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The Hosts

Chip Griffin is the founder of the Small Agency Growth Alliance (SAGA) where he helps PR & marketing agencies grow and thrive. He brings more than two decades of experience as an agency executive and entrepreneur. He shares the wisdom of his success and lessons of his failures. Follow him on Twitter at @ChipGriffin.

 

Gini Dietrich is the founder and CEO of Arment Dietrich, an integrated marketing communications firm. She is the author of Spin Sucks, the lead blogger at Spin Sucks, and the host of Spin Sucks the podcast. She also is co-author of Marketing in the Round and co-host of Inside PR. Follow her on Twitter at @GiniDietrich.

Recent Episodes

Fractional C-level help for agencies

Does your agency need a fractional CFO, COO, or head of HR?

That’s the question that Chip and Gini explore in this week’s episode — along with follow-up questions of what to look for in these outside advisors.

These fractional roles have become popular positioning tactics, including for agencies themselves who may position their offering as a Fractional CMO service. But is it more than marketing-speak? And what is the right way to get the help that you need as an agency leader?

Key takeaways

  • Chip Griffin: “Don’t fall for the marketing spiel, focus on what your actual needs are first and then figure out how you get there.”
  • Gini Dietrich: “HR is the one place that we all tend to sort of wing it, but it’s probably the place you need the most help.”
  • Chip Griffin: “You need to know what fits for you, because if you don’t enjoy the conversations that you’re having with these outside advisors, you’re not going to have them. You’re going to avoid them.”
  • Gini Dietrich: “Even if you have a long term relationship with somebody and they’re giving you bad advice, or they’re not helping you grow in the way that you want to grow, find somebody who will.”

The following is a computer-generated transcript. Please listen to the audio to confirm accuracy.

Chip Griffin: Hello, and welcome to another episode of the Agency Leadership Podcast. I’m Chip Griffin,

Gini Dietrich: I’m Gini Dietrich.

Chip Griffin: And I am the fractional host of today’s show, which we’ll talk about more right after this,

Gini Dietrich: The fractional host?

Chip Griffin: Fractional host. I do not need to put in a, a full week of effort for this show. I’m just gonna put in about 30 minutes effort.

Gini Dietrich: So what does that call me? Semi fractional? Part time fractional?

Chip Griffin: You put in the same amount of effort as I do, which is…

Gini Dietrich: Oh, you put – well, I guess Jen, Jen puts in more effort than the both of us. Probably.

Chip Griffin: Yes, we, we have shifted that. So I do almost none of the post production. All I gotta really gotta do is hit record here and start yapping. So that comes easily to me.

Gini Dietrich: That does come easily to you.

Chip Griffin: Yeah, so, but we’re not gonna talk about that, but we are gonna talk about fractional help for your agency, because this is a popular topic, particularly fractional CFOs, but I’ve also seen fractional COOs, fractional heads of HR, fractional…

Gini Dietrich: CMO.

Chip Griffin: Yeah. Most agencies wouldn’t hire a fractional CMO, although sometimes the agencies themselves become fractional CMOs for other people. So it, it is a two way street, but we’re gonna focus for on those fractional roles that help the agencies as they grow. So are they a good idea? When should you think about them?

What should you look for if you do just anything related to it? So where would you like to start Gini?

Gini Dietrich: You know, this, this is gonna come as a big surprise, but it depends.

Chip Griffin: I, I mean, I really think we should just record it depends. And just end every show that way.

Gini Dietrich: Just, just do that every week.

Chip Griffin: Every week. Send out here’s the title.

Here’s the question. Depends. It depends. End.

Gini Dietrich: Love it.

Chip Griffin: Sign off.

Gini Dietrich: It’d be a lot easier than working.

Chip Griffin: Yeah. People probably wouldn’t listen to that, so.

Gini Dietrich: Probably wouldn’t download it.

Chip Griffin: So what does it depend upon?

Gini Dietrich: Yeah, it does. It really, it truly does depend. And it depends on size of agency, the scope of work, all those kinds of things.

So. When we’re looking at external help for things like HR and accounting and things like that, we look at what kinds of things need to, to happen. And at the size that my agency is, which is still pretty small, you don’t need a full fractional CFO. We need, we need a bookkeeper for sure. And we need somebody to help with invoicing and bill paying and all those kinds of things.

But we look at it and we say, okay, a fractional CFO tends to be a little more strategic. Just like you would be a little more strategic if you went into a client’s business, your team may be, may go in and do some of the tactical work, but you would be more, more strategic. And so we look at the fractional help as do we need help with things like tax planning or, you know, growing into a vision or things like that, and may hire somebody for that purpose.

But that’s usually project work and not a full fractional person.

Chip Griffin: And, and I think that’s a great point because the, you know, look – the whole term “fractional” is really more of a marketing term. There’s no, there’s no specific structure around what it means to anybody. And, it’s just become a popular term of art.

