What does a successful CEO with a private equity background look like?

For many years, recruitment decisions in the private equity (PE) industry have been shaped by a widespread belief: if you are unsure who to hire to lead a portfolio company, pick someone with prior experience as a CEO of a PE-backed enterprise. But times are changing. Today, facing talent shortages, more ambitious value creation plans, and increasingly complex transformation tasks, private equity firms are breaking away from this inherent pattern to seek a broader pool of talent options.

At ghSmart, a leadership consulting firm, we have witnessed this shift firsthand. In recent years, our PE clients have increasingly recruited leaders from the C-suite of established corporations, while more corporate executives are also starting to view joining a PE-backed enterprise as a powerful path to their first CEO position. The driving force behind this trend is the rapid growth in the number of PE-backed enterprises, and the resulting supply-demand imbalance for CEO talent with relevant experience. According to data from Citizens Bank, the number of PE-backed enterprises in the U.S. has risen by more than 400% over the past 25 years, while the number of listed companies has dropped by roughly 35%. Our own data confirms this trend: between 2024 and 2025, 53% of the high-performing candidates we assessed who were taking on a CEO role at a PE-backed enterprise for the first time had previously been C-level executives or business division leaders at established corporations. This shows that the corporate executive pipeline has become a critical source of talent to meet the growing talent demand of private equity firms.

Obviously, not all outstanding corporate executives are qualified for the CEO role at a PE-backed enterprise. So what are the key factors that determine success or failure?

To answer this question, we analyzed proprietary assessment data from 491 executives over the past five years, including 241 CEOs of PE-backed enterprises and 250 corporate C-level executives. We evaluated the differences between these two groups of managers across 18 leadership traits, reviewed 83 assessment records of corporate executives who later became CEOs of PE-backed enterprises, and conducted more than a dozen interviews with CEOs and investors. Through this research, we identified five core competencies that leaders must possess, which serve as key indicators to predict their success. This article discusses each of these competencies in detail.

Five Core Competencies

The five core competencies we put forward reflect the specific operational and management requirements in the private equity space. Compared with mature enterprises, PE-backed enterprises have more limited resources and adopt a direct, strict accountability mechanism. Instead of simply checking whether candidates have prior work experience at a PE-backed enterprise, these five competencies provide a more reliable and practical set of criteria to assess whether a candidate can successfully lead a PE-backed enterprise. While very few people excel in all five areas, the more comprehensive a leader's capabilities are, the higher the likelihood that they will succeed in a PE-backed enterprise.

Results-oriented business acumen. Executives at mature enterprises are often adept at long-term planning, but CEOs of PE-backed enterprises face urgent pressure to translate strategies into value creation. Successful leaders clearly understand what drives tangible outcomes, and can rapidly adjust the enterprise's direction based on the latest data. Our research shows that compared with C-level executives at mature enterprises, CEOs of PE-backed enterprises are skilled at leveraging various levers to drive revenue growth, making them 17% more likely to deliver outstanding performance at the revenue level.

Robert Hanson, who has served as CEO of PE-backed enterprises twice, told us: "When you enter the private equity space, the biggest shift is that you must believe the core of all work is the value creation plan, not pleasing stakeholders." From the first day in the role, the CEO must not only take on financial oversight responsibilities, but also exercise proactive business leadership. "If you are an expert in a specific business area of a traditional enterprise," Hanson explains, "after you join a PE-backed enterprise, your responsibilities go far beyond managing the annual budget. You should also continuously drive strategic growth, improve profit margins, and create value for this business area."

Ability to develop and implement strategies under pressure. Corporate executives usually have a long planning cycle to formulate strategies, which requires going through layers of governance procedures and reaching consensus with numerous stakeholders. In contrast, CEOs of PE-backed enterprises are constantly under time pressure. "In the private equity space, you cannot succeed if you only formulate strategies from a distance," one of the CEOs told us, "You must get fully involved and translate the strategic direction into practical actions." Our analysis found that CEOs of PE-backed enterprises are 20% more likely to prioritize strategic thinking than C-level executives at mature enterprises. For leaders transitioning to PE-backed enterprises, the absence of constraints from quarterly revenue pressure and the need to secure broad consensus for every decision often makes the environment feel more liberating. Jesper Nordengaard, former President of Colgate-Palmolive North America and later CEO of a PE-backed enterprise, told us: "In the private equity space, after you make a decision, the next meeting will discuss how to implement that decision."

Ability to broadly influence others and drive the delivery of results. In large mature enterprises, leaders can often rely on established teams, sound infrastructure, and existing influence channels to deliver results. However, when leaders join a PE-backed enterprise, the connections and credibility they have accumulated over years in the traditional corporate hierarchy no longer carry the same weight. Facing new shareholders and board members, a newly formulated strategy, and their limited authority, leaders must know how to quickly win the trust of stakeholders. As one CEO of a PE-backed enterprise put it: "In effect, you are almost starting from scratch."

