Fractional Jets and Fractional Management
By Charles Besondy
I was with several well-to-do entrepreneurs and investors last month when the conversation turned to fractional jet ownership. These individuals traveled frequently and were bemoaning the time they wasted at airport security checks, the lack of convenient flight schedules, and of course the “joys” of traveling with the general public.
They admitted an interest in the concept of fractional jet ownership. This is the concept made popular by companies such as NetJets where you purchase a fraction of a business jet—actually a number of flight hours per year—for a flat fee. The jet is made available when you want it and where you want it. For that flight it’s all yours. You have all the benefits of a private business jet for your travels, plus you know exactly how much it’s going to cost. You have no worries about maintenance, fuel costs, insurance, hangar rental, or pilot scheduling. As a bonus, you avoid all the check-in hassles of the public terminals, and you can take on board as many liquids and nail cutters as you can hold.
I enjoyed this conversation of the rich and famous for a while, but soon my mind switched to my favorite business topic, interim management. While these wealthy individuals were talking about Cessna, Citation, and Gulfstream jets, I saw similarities in interim management, or a term I just coined, “fractional management.”
Using Fractional Management for your company’s marketing functions you can arrange to have a senior marketing executive on board for a set number of weeks, or months in a year. You can get exactly the set of skills and domain experience that you need, but you’re not saddled with the high price of “ownership.”
Like the fractional jet, the fractional manager is there when you need him/her. You know exactly what the fractional manager is going to cost you. You’re saving about 25% on benefits, and another 30% on recruitment fees. Stock options and club memberships? Forget about it.
I see many companies who believe they are trapped in a no-man’s land. They desperately need senior marketing talent, but they can’t afford that level of person. So, they comprise on someone they can afford. Generally a year later they’re back looking again because “it didn’t work out.”
The companies should have evaluated the option of fractional management. For example, let’s say the market-based salary for the level of marketer a company needs is $150,000 a year, plus benefits ($180K total for sake of this example), but their budget can only handle $100,000. What they should have done was sign on a fractional manager for the marketing function. Negotiate a contract paying the fractional manager $100,000 for, say, seven months over a year’s time. They’ll have the skills, process knowledge, and domain knowledge they need, without blowing out their budget.
Fractional jets are easily justified by many executives; likewise, fractional managers are an attractive option for many companies large and small.