When it comes to finding and selecting the right sort of talent to lead portfolio companies, often private equity firms and in-house hiring teams will focus heavily on past experience and over-index on career trajectory. While this is an important part of a candidate’s background, there are many other skill sets and attributes that make a leader a great fit for a portfolio company - beyond experience at a Fortune 100. In order to successfully lead a portfolio company in private equity, CEOS will need grit, self-awareness, ambition and above all confidence.
Grit, Risk & Disruption
The typical public company CEO does not rely heavily on risky or disruptive behavior. To lead a portfolio company, successful leaders will need to have grit and higher resilience to achieve results and drive performance. These types of leaders deliver results quickly, which means that they are able to understand and prioritize what success looks like for both customers and stakeholders and unify the team around these goals. Additionally, a leader who has grit is able to inspire those around them and embody the company culture of these aspirations around disruption, risk, and reward.
Self-Awareness & Passion
Until only recently in the last several years public company CEOs have not been challenged to utilize their EQ when managing. Strong portfolio company leaders value EQ and IQ equally when it comes to empathy and feedback. Self-awareness and acceptance of feedback are critical, and these types of leaders are more open to coaching and exhibit more empathy to team members and customers. These types of leaders that are more self-aware, often make the intentional move into leadership roles within private equity and choose to work for a portfolio company that aligns with their passion. Their passion for the company, product or team enables these leaders to invest more emotionally in the outcomes and deliver results in a more impactful way.
Ambition For Growth
To successfully lead within a portfolio company leaders must be driven by growth and action, while public company CEOs are typically more concerned with maintaining the strategic course of direction without focusing heavily on growth. Strong leaders in portfolio companies and in private equity will own the strategy around growth and focus on achieving these targets. This means portfolio company leaders will need to have the tenacity and ambition to achieve and maintain growth at a rapid pace. Since portfolio companies often scale incredibly fast, private equity firms will need the right leadership in place that possesses the ambition to grow but also the energy and passion to keep pace with this growth.
Confidence & Influence
Since portfolio companies require a leader who can scale at pace while maintaining a growth mindset, confidence and influence are critical. These leaders need to communicate in a more pervasive and direct way than their public company CEO counterparts in order to effectively manage relationships and achieve results. Their confidence in the way they lead, communicate and manage will often transcend to their influence across their relationships both internally and externally to achieve support and stakeholder buy-in.
Portfolio companies require different leadership styles than most public companies. While public company CEOs can drive results and achieve success, the environment and methods in which they reach these goals are very different than achieving the same results in a portfolio company.
About The Author
With over 10 years of experience in search and business operations, Julian is a highly diligent and efficient marketer and operations manager. He is a proven leader who combines creative thinking and strong communications with operational strategy, business development, recruitment operations, and digital marketing. Julian joined Chapel Hill Solutions to modernize the recruitment industry’s approach. He is passionate about creating a transparent and collaborative relationship with his clients.