Facing a wide range of stakeholders, from direct subordinates to employees across the entire organization, and to board members, CEOs of PE-backed enterprises usually need to influence them directly or indirectly to align all parties and further drive execution. They must systematically mobilize the organization in a strong yet prudent manner to speed up decision-making and deliver tangible results. This means they need to invest a lot of time working on the front lines of the business, hold one-on-one communications with managers at all levels, and maintain active interactions with their teams and frontline employees. New CEOs must stay close to the business, verify assumptions, remove obstacles, and consciously delegate performance responsibilities down the hierarchy and across the organization. Eric Jungbluth, who has led multiple PE-backed enterprises and held leadership positions at three listed companies, told us that the most critical point for a CEO is "the ability to drive execution through other people."

Willingness to take risks. Our research found that CEOs of PE-backed enterprises are 12% more likely to get high scores in risk taking than C-level executives at mature enterprises. Leaders who perform well in PE-backed enterprises do not wait until everyone reaches a consensus or they have perfect information before taking action. They make selective bets, quickly make trade-offs, and willingly take corresponding consequences. Leaders who take the initiative to assume responsibilities for disruptive changes or transformation at mature enterprises are often already accustomed to taking significant risks in highly uncertain environments.

Take staffing decisions as an example. At mature enterprises, it often takes months to hire an executive and get them up to speed. But private equity firms require CEOs to quickly judge which people can deliver the value creation plan and which cannot. These decisions carry higher risks, as there is less time to deliver the value creation plan and less room for error in recruitment decisions. CEOs of PE-backed enterprises must lock in functional experts with rich experience who can get up to speed quickly and require almost no adaptation period. At the same time, they must take risks prudently and select leaders who have the ability to lead the enterprise to the next stage of development, even if the exact capabilities the enterprise will need in the future are not yet clear. As Maggie van de Griend, Managing Director for Talent Management at portfolio companies of Warburg Pincus, said: "In the private equity space, talent recruitment should be oriented toward the enterprise's development goals two years from now, not its current needs."

Interpersonal competence. Mature enterprises usually require people to behave appropriately, be familiar with the rules of the organizational hierarchy, and communicate prudently. In contrast, the PE environment places more emphasis on clear, candid communication and the ability to collaborate efficiently with different people. In this environment, leaders need to quickly gain insight into the motivations of others, understand the impact of their own leadership style and decisions on others, and adjust their management approaches for different stakeholders to motivate the team and effectively resolve conflicts when they arise. Multiple CEOs of PE-backed enterprises we interviewed specifically emphasized that building a solid working relationship with investors and the board requires frequent, informal, candid and natural interactions. They generally consider this to be one of the most notable differences between PE-backed enterprises and mature enterprises, where interactions with the board are often more formal, periodic, and carefully prepared.

Greg Gartland, former Chief Product Officer of S&P Global Market Intelligence and later CEO of 3E (a PE-backed company that provides data-driven intelligent compliance solutions for the environment, health, safety and sustainability sectors), felt this difference particularly acutely. He said: "In my three years working at S&P, I attended almost every board meeting, but only for specific agenda items and for a short time. At a PE-backed enterprise, I talk to the board on the phone every day."

Signs of a Successful Transition

Take Lisa Utzschneider as an example. Her transition from a corporate C-level executive to CEO of a PE-backed enterprise highlights three key factors for a successful transition: results-oriented business acumen, the ability to broadly influence others and drive the delivery of results, and interpersonal competence.

Utzschneider worked as an executive at Microsoft and Amazon for more than 20 years. She later served as Chief Revenue Officer at Yahoo, helping the company stabilize its business and playing a key role in Yahoo's acquisition by Verizon. After successfully delivering complex business restructuring and M&A transactions, she was eager to take on new challenges, so she took the position of CEO at Integral Ad Science (IAS), a company controlled by private equity institutions.

After taking charge of the company, Utzschneider quickly demonstrated the capabilities she honed in previous management roles, including strong operational capabilities and rigorous business acumen. She told us: "My experience at Amazon and Yahoo laid a great foundation for me to serve as CEO of a PE-backed enterprise." From her first day in the role, she focused on driving value creation, quickly made pragmatic decisions, and built a highly candid, mutually trusting relationship with investors. Her ability to treat investors as genuine partners allowed her to quickly win their trust and advance work rapidly and transparently.

