise, whether for a small project or to build an entire lead generation system, Ebner.Marketing can help. More leads for less spend isn’t just our tagline, it’s our goal for every one of our clients. Contact us to learn more by calling (727) 222-3281or filling out our contact form here.