The Gig Economy Comes for Corporate America
Freelance, part-time, 1099…all of these are simply more traditional synonyms for what we now lovingly call the gig economy.
While many think immediately of younger companies like Uber, Airbnb, and Etsy as the gig economy, contract work has been around for over 100 years touching careers from musicians to attorneys.
As we’ve watched the most recent gig economy develop through sharing (ridesharing, homesharing, marketplace…sharing), did we ever think there would be executive-sharing? Today’s gig economy has arrived at the one place believed untouchable by such a trend: the C-Suite.
What’s fueling this shift? Of specific interest to me, the millions of professionals from technology, finance, and professional services quitting in droves as the so-called Great Resignation carries on. According to the Bureau of Labor & Statistics’ Quit Levels report, since 2020 the total number of quitters across these three industries is over 36 million people. Concurrently, new business formations in the U.S. have totaled over 3 million since the same period. Thanks to @Greg Larkin, we have a proper term for this: The Entrepreneur Exodus.
We know that everyone is not leaving to create their own company, but we also know that many - if not most - are leaving to find a new definition of work-life. Workers have struggled for decades to find that unattainable balance, but that is because our society has historically observed work and life on either end of a scale. What’s changed is that the scale itself is our life. And what we do, how it fits with our needs, and how much we can earn becomes the balance.
Leaders and executives who aren’t leaving to launch a start-up have found a new pocket in the gig economy: The Fractional CxO. The term ‘CxO’, if you’re unfamiliar, refers to any Chief executive role (though not to be confused with CXO, Chief Experience Officer). Successful, seasoned executives are eyeing opportunities to break free of their golden handcuffs for the ability to lend their expertise to more than one company, creating flexibility in their workloads and lives, while diversifying their income streams.
In the start-up world where funds are tight and leadership is nascent, fractional CxO roles are becoming critical to leverage credibility, strategy, and culture. Hiring a fractional executive allows a company to bring in the right talent at the right time for a fixed period or to meet fixed objectives. It can be difficult for founders to truly identify and articulate what and where their gaps are. They may believe their issue is simply slow sales, for example, when in actuality it is the structure of their sales team or inconsistent marketing practices. The right fractional executive is able to listen to leadership, explore the concerns deeper, and target the root areas requiring their effort and expertise.
Get to know Alexis Vaughn and Nyla Beth Gawel, two growing experts in this field who have left their corporate-housed executive roles to offer fractional services. Alexis’ background in insurance and insurtech is impressive: she has led C-Suite roles overseeing sales, marketing, and learning & development. In 2017, she successfully sold her start-up MGA for an undisclosed amount - an MGA she impressively built with a staff of 26 women, and more impressively these women were single moms. Following her most recent role leading Agency Marketing for Cowbell, a niche cyber insurer, she recently launched Off Course Consulting, offering Fractional Executive services in addition to project and advisory services. Nyla Beth’s career-to-date is just as impressive. She has led marketing and strategy for the likes of Booz Hamilton and Verizon and launched her practice NBG Strategy Consulting almost a year ago. While she has deep expertise in the public sector, her passion has always been eyeing a company’s culture. A big believer that organizations cannot be successful with a ‘Do what we say, not what we do’ attitude, she has consistently developed and executed strategies that seamlessly weave together the roadmap for a company’s growth with their desired culture. I spoke with both ladies to learn more about their experiences and to help you determine whether a fractional executive role might be your next step.
FALLING INTO THE WORLD OF FX CXO
“What a fancy way to say part-time.” - Nyla Beth Gawel
“What the heck is this?” - Alexis Cierra Vaughn
Vaughn first heard of a Fractional Executive when an acquaintance said they were the Fractional CMO of a company. Still unsure of exactly what that entailed, Vaughn was contacted by a headhunter who suggested she look into offering similar services. “I immediately began researching and immersed myself in all things fractional.The more I learned, the more excited I became about fractional work, how I could leverage my expertise, and the prospect of working with multiple clients at once. I knew exactly what I wanted to do next.” Gawel’s consulting practice was well underway before she realized that fractional services would become a part of her offering. “One of the things that attracted me to this work was that you can’t get engaged in corporate bulls–t. You are so laser-focused on what you came to do that there’s simply no time for it.”
Both women made it clear: the flexibility of the role is not to be underestimated. Gawel shared, “I need to be able to manage my time. Is that call interesting for me to be on? Absolutely. But I already know what I am here to do, and that’s where my time and focus must be spent.”
“My contracts are transparent.”, says Vaughn, “I do not work on Fridays, you know you have me for X hours on predefined days of the week.” The control over her schedule became even more significant for Vaughn as her husband suffered a stroke the very day after she decided to launch Off Course Consulting. While he is rehabilitating extremely well, she now has the role of caregiver to add to business-owner and mom.