To boost team motivation and directly align business goals, Utzschneider repeatedly emphasized "big rocks" at weekly meetings, referring to the company's most critical priorities. These priorities are relevant to every member of the C-level executive team, and closely linked to the strategic pillars of IAS's value creation plan. At the same time, she leveraged the CEO network of the private equity firm to seek advice. She recalled: "If I had never hired a CTO before, I would reach out to CEOs who had that experience. If someone had completed seven M&A deals within two years, I would connect with them and ask exactly how they did it." Utzschneider made full use of the resources and existing methodologies in the PE ecosystem. Compared with working alone, leveraging the ecosystem allowed her to act faster, influence the organization on a broader scale, and drive more results.

Under her leadership, IAS achieved significant growth and successfully went public. Looking back on her successful experience, Utzschneider told us: "In the private equity space, success is determined by return on investment, investment logic, and exit expectations. This is essentially a transaction, and clarifying your role is the key to building trust, empowering the team, improving speed and creating value."

Ken Gayer is a leader who grew up in the traditional corporate system and has served as CEO of multiple PE-backed enterprises. His experience illustrates how leaders can achieve success with interpersonal competence and results-oriented business acumen. Before joining a PE-backed enterprise, Gayer worked at Honeywell for 15 years, eventually serving as President of Honeywell's Specialty Products division. Earlier in his career, he served as a Lieutenant in the U.S. Navy's nuclear submarine force, an environment characterized by precise execution, strict hierarchy, and clear boundaries. He also worked as a project manager at McKinsey, further refining his problem-solving and communication skills. These experiences made him a highly disciplined executor and an efficient "corporate warrior", but also reinforced his perceptions of traditional workplace relationships, such as maintaining appropriate distance, following the organizational hierarchy, and adhering to formal norms.

However, from his first role at a PE-backed enterprise, he began to question these norms. When Gayer took over as CEO, the company's founder still served as CTO and remained the spiritual pillar of the company. This arrangement required Gayer to respect the founder and the company's legacy, while also addressing the company's needs for professional development and growth. With his results-oriented business acumen, he delivered several key achievements in the early stage. He successfully translated the founder's vision into a practical, economically oriented plan, such as driving growth through acquisitions. Speaking of this, he said: "I am good at analyzing problems and presenting them in a way that is easy for private equity investors to understand, so they can readily say 'this is feasible, we can help with this'."

Gayer found that many interpersonal norms that worked well when he was a corporate executive were counterproductive in PE-backed enterprises. He told us: "In traditional enterprises, once you go beyond your direct supervisor, higher-level managers often seem unreachable. There is usually a mindset that avoids building personal connections." But in the private equity space, the opposite is true. Successful leaders must maintain visibility, approachability, and direct engagement at all levels of the organization. So Gayer took the initiative to make changes. When working at one portfolio company, he found that it lacked basic configurations that were common in large enterprises, such as technical systems to support online meetings and standardized non-disclosure agreement templates. Faced with these problems, he did not wait for others to prepare the required conditions for him. Instead, he adopted what he calls a "zero-to-infinity" mindset, proactively intervened to resolve issues, and established corresponding operational mechanisms to allow others to advance work faster.

The experiences of Utzschneider and Gayer both confirm a common pattern we found in our research: leaders who succeed in the private equity space are often able to translate business insights into action, drive results across the entire system, and use their exceptional interpersonal skills to navigate a higher-risk, faster-changing environment.

As the career path from corporate executive to CEO of a PE-backed enterprise becomes increasingly common, the success of this transition depends on whether all parties can reach a consensus on the actual requirements of this role. When leaders fail to make a smooth transition, it is usually not due to insufficient capabilities, but because all parties never fully understood or tested the competencies required for the position. The role of CEO at a PE-backed enterprise is fundamentally different from that at a mature enterprise. For investors, when selecting CEOs, they should not only look at candidates' impressive resumes and past experiences, but also ask more specific questions: are they prepared to adapt to this environment. At the same time, for corporate executives, this transition means more than a promotion, it is a redefinition of role expectations. They must also carefully consider whether they have the competencies to qualify for this role, and the motivation to face the real challenges. Ultimately, the starting point for a leader's successful transition is a clear understanding of their own capabilities and motivation.

Samantha Hellauer, Dina Wang, Heidi Smith, Samantha Smith | Text

Samantha Hellauer is Director of Strategic Initiatives and Client Solutions at ghSmart, a leadership consulting firm.

Dina Wang is a Partner at ghSmart and a member of the company's Executive Committee. Heidi Smith is the Head of the CEO Succession practice at ghSmart. Samantha Smith is a doctoral candidate at Harvard Business School and a researcher at ghSmart.

This article is from the WeChat public account "Harvard Business Review" (ID: hbrchinese), Author: HBR-China, Edited by: Zhou Jingyi, Published with authorization from 36Kr.