The Fractional Audit: What Leadership Gaps Should You Fill in 2026?
January is when most companies plan for the year ahead. Budgets are set, goals are finalised, and leadership teams start mapping out their strategies. But many businesses overlook one thing: they plan with the team they have, not the team they actually need.
DDI research shows that 77% of organisations had leadership gaps in 2025. On top of that, 87% of executives say they're facing skill gaps now or expect them soon. Yet less than half have a clear plan to fix it.
This isn't about hiring your way out of trouble with permanent executives you can't afford or don't need full-time. It's about honestly looking at where your leadership falls short and filling those gaps with fractional expertise that delivers results.
The Real Cost of Leadership Gaps
Before you start the audit, it's worth understanding what's actually at stake. Leadership gaps don't just slow you down—they actively work against you.
Recent workforce research shows 45% of employers can't find qualified candidates, and 84% of companies report major skills gaps. Need someone with AI or emerging tech expertise? You're looking at an 89-day hiring timeline on average.
Meanwhile, your competitors aren't sitting around waiting. They're moving forward with the leadership they need—whether that's permanent, fractional, or a mix of both.
The real question isn't whether you have gaps. You do. The question is whether you're willing to call them out honestly and fill them strategically.
The Leadership Audit Framework
This audit covers seven critical areas of leadership. For each one, you'll look at where you are now, spot the gaps, and work out whether fractional leadership makes sense for your business.
1. Strategic Direction & Planning
Questions to ask:
Do you have a documented 12-month strategic plan with measurable milestones?
Can your leadership team clearly explain how daily work connects to your bigger goals?
Are you making decisions based on actual data, or best guesses?
What the gap looks like: Without strategic leadership, you end up reacting to whatever comes up. You're constantly putting out fires instead of building systems that stop them from starting.
When fractional makes sense: If you're growing but can't justify a full-time Chief Strategy Officer or CFO, a fractional executive can build your strategic framework, set up reporting systems, and train your team to keep them running—usually within 90 days.
DDI's 2026 Leadership Trends report found that companies moving to flatter structures need leaders who can think across systems and work cross-functionally, not just climb the ladder.
2. Technology & AI Implementation
Questions to ask:
Do you have an actual AI strategy, or are you just trying things and hoping?
Can your team explain which business problems AI is meant to solve?
Do you have anyone who can objectively evaluate AI tools instead of just chasing the hype?
What the gap looks like: Research from The Adecco Group shows workers are saving about two hours a day using AI tools, but only 25% are getting any formal training on them. The result? All that potential productivity just... disappears instead of turning into real business value.
Even worse: 46% of business leaders say skill gaps are the main thing stopping them from adopting AI, whilst 75% of employees are worried AI is going to make their jobs obsolete.
When fractional makes sense: Unless you're a tech company, you probably don't need a full-time CTO. But you definitely need someone who can look at your current tech, spot real AI opportunities, and implement things that actually deliver ROI. A fractional AI specialist or CTO gives you that expertise without the $250K+ salary.
The World Economic Forum reports that nearly two-thirds of employers say widening skills gaps are their biggest barrier to transformation.
3. Marketing & Revenue Generation
Questions to ask:
Do you know your customer acquisition cost and lifetime value?
Is your marketing bringing in consistent, predictable pipeline?
Can you clearly explain why customers pick you over your competitors?
What the gap looks like: Most businesses know they need marketing, but they don't have the expertise to build systems that consistently bring in revenue. They hire marketers who just execute tactics without strategy, or agencies that give them nice reports but no actual results.
When fractional makes sense: A fractional CMO doesn't just tick boxes—they build the strategy, hire and manage your marketing team or agencies, and set up systems that keep working even after they've scaled back.
4. Financial Planning & Management
Questions to ask:
Can you see your cash flow and runway in real-time?
Can you model out different scenarios—growth, contraction, unexpected expenses?
Do you understand your unit economics well enough to make confident pricing decisions?
What the gap looks like: Growing businesses often stick with a bookkeeper when what they really need is strategic financial leadership. The gap between basic accounting and CFO-level strategy is huge.
When fractional makes sense: Before you're big enough to need a full-time CFO (usually around $10M+ in revenue), a fractional CFO can set up your financial systems, build forecasting models, manage investor relationships, and get you ready for fundraising or acquisition talks.
5. Operations & Process Optimisation
Questions to ask:
Do you have documented processes for your critical business functions?
Could operations keep running smoothly if key people weren't available?
Are you hitting growth pains where adding more people just creates more chaos?
What the gap looks like: Businesses often scale headcount before they scale processes. You end up with expensive, constant chaos that feels busy but delivers less and less.
When fractional makes sense: A fractional COO can look at your current operations, find the bottlenecks, fix processes, and build systems that let you scale efficiently. This is especially valuable during fast growth or when you're preparing for acquisition.
6. People & Culture Development
Questions to ask:
Do you have a documented approach to hiring, onboarding, and developing people?
Can you actually explain your company values and show how they play out in daily work?
Are you losing good people, and do you know why?
What the gap looks like: McKinsey research found only 11% of HR leaders feel they have a strong bench ready to step into leadership roles. Meanwhile, 71% of millennials plan to leave their employer within two years because they're not getting adequate leadership development.
When fractional makes sense: Before you need a full-time CHRO, a fractional HR leader can set up hiring systems, build onboarding frameworks, create development programmes, and tackle culture problems that are hurting performance.
7. Compliance & Risk Management
Questions to ask:
Are you compliant with the relevant regulations in your industry?
Do you have systems to spot and manage business risks?
Would you actually survive an audit or regulatory review?
What the gap looks like: Compliance usually gets ignored until it becomes expensive. By then, you're managing crises instead of preventing them.
When fractional makes sense: Fractional expertise in legal, compliance, or risk management lets you tackle gaps proactively without hiring full-time specialists you don't need year-round.
Making the Build vs Buy Decision
Once you've spotted your gaps, you've got a big decision to make: which capabilities should you develop internally, and which need external expertise?
Horton International's 2026 Leadership Pipeline research says this decision comes down to three things:
Urgency: How fast do you need this working? Internal capacity: Can your existing team learn this, or do you need proven expertise right now? Strategic importance: Is this something core you need to own, or just a gap you need to fill?
For most growing businesses, it's not either/or. You need permanent leadership for core functions and fractional leadership for specialised expertise, transformation projects, or capabilities you're not ready to build in-house yet.
What Happens After the Audit
Spotting gaps means nothing if you don't do anything about them. Once you've finished your audit, prioritise based on:
Business impact: Which gap is costing you the most in lost revenue or operational waste?
Risk exposure: Which gap creates the biggest regulatory, financial, or reputation risk?
Strategic alignment: Which gap, if you filled it, would speed up your progress toward 2026 goals?
The businesses that win in 2026 won't be the ones with the biggest budgets. They'll be the ones that spotted their leadership gaps early, filled them strategically with the right mix of permanent and fractional expertise, and built systems that deliver full-time results without full-time costs.
Your Next Step
If this audit showed you gaps you can't ignore, it's time to fill them. Hire fractional executives who can step in immediately and deliver the expertise you need without the full-time commitment. The businesses making real progress aren't waiting for perfect circumstances or unlimited budgets—they're getting matched with vetted talent that actually works for growing companies. Ready to close your leadership gaps? Start here.
