Early-stage start-ups often find themselves in an all-too familiar bind. To hire or not to hire full-time C-Suite managers? This is not because they do not realise the value such managers would bring to their businesses, but simply because they cannot fit experienced CXOs into their stretched budgets. The result is all too familiar: without the strategic depth, vision, and knowledge that such managers bring to a business, many start-ups wither and die, often taking million-dollar ideas with them.
Outsourcing CXOs has of late emerged as an attractive recourse for such enterprises. In short, by sharing their CXOs with non-competing organizations, these fledgling businesses have gained instant access to C-Suite talent at an affordable cost, helping them unlock the full value of their ventures. And get that elusive competitive edge that often separates the winners from the rest.
The outsourcing route works particularly well in challenging contexts that require businesses to navigate their way through competitive minefields on limited resources. Highly experienced business leaders have the vision to help such ventures maximise their efficiencies and craft winning strategies. The co-hiring model gives young start-ups affordable and flexible access to top-dog talent.
The dilemma for start-up entrepreneurs is stark indeed: on the one hand, they do not have the scale to hire a full-time C-Suite executive; on the other hand, they must still ensure that their ventures are set on solid foundations, built around gold-standard processes and systems. The outsourcing model is designed precisely to support entrepreneurs through such predicaments.
Outsourcing C-Suite talent is a particularly good choice when:
- A venture is in need of a well-defined strategic intervention to address a specific challenge that does not warrant a full-time hire. Often, the engagement in such cases may be for as little as a few weeks on a need-driven basis to guide and charge up a functional team.
- Outsourced CXOs are equally in demand for coaching senior executives within a new venture. These may be directors/senior directors or functional heads. Similarly, they can be roped in to fill a critical open position or for project-based system implementation like ERP.
- A host of domains critical for scaling a start-up requires strategic depth that essentially comes with years of CXO level leadership experience in diverse business settings at large organisations. This ranges from fundraising and debt to equity, IPOs, benefit plans, tax strategies, financial systems, insurance, acquisitions, and compensation strategies. Sure, emerging companies might have executives with some exposure to such areas. However, given that they must compete with large corporations for prized director-level talent, it is unlikely that these executives would be sufficiently equipped to manage such specializations independently. This is a crucial C-level breach that can be filled by outsourced experts—CHROs, CMOs, or CFOs from large corporations.
- There is no doubt that start-ups require an explosive burst of strategic energy to get started. However, for them to sustain their growth momentum, there can be no substitute for building internal skills and capabilities. Startups around the world have discovered that hiring external C-level experts is among the most effective ways to do this. Such a move could empower the entire management team as peers on the executive team (CIO, CEO, CMO, etc.) learn to work more effectively together as a decision-making body.
The startup economy is exploding, with hundreds of new companies being founded every day, creating an unprecedented demand for experienced business leaders. It is mathematically impossible for even a small percentage of new businesses to hire such talent full-time. However, with the emergence of models such as co-hiring, this does not imply that they cannot access such talent when and where they want, at salaries they can afford.
