The Network Effect of Fractional Leadership

Key Takeaways

• Fractional leadership works through a network effect — helping one person grow ripples out to their team, their company, and that company's clients.
• Growing teams often outgrow the ad hoc systems that got them there; a fractional leader helps close that gap without the cost of a full-time hire.
• Human flourishing and running a consultancy aren't in conflict. The work of building a business and the work of helping people grow can be the same work.

As I reflected on the lessons from Incorruptible over the last week, I’ve been wrestling with the idea of putting into practice the lessons on building a human flourishing company with my current endeavors to continue to build my fractional CXO consultancy. 

Are these two ideas in direct opposition?

Since Valdivya is just me, Jesse Hormachea, I keep coming back to what my personal mission has always been. I get the most joy out of helping others succeed at their role, their career, or their company goals. I believe if I can help one person grow in a positive direction, the network effect is that I’ve helped a team, a company, a product, and their clients be just a little bit better.

This idea is what I’m building Valdivya on top of. I am in a position to coach and build more across multiple streams rather than one single organization. I’ve built organizations. Now I want to focus on building more broadly and the people I can directly impact along the way. 

As I’m now about two-thirds into the year, having worked with clients of all sizes, I’m looking for the themes in the work to help me work with more great people.

Here are some of the benefits of working with a fractional operational leader.

Outside Perspective

As I stepped away from my COO role last year, the most eye-opening thing I’ve learned is how easy it is to close off. You get focused on your team, your industry, your projects. Once I had the opportunity to poke my head back out into the world, I realized two things:

1. My experience in technology and my leadership capabilities are an absolute asset to the organizations I’m working with. Even outside of my technology-focused clients, I bring a wealth of knowledge that helps the team build on top of technology and grow.
2. I can learn so much more across an assortment of clients than just narrowing in on one team. This mix is already letting me bring lessons from the professional services world to health care teams. I can take ideas that work well for the construction industry over to the non-profit space.

Creating a space for myself to gain perspective and bring new perspective to teams helps call out the gaps in the room. We’re all guilty of getting stuck in our bubble. When I bring ideas to a team, I’m not just solving today’s problem. I’m giving people a new way to see their growth and career path. It’s impactful in a way that lasts beyond my engagement.

Fractional Cost

There is no getting around the fact that cost is a major factor in the talent you can bring into your business. It’s especially hard for small businesses hitting milestones. Going from 8 to 20, 40 to 60, getting past 100. Each brings operational challenges whether with tools, process, or people. Bringing an experienced executive in at that scale isn’t always feasible. The fractional consulting model lets any team have access to someone that’s handled these challenges before. The access matters less for what it saves you and more for what it lets you provide in leadership to your team.

Been there, done that

Something I’ve noticed this year is that growing teams don’t always know what’s possible. Many founder-led companies have the founder doing it all because that’s what they’ve always done. It’s possible when you’re 8. Maybe even 20. Once you get past certain thresholds, it’s time to start operationalizing pieces of a founder’s role. These leaders tend to be really good at what they do but they are in uncharted water. Many aren’t aware of the systems that exist to streamline your hiring process, your sales operations, or your project capacity. It’s all being done through email and spreadsheets. Maybe an overwhelmed admin assistant trying to keep up. I’ve also seen the tendency to look for a specific service rather than having a strategy. Should you hire an IT admin or a managed services team? Do you need an HR person or outsourced HR help? Having someone on your side who’s walked the path before, who can set up the process, and get people on board, lets the founder do what they do best - sell, innovate, and deliver. Letting someone else own that path forward isn’t just about delegation. It’s an opportunity for the founder to grow, and I want that for everyone on the team.

Leadership Development

A key component of any growing team is identifying and fostering future leaders. Eventually, any growing team will need to expand to a management layer. In my experience with small business, you tend to look at your best individual contributors and turn them into managers. They usually lack the support to go from contributing to managing. Then from managing to leading. The weight of these new responsibilities can be a lot. Many founders are moving down this path for the first time themselves. As they feel less in control, early founders tend to struggle with this pivot. It’s where the wheels can come off and momentum gets lost. You get crushed under your own weight. This is an opportunity to develop clear process, expectations, accountability, and metrics to gauge the health of the company as things expand. I’m so passionate about this side of the work and the opportunities to help individuals turn into great leaders. Every manager I help develop becomes someone who develops the next one. 

Recognizing these themes, I’m more driven than ever these last couple weeks to continue the mission - human flourishing across a growing organization.

I’ve added a new client at about one per month so far doing projects of a few hours to retainers including industries like health care, consulting, construction, professional services, and IT managed services.

I don’t care what part of the puzzle I get brought in on. I can confidently say I’ve made some part of the organization better as the engagement ends. It’s the most satisfying part of the work so far to work with the individuals on these teams and unlock new capabilities for them. Confidence in their leadership, security in the tools setup, and being able to bring new ideas onto the team. It is possible to create human flourishing in a consultant role. When I look back at my career, I’ve always done that in my client-facing roles. 

If your team is hitting new milestones, I’m here to help growing companies close the gap between the business they’ve become and the systems built for the business they were. Some weeks that might look like aligning your team’s capacity to the work, configuration of a new tool, or enabling your leadership team to run honest, accountable teams.