From the standpoint of financial flexibility, both women employ a variety of revenue arrangements including hourly rates, per diem rates, retainers, and equity shares. There are different levers to pull for different scopes of work. For example, if the hours worked and objectives to accomplish are clear, companies should expect to pay the rate upfront. For work that is more project-based, 50% at commencement and 50% upon completion is more appropriate. Finally, equity shares come in many shapes and sizes from the option to purchase at a discount versus being gifted the shares, both after a vesting period. For companies considering to hire for a fractional role and offering equity, keep in mind that you know this role will be leaving. Standard cliffs and vesting schedules will need to be massaged to account for this.
CHARACTERISTICS OF SOMEONE READY TO TAKE THE PLUNGE
“Know what you’re interested in…and what you’re not.” - Alexis Cierra Vaughn
“You’re in tune with your own value - not just confident, in tune.” - Nyla Beth Gawel
You’ll want to check these boxes first before determining whether the fractional route is for you:
🟩 Niche Expertise: You're an expert in something broad (marketing, sales) or narrow (line of business, industry vertical).
🟩 Time Served: You’ve done the work, made the mistakes, lived through economic roller coasters and paid attention to it all, for a minimum of 15-20 years. You know how your industry tends to react, where it stumbles, and where it can thrive.
🟩 Rebel: You love what you do - really. You love it so much that your greatest successes were driven by your ability to see what was needed and doing it. You’ve been up against corporate obstructionists, lack of funding, corporate politics, yet you persevered - and even thrived - in the ambiguity of it all.
🟩 Social Network: You are active and engaged in personal and online social activities. You are a thought-leader whose network sees value in your strengths. You’ve built relationships with a variety of decision-makers and doers over the years and can interchangeably use the term ‘colleague’ and ‘friend’ for many of those people.
🟩 Honest: You are confident about your weaknesses as much as you are about your strengths. You often prepare for the worst while expecting the best because you understand that naming the destination is the easy part. The journey is where all the unknowns lie.
That last one is key. “I didn’t realize all of my strengths until I wrote down everything I have done and accomplished. Things big and little,” said Vaughn. “Doing that also allowed me to define my value proposition, my differentiators - and I’m still refining those through each new client experience.” Gawel offered some key questions she considered when taking the fractional leap. “Are you able and willing to step away? Can you be your best if you don’t have the full picture? Have you thought through how to develop strong relationships fast within the organization?”
CONSIDERATIONS FOR NEGOTIATING YOUR TERMS
“Know what the market is willing to pay for a full-time you. How many clients will that take?” - Alexis Cierra Vaughn
“It’s best to go in with an ask / perspective when thinking through the structure of the deal. What makes it worthwhile for both parties?” - Nyla Beth Gawel
Gawel was at the finish line with a large prospect until she came across a limiting contract provision prohibiting her from working with other clients in the same industry. “That’s an industry I’m really successful in. Yeah, that’s not gonna work.” Luckily, she and the company were able to revise the provision to suit both parties’ needs, however, that required transparency and collaboration from both sides.
The world of work is shifting away from individuals being happy enough with a job offer to sign the dotted line. The benefits a company - whether established or a start-up - receive from hiring a fractional executive levels the playing field of negotiations. You become the author of your employment contract, not the company hiring you. “You’ve got to budget for the things that have always been a part of W-2 employment: the added expense to provide healthcare for your family, no longer charging travel and dinners to an expense account. These things also need to be taken into consideration,” advises Vaughn.
Setting boundaries is great in a discussion, but it don’t mean a thing if it ain’t got that (contract) swing. Vaughn made a great point in clarifying with her clients both when she is working and - just as important - when she is not. After setting clear expectations about time and cost, the next area to protect is your scope. “Even when fractional, you are a Chief,” says Gawel. “You represent the company, not just your area of expertise. That’s a challenge that can easily lead into scope [creep].” Consider supplementing your scope to also define work that is excluded. In situations where that might not be easy to know, you can create a fail-safe by including a provision that acknowledges that while changes in scope may occur, any change must be agreed upon by both parties in writing.
The pros to hiring a fractional executive are plentiful, however, it does require a strategy for, and transparency from, both parties. By nature, a fractional executive is not intended to become a long-term employee, but their work - and the value of it - is intended to be ingrained in the company going forward. Understand what the organization’s next steps are when your time is up. Perhaps it’s supporting the organization to hire the new permanent CxO or delegating the responsibilities you’ve maintained to a now fully-capable department. Define your exit strategy and its associated goals as clearly as the contract defines your fractional role’s responsibilities. This won’t only help with setting boundaries and expectations, but it illustrates the finish line for both you and the organization, making it clear when you both have accomplished a job well done.
