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.