Four Reasons To Consider Hiring a Part-Time or Fractional CRO
by Blackwood Impact Group
When it comes to growing your company’s revenue, having one team member focused on the bottom-line increases the likelihood of obtaining the results you seek. This individual’s primary responsibility would be to put strategies in place and help every department to work cooperatively to meet revenue targets.
That is the premise behind hiring a Chief Revenue Officer (CRO). In previous articles, we’ve outlined the role of a CRO and explored how to tell if your company needs to hire a CRO. This article is for those who have determined they could benefit from hiring a CRO but are weighing the pros and cons of making a full-time hire.
Our position here at Blackwood Impact Group is that most companies can benefit from their first hire being a part-time or fractional CRO. The CRO is still a relatively new position in corporate America, so most companies don’t have a history of success with this position; they are experimenting with this hire. Making the first CRO hire part-time or fractional will reduce some of the risks.
This strategy can be particularly helpful for smaller companies or for larger outfits who want to experience the advantages a CRO can bring their organization without jumping into a long-term commitment. Here are some of the drawbacks of making your first hire a full-time CRO and more details on why engaging a fractional CRO is a smarter move.
Drawbacks to Hiring a Full-Time CRO
When hiring a full-time CRO, your options are to either onboard an external candidate or make a promotion from within. An internal hire is likely to be a person who was the VP of Sales, VP of Marketing, or a similar position. One of the most substantial benefits of hiring from within is that that person is more likely to stay within the company long term. Executives who are hired as an external candidate have lower success rates.
However, one of the most significant drawbacks to hiring a full-time CRO is the cost. There is no getting around the fact that a CRO is an executive-level position. If your company is hoping to attract an experienced outside candidate, anticipate investing around $350,000 per year or more, plus the cost of their health care and other perks. Hiring internally tends to be less expensive than doing so from the outside. The whole point of bringing on such an individual is to save and earn more money, not spend a chunk of it before they’ve proven their value.
If you are looking at promoting an existing team member into the CRO role, one of the considerations you’ll need to take into account is that they may not have the breadth of experience the role requires. Internal hires tend to maintain the siloed perspective of their discipline or department. Not having the benefit of working within other industries, companies, or roles might keep them from being able to think outside of the box and strategically in many different areas.
The most successful CROs are cross-functional—having an intrinsic knowledge of how various teams within a company should operate will add value to their ability to strategize and getting oppositional teams to cooperate with each other. The more breadth of experience an external candidate has, you can anticipate your company’s need to sweeten their compensation package to attract them.
Another point of consideration is that internally-promoted CROs may have personal stakes in the company or in individual team members as a result of their previous positions. This could have a negative impact on progress. An internally-promoted CRO can sometimes be too close to a situation and might lack the objectivity to play fair. Externally hired, as-needed CROs typically don’t play politics. When they come into an organization, they are trying to learn the ins and outs of your business, so they tend to listen more and keep an open perspective.
Four Benefits of Hiring a Fractional CRO
Hiring a part-time or fractional CRO can be a great alternative to a full-time hire, regardless if you were considering an internal or external candidate. Blackwood Impact Group recommends that you use an outside firm or consultant, rather than attempting to add CRO duties on a part-time basis to a current team member. You want your CRO focused on the primary task of improving your bottom line.
The first advantage of using a fractional CRO is that you’ll have the benefits of the breadth of their expertise at a fraction of the cost of making a full-time hire. Better still, you can set a time limit for the engagement. You are not forced into a long-term or open-ended commitment that takes a significant bite out of your revenue. Along those lines, the second benefit is you can potentially bring on a fractional CRO for specific projects with marketing, sales, operations, or any other area of your business that requires immediate attention. It would be like getting an industry “heavyweight” without the typical price tag attached to it.
The third benefit of using a fractional CRO is that you can trust they will be giving you their unbiased advice. You will be hiring them to focus on your bottom line. Without having any previous ties or personal stakes to the inner workings of the company, they will give you their honest, professional opinion about the courses of action they believe are in the best interest of the company.
Finally, a fractional CRO will bring the necessary outside perspective that is needed. Better than that, because fractional CROs have worked with a number of other companies before you, they tend to have an array of experiences in a number of industries and verticals. They have an expanded toolbox from which to pull the right solutions for your business challenges. As an outsider, they will be uniquely positioned to spearhead the fresh new ideas your company needs.
If you are contemplating your CRO hiring options, consider placing Blackwood Impact Group on your list. To see if we might be a good fit for your business, CLICK HERE to schedule a no-obligation consultation with one of our consultants.