As people have thought more about productizing their services, in the professional services world, whether you’re an agency or otherwise. So people like to, to just use these labels, but, but what does it mean? I mean, I’ve seen fractional CFOs who are one or two days a week. I’ve seen fractional CFOs who are really nothing more than just general accounting advisors for a business. So starting with, as you say, what you need, understand what it is that you’re looking for in terms of help and start there. Don’t fall for the marketing spiel, focus on what your actual needs are first and then figure out how you get there.

Gini Dietrich: Yeah. I think that’s really, really sound advice because most of us are not at a level where we would need a CFO even two days a week. I’m certainly not, you know, I think you probably have to get to 50 or 60 employees before you start to look at something like that. But you, there will be needs that you have, like you, there’s no way I’m gonna be doing the bookkeeping.

You do not want me doing that. No one wants me doing that. I’m not gonna do the invoicing. I’m not gonna be paying the bills. Like those are kinds of things that we can outsource for sure. But doing that to a CFO. It’s too, in most cases it’s too sophisticated, I would say.

Chip Griffin: Absolutely. And, and, and I think you’re right. I mean, it’s at a bare minimum you need, you know, 50 or 60 employees before you’re thinking about needing any kind of a CFO role full or part-time typically. I mean, obviously it depends on the specific nature of your business and exactly how you’re structured, but the vast majority of people who are listening to this, you know, have agencies of a size that you don’t really need that. You need good, solid bookkeeping. You need good solid accounting advice. You need good solid tax advice. And if you’ve got those things you’re probably in decent shape. Unless you’re doing a lot of exotic multinational work that requires currency transfers, you know, where you’re, where you’ve got a business, that’s got a lot of, you know, debt or equity issues going on, which the vast majority of you don’t and shouldn’t.

Gini Dietrich: Right. right.

Chip Griffin: Then, you know, just, just those basics are probably sufficient. So if you figure out what those needs are, you’re not going to overreach in terms of what you’re asking for, and that means you’re not gonna overpay for what you’re getting.

Gini Dietrich: Yeah. And I would say that that goes the same for HR. It goes the same for legal advice.

Like everything that you would outsource to help you run the business, same, same sort of set of standards. Like really think about what it is that you need. I would say HR is probably one that’s a little bit different because you may need somebody a little more – excuse me – a little more strategic for things like onboarding or firing, or you can just hire Chip to do that for you, which is what I would do.

But you may need somebody a little more strategic on the HR side of things. But that’s the whole point is kind of figure out what it is that you need and what the standards are, and then fill the role appropriately that way.

Chip Griffin: Yeah. And I think HR is the area where agencies fail to invest most often.

Yeah. And it, and it’s where they should be thinking about hiring outside help sooner rather than later, to help them make sure that they’re doing things correctly because your risks on the HR side can be fairly substantial, not just in legal and regulatory terms, which absolutely can be there. But in terms of the success of your agency, because if you don’t have the right policies and practices in place from an HR standpoint, you may have higher turnover than you might otherwise, if you were running things properly.

So, you know, I think most of us immediately say, oh, we need a bookkeeper of some sort, right? Cause we hit that point we’re tired of doing the data entry and QuickBooks or sales. Somebody else needs to do this. Please do this. Somebody else needs to write the checks or send the transfers or whatever, pay the bills.

We, you know, most of us don’t want to do our own tax returns. So we’re like, absolutely, we’re gonna hire someone to do that. But I think HR is, is an area where people wing it far too often. And particularly with agencies having a lot more contractors, having a lot more remote employees, having a lot more remote employees who are in different states.

Yeah. These are all things that an HR advisor can help you with. You don’t need a fulltime hR person in house for quite a while. If you’re listening to this, I venture to guess you do not need and should not hire a full-time HR person in house. Because if you do, they’re probably not expert enough to really help you in the way that you need it.

But you should absolutely be looking for that help from the outside, because that’s, that’s an area where it can make a big difference because we are basically all talent houses, right. That’s what agencies are. We, we house talent. We sell that talent’s time to our clients and we can pretend we don’t, but that’s what we do.

Gini Dietrich: Yeah, for sure. And I will say from an HR perspective, you know, not just the policies and procedures, but helping you with career pathing. Helping you understand what the right salaries are like the, the salary brackets. New York just passed a law about salary transparency. I wouldn’t have known that. I’m not in New York. Had my HR consultant not said we’ve gotta be paying attention to this because we have two people who live in New York. So we are, we’re having to, to, she helped us go through and create the band, the salary bands and make sure that they were transparent and that everybody knows what they are. And same goes with, you know, contractors or employees that you have in California.

