What is an Independent Executive?
Referring to an independent executive in the workplace is increasingly common, yet many remain muddled as to what they are and do
It seems as though there are almost as many terms used to describe the various types of an independent executive as there are words for water in the Hawaiian language. Many of these are driven by the marketplace and perceptions. Since many of the underlying principles of how executives market and sell their services are the same, we use the term independent executive to refer to the full spectrum of ways executives contract with clients. Here are a few examples of popular terms and how they are typically applied.
Part-time/Fractional independent executive
An engagement that occupies fewer than five days per week. A part-time executive role is typically one to three days per week and can last for up to a year or more. This is common in the area of finance and marketing. Companies do not have the budget nor the need for a full-time executive in these roles but certainly need some executive-level expertise. The need is ongoing and the role is likely needed until the company grows to the point of justifying the full-time cost. For example:
- A company lacks the financial expertise to grow without taking unnecessary risks: A part-time CFO will have the right expertise to give leadership the ability to make the right decisions for the company.
Interim/Temporary Independent Executive
The terms interim and temporary are often used interchangeably. They usually refer to an engagement in which the executive is needed five days a week for a short duration. This is most common when an executive is brought in to fill a gap between the departure of one key executive and the start date of a new executive, there is an initiative requiring hands-on expertise and management that is missing from that company, or the current executive team does not have any bandwidth left to accomplish the initiative. For example:
- A company is experiencing rapid growth and the infrastructure is starting to collapse. Most of the management team that started with the company has been promoted more for tenure than for ability or expertise. While the CEO concentrates on continuing the growth, an interim President or COO can put in more flexible and scalable infrastructure so the organization can withstand the rapid growth.
An executive is brought in to complete a specific task, often an assessment or planning. It is typically completed within a short timeframe. This is a great option for companies to fill an expertise gap, execute a strategic plan, project, or test the waters with someone new. For example:
- The CEO knows the company could be run more efficiently and that profits should be higher. An operations consultant can come in and quickly assess the company and determine not just where and what, but how, and lay out a plan that leverages internal resources. Many times, he or she finds low-hanging fruit that brings immediate savings to the bottom line and will work with the internal team to achieve those results.
The executive’s expertise is of great value to the company and is available as needed to provide insights. This can be done ad-hoc or during regular meetings. For example:
- A company has been stagnant the past few years and is not meeting its yearly goals. Every company goes through this stage at one time or another. A board member from a similar, but different industry can bring a fresh perspective to a company’s strategy to get it growing again.
Coaching as an independent executive
This can easily be an industry in itself. Since the nature of the work is well defined and does not include being hands-on in the organization, it is often structured and perceived as an advisory role. There are a number of certifications and trainings for business coaching, which lend more structure to the industry than most of the categories above.
Many independent executives have struggled for years trying to figure out whether to brand themselves as an interim executive, consultant, advisor, fractional executive, etc. Most executives can easily step into any of these roles. We have seen an increase in the use of the term “portfolio career” used to describe this.
The terminology is often marketplace driven. Though many can debate whether there is a difference between an interim executive engagement and a consulting engagement, the only perspective that matters is that of the marketplace. What term(s) is the target customer base most likely to use? If there is any uncertainty, then it comes down to a branding decision for the executive. Does the executive want to make the distinction? If so, what type of work does the executive want to target, i.e. interim, project, advisory, etc.? The more focused it is, the more the executive is likely to be remembered and referred.