How Private Equity Firms Hire CEOs
Although a typical public company director might help hire a CEO a few times in a career, PE executives hire multiple CEOs each year. To tap this expertise, Jeffrey Cohn, of the executive search firm DHR International, and J.P. Flaum, of the consulting firm Green Peak Partners, surveyed and interviewed the managing partners of 32 private equity firms about their CEO search process. They drew five conclusions: (1) Experience is overrated; someone who can run with a new situation is often better than someone with years of industry experience. (2) Team-building skills are paramount. (3) Urgency outranks empathy; leaders need to be able to move decisively and without regrets. (4) Resilience is a must; in turnaround situations, leaders are likely to encounter some negative results. (5) Candor is also key; leaders must have the confidence to give their PE sponsors bad news quickly and honestly.