Insights from the 2018 Private Equity Symposium, in partnership with the Institute for Contemporary Leadership and Edelman

The Institute for Contemporary Leadership (ICL), in conjunction with global communications marketing firm Edelman, hosted a premier panel of private equity leaders in New York City at the Harvard Club on September 26th. Moderated by Dr. Dan Fisher from ICL, the diverse panel of senior PE partners addressed successful practices to optimize senior leadership performance within their firms’ portfolios.

Key highlights and takeaways from the symposium emerged from discussions with the panelists, senior executives, and PE partners:

  • Strong need to quickly gain an early assessment of senior executives’ leadership knowledge skills and abilities, and in particular the CEO’s capability to drive the value creation plan. As a leading PE Partner noted, “If results are good, it is easy to ignore leadership and cultural issues, but then when returns worsen you regret your decision to not pay more attention. We now conduct a leadership evaluation early and often, and a dialogue focused on leadershipwe used to just think about business quality and growth when assessing companies, but now we have added leadership and cultural quality, which has become part of underwriting.”
  • Panelists also agreed on the need to make quick changes at the highest leadership levels when
    warranted, noting that organizational change is healthy and inherent to traditional PE strategies for growing companies.
  • Additionally, the panelists noted that incumbent CEO past performance is not often indicative of future success, and that industry experience, while important, was not the number one factor to consider when hiring new CEOs. As prior research has shown, successful CEOs of PE portfolio companies tend to be highly adaptable, reliable, and obsessed with creating a winning culture supportive of their value creation plan.
  • The panel also strongly agreed that incoming CEOs can have significantly different styles than their predecessors, which should be better suited for the particular point in the company’s lifecycle. As one panelists commented “Making sure to align leadership styles with the lifecycle state was a major learning point for me.”

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