Their laws are completely different, so they help you with those kinds of things as well. So I totally, 100% agree with you that HR is, is the one place that we all tend to sort of be like, eh, we can kind of wing it, but it’s probably the place you need the most help.

Chip Griffin: Yeah. And, and helping you to understand how do you set up a path so that, or a, a proper conversation about someone’s career path, how do you make sure that you’re having the right one-on-one conversations?

How do you make sure that you’re, you’re doing your reviews effectively, your compensation, and bonus plans effectively. All of that really can benefit from someone who is an expert, particularly because there are so many of these things that are cropping up. And understanding, you know, what can, can you, and can you not ask in interviews these days?

Because along the lines of, Hey, there are some states that now prohibit you from asking someone’s salary history. Yep. Yep. And, and so you need to know that because if you were in one of the states that says you can’t ask about salary, Don’t ask about salary, right? Who can tell you that best? An HR advisor who actually gets updates, because they have these, these software and reporting tools that let them know, Hey, there’s this new regulation in this state.

They’re on top of that. You’re not. You shouldn’t try to be. You should hire someone who knows what they’re doing instead.

Gini Dietrich: And I would say on that point as well, there are the younger generation is very attuned to what’s happening around them. And I would say you know, my generation, we just sort of put up with it and this generation does not put up with it.

And I hear things like, oh, I was with a client and, and there were microaggressions or they were misogynistic, or I got gaslighted. I’ve never had to deal with this in my career. So I say to my HR consultant all the time, help! And she always knows exactly what to do, like how to sort of… how to investigate it, to make sure that, that, you know, the claim is true.

And then what to do both with the client and with the team member to make sure that it doesn’t happen again and then smooth over, or in some cases help us fire the client or the team member, but that’s never happened. It could, but hasn’t yet, but to help us figure that out and what’s the plan and what’s the path and how do you do those kinds of things?

Because like I said, my generation you just sort of were like, keep, keep it over there and you kind of just ignored it. And this generation does not, they don’t. They don’t ignore it. You don’t get to behave that way.

Chip Griffin: They don’t ignore it. And increasingly, you know, government agencies don’t ignore these things either whether it’s from the HR side or the tax side or all of these things. And so making sure that you’re getting the right outside help for you is, is important. Whether that’s someone who’s fractional officially or someone who you just are, are buying part of their time, in order to get done what needs to be done.

Right. But I think one of the key things here is whether you’re hiring someone to, to help you with your taxes or your bookkeeping or your HR, you need to find someone who’s a good match for you. Yes. And by that, I mean, someone who has the expertise in what you do. So hiring someone to do your taxes, who has never worked for an agency or professional services firm doesn’t make any sense at all.

You don’t wanna hire someone who’s used to doing brick and mortar retail stores, right? Because the issues are entirely different and the odds that they steer you wrong inadvertently are too high. Same on the HR side, you wanna hire someone who has experience in professional services generally, but preferably agencies themselves.

Because the issues that we face are a little bit different and understanding how to navigate those waters is important. But you also need someone who adopts your philosophy of how to handle these issues. There are tax advisors out there, there are fractional CFOs out there who are extremely aggressive in their strategies.

Yep. That’s fine, if you are extremely aggressive in your own outlook on how you want to do things and you know, how close to the edge you wanna play, or whether you want to go over the edge a little bit, you know. HR, really important, you need to find someone who shares your general philosophy for how to manage talent, because there are all sorts of different HR advisors out there.

There are all sorts of HR personnel out there. I’ve worked with a lot of in-house HR folks over the years. Some of them you cannot carry on a conversation with, and that bugs me. Others, you can. So you need to know what fits for you, because if you don’t enjoy the conversations that you’re having with the other, these outside advisors, that’s, you’re not gonna have them. You’re gonna avoid them.

Gini Dietrich: You’re going to avoid them.

Chip Griffin: And guess what? Outside advisors can only help you if you talk to them. You have to trust them too, because you’re gonna share all sorts of dirty laundry with them basically, right? Yeah, because you have to tell ’em, this is, this is the good, the bad and ugly, because if you don’t, they can’t give you accurate advice.

Gini Dietrich: Right. Yeah. I, 100%. And I think this goes for us working with clients as well. If you don’t enjoy the people that you’re going to work with, you will avoid those conversations. I avoid the financial conversations like the plague. The only reason I show up is because I love our accountant.

He is phenomenal and he’s fun to be around and it’s fun to talk to him. And that’s the only reason I show up. If I didn’t like him, I would 100% avoid those conversations every single time.

Chip Griffin: Right. And I, and I think it’s important to build long term relationships with these folks too. So you don’t go out and hire someone with the idea that you’re gonna solve a short term problem.

Right. And then be done, right. Because all of these relationships end up improving with time because they get to know you, they get to know your firm better. And so that means, first of all, you can have shorter conversations. I think I’ve shared in the past that I’ve used the same corporate lawyer for 20 some years.

