Making the Leap from Corporate Leader to PE-Backed CEO

Private-equity firms have long favored CEOs with prior experience at portfolio companies, but talent shortages and the rapid expansion of PE ownership are pushing investors to recruit more leaders from the corporate world. Not all make the transition successfully. Leading a PE-backed firm requires five capabilities: a practical commercial orientation, the ability to tackle strategy under pressure, the ability to wield influence widely to achieve impact, a willingness to take risk (especially on talent), and a broad interpersonal range. Unlike most corporations, PE firms demand immediate value creation, lean execution, and direct, high-candor engagement with investors and boards. Rigorous assessment of candidates’ ability to deliver those things—and honest evaluation of their motivation and readiness—can help portfolio companies increase the odds of finding CEOs who are a good fit.

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