Did you know first-time private equity portfolio company CEOs on average lead three years longer and with less volatility in performance than experienced CEOs? (SpencerStuart: Predicting CEO Success: When Potential Outperforms Experience, 2020). 

 

Selecting a CEO for your new portfolio company is often a challenge because there is so much at stake, and past performance is not always a predictor of future success for CEOs, despite it being the accepted principle in HR management for many decades. 

 

While experienced CEOs bring a plethora of experience, there are many factors that dilute performance. Some leaders can become very comfortable with their work, to the point of not performing in the most dedicated way or offering valuable fresh perspectives. 

 

With that in mind, it is important to understand the difference between a PE Operating Partner and a PortCo (portfolio company) CEO. 

   

 

The operating partner is an employee of the private equity fund and serves as an advisor to the portfolio of PortCo (portfolio companies) held by the fund. The CEO is the chief operating executive of the PortCo.

 

The best private equity operating partners and CEOs operate within the principles of transparency and honesty. The operating partner serves as a resource and support for the CEO and their team.

 

Learn more and get the framework here. 

 

PS: Is there a brand that speaks to you? Mine is American Express. I’ve had consistently positive experiences with AE and I’m thrilled about their latest partnership with Vanguard Financial Services. 

 

Providing financial advice to eligible members through Vanguard is a creative collaboration that is a win-win-win for them and their customers. Here is a photo of me last month from our trip to New York City at the LaGuardia airport, just outside their airport lounge…"I just can't live life without it!"

 

 

PPS: Thank you to SW in Charlotte, NC, for responding to our question last week. Here is our answer to the importance of Ivy League Degrees.

 

 

Thank you for sharing your day with me, and enjoy the rest of your week!

 

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Maureen is a performance optimization coach and personal branding strategist for next-level executives and board nominees.

 

Westgate Executive Branding and Career Consulting Inc. would like to acknowledge that we are located in Mi'kma'ki, the ancestral and unceded territory of the Mi'kmaq People. We are all Treaty people.