And so most of our conversations go very quickly because we understand each other. And so we’re just, you know, we’re just picking up on one particular detail that we need to address. So that, that means that I’m getting better advice. It also means, frankly, it’s cheaper. Because the lawyers you pay by the hour.

So the shorter, the conversation could be the better, the better off it is for you. Yeah. And so you want to be thinking about that when you’re hiring this outside help, whether they call themselves fractional or not, that you’re really looking to build a personal, ongoing relationship with that help. And that, that goes for whether you’re a firm of two and you’re hiring a bookkeeper or you’re a firm of, of 20 or 200 and hiring larger, you know, partial or fractional assistance.

Gini Dietrich: Yeah. And I will say speaking to your, your lawyer comment, and also the idea that you have to find people that are in the same boat as you. I had the same lawyer forever. And when we went remote before it was the hip thing to do, he was like, you can’t do this. You can’t have contractors.

You can’t have remote employees. You can’t, you can’t, you can’t. And I was like,ok, I’m gonna find somebody who says I can. And I did. And you know, a 15 year relationship went down the, the drain because he kept telling me no. And I knew that that wasn’t the case. I knew that wasn’t – maybe we couldn’t do it in the way that I was thinking about it.

I knew that we could do it and he would not help me do it. So even if you have a long term relationship with somebody and they’re giving you bad advice, or they’re not helping you grow in the way that you, you want to grow, find somebody who will.

Chip Griffin: Well, I think that’s a, that’s a good point too, because your, your needs are going to change over time. In your case, because you change your overall strategy for the business.

But sometimes it changes because you’re growing. Sometimes it changes because external forces have changed. And so, you know, rather than setting out and saying, Hey, I need a, a fractional CFO, work with what you’ve got. And as you outgrow it, for whatever reason, then try to figure out, okay, let me do a reassessment.

What am I missing? What do I not have that I need? How can I get that from whoever I’m working with now? Or do I need to be looking for either another solution or an additional solution. Do I need to replace this person? Do I need to just supplement it? Right? Because if you started with just a bookkeeper, as many do, and maybe you’ve got a tax accountant, but do you need, do you need some sort of accounting strategist?

And is that someone who replaces those two other roles and you, you consolidate it or is it a third person that you bring into the mix and there’s arguments for both. It really depends on what stage you’re at, what your particular needs are and, and frankly, what your budget is because some of these things can get expensive, depending on what you’re looking for.

Gini Dietrich: So we just came back to it depends

Chip Griffin: It always does. But, but our goal is to tell you, not just it depends, but what are the things that you should be thinking about? Yeah, yeah. Yeah. So that you can figure out what it depends upon and what path it might lead you down. I think to me, the key thing is just, you know, don’t get bamboozled by the titles. Because it… I mean and fractional, CFO is probably the most popular one these days, but I have seen fractional CFOs who are really just glorified bookkeepers. And I’ve seen fractional CFOs who are truly like legit, larger company CFOs who are just selling you portions of their time. And there’s a, there’s a big gap between those two.

And so understanding what you’re looking for is much more important than falling in love with the title, which can be easy to do, because that’s what marketing’s all about. It’s making you fall in love with the idea. So you’ll spend your money.

Gini Dietrich: I am the best, the best customer of really good marketing, the best.

Chip Griffin: I, I mean, really good marketing. Everybody’s a good customer. That’s why it’s really good.

Gini Dietrich: I’m the best. My husband makes fun of me all the time. He’s like, you know, they’re just marketing and I’m like, I know, but I really appreciate how well they’re doing it.

Chip Griffin: You must have been great during the, the years of the infomercials and all that kind of stuff.

Gini Dietrich: Oh yeah. Let me buy. ’em all.

Chip Griffin: Buy ’em all. Can’t sleep tonight. So I’m just gonna buy all these crazy things.

Gini Dietrich: Now I just go, now I just scroll through Instagram. It’s the same thing. Oh, yes. I need that. There’s a thing that you put on your neck that you rub your neck, get rid of your tension headaches. Definitely need that for sure. Yeah. Yeah. Wouldn’t have found it without Instagram.

Chip Griffin: That’s great.

Gini Dietrich: Best customer. Best.

Chip Griffin: On that note I think we’re gonna bring this episode to a close because we’re flying right off the rails. So bottom line fractional or not: maybe, maybe not. It depends. Your mileage may vary. We’re not lawyers, accountants, HR, people, any disclaimer we can think of.

So hopefully we’ve given you something to think about though, as you are thinking about the outside advisors that your agency needs to be more successful. And so with that, I’m Chip Griffin,

Gini Dietrich: I’m Gini Dietrich.

Chip Griffin: And it does depend.

Gini Dietrich: It does